Document:

CREDIT AGREEMENT

CREDIT AGREEMENT

CREDIT AGREEMENT dated as of October 5, 2001 among ALPHARMA OPERATING CORPORATION, a Delaware corporation (the "Company"), ALPHARMA USPD INC., a Maryland corporation ("Alpharma USPD"), ALPHARMA INC., a Delaware corporation ("Holdings"), the other Subsidiaries of the Company as shall become party hereto as provided hereunder (collectively with Alpharma USPD, the "Subsidiary Borrowers", the Subsidiary Borrowers and the Company, individually, a "Borrower" and collectively, the "Borrowers"), THE BANKS, FINANCIAL INSTITUTIONS AND OTHER LENDERS LISTED ON THE SIGNATURE PAGES HEREOF under the caption "Initial Lenders" (the "Initial Lenders") and the other banks, financial institutions and lenders from time to time party hereto, BANK OF AMERICA, N.A. ("Bank of America") as the initial issuer of Letters of Credit (as hereinafter defined) hereunder (the "Initial Issuing Bank") and BANK OF AMERICA, as the provider of the Swing Line Facility (as hereinafter defined) hereunder (the "Swing Line Bank"), FLEET NATIONAL BANK ("Fleet"), as Syndication Agent (the "Syndication Agent"), DEN NORSKE BANK ("DnB") and UNION BANK OF NORWAY ("UBN"), as Co-Documentation Agents (the "Co-Documentation Agents"), BANC OF AMERICA SECURITIES LLC ("BAS"), as the lead arranger and book manager (the "Lead Arranger") for the Facilities (as hereinafter defined) hereunder, and BANK OF AMERICA, as the administrative and collateral agent (together with any successor thereto appointed pursuant to Article VII, the "Administrative Agent") for the Lender Parties (as hereinafter defined).

PRELIMINARY STATEMENTS:

(1)Oral Pharmaceuticals Acquisition Corp. ("PartnerCo"), a newly formed Delaware corporation and direct wholly-owned Subsidiary of the Company, was organized to acquire control of all of the assets relating to the Oral Pharmaceuticals Business (as hereinafter defined) of F.H. Faulding & Co Limited, a corporation organized under the laws of Australia (hereinafter referred to as "Target"; and such acquired business hereinafter referred to as the "Acquired Business") as part of a transaction in which Mayne Nickless Limited, a publicly traded Australian corporation (hereinafter referred to as "BidCo Parent") formed Mayne Nickless Health Logistics Pty Limited, a direct wholly-owned Australian Subsidiary (hereinafter referred to as "BidCo") which made an offer to acquire through a tender offer all of the shares of Target's capital stock (such acquisition of 100% of Target's capital stock being herein referred to as the "Acquisition").

(2)Prior to the date of this Agreement, all of the shares of capital stock of each direct Subsidiary of Holdings has been reorganized (the "Reorganization") such that the Company owns directly or indirectly all of the shares of capital stock of the Subsidiaries of Holdings (other than the Company).

(3)On or prior to the date of this Agreement, A.L. Industrier AS ("ALI"), the parent company of Holdings has surrendered approximately $67,850,000 in aggregate principal amount of Holding's 5.75% senior convertible subordinated debentures due 2005 held by it in exchange for approximately 2,372,897 shares of Class B common stock  of Holdings (hereinafter referred to as the "ALI Subordinated Note Exchange").

(4)Upon the Offers being declared unconditional in all respects and free from the conditions specified in the Offer Terms and upon BidCo becoming the owner of 100% of Target's outstanding capital stock, BidCo Parent shall reorganize the assets of Target such that BidCo's sole asset is the Acquired Business.

(5)The Company and Holdings have each requested the Lender Parties lend the Borrowers up to $900,000,000:  (i) to fund the Parent Loan and to provide the Tender Offer L/C in connection in each case with the acquisition of the Acquired Business by the Company; (ii) to pay fees and expenses incurred in connection with the Transaction; (iii) to refinance certain Existing Debt of Holdings and its Subsidiaries; and (iv) to provide ongoing working capital and for other general corporate purposes of the Company and its Subsidiaries.  The Lender Parties have indicated their willingness to lend such amounts on the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the parties hereto hereby agree as follows:

	

DEFINITIONS AND ACCOUNTING TERMS

	Certain Defined Terms

.  As used in this Agreement (including the Preliminary Statements), the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and the plural forms of the terms defined):

"Advance" means a Term Advance, a Revolving Credit Advance, a Swing Line Advance or a Letter of Credit Advance, as the context may require.

"Administrative Agent" has the meaning specified in the recital of parties to this Agreement.

"Administrative Agent's Account" means the account of the Administrative Agent maintained by the Administrative Agent with Bank of America at its office at 101 North Tryon Street, 15th Floor, NC1-001-15-04, Charlotte, North Carolina 28255, ABA No. 053-000-196, Account No. 13662122506, Reference: ALPHARMA, Attention:  Corporate Credit Services, or such other account maintained by the Administrative Agent and designated by the Administrative Agent as such in a written notice to the Borrowers and each of the Lender Parties.

"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person.  For purposes of this definition, the term "control" (including the terms "controlling," "controlled by" and "under common control with") of a Person means the possession, direct or indirect, of the power to vote 10% or more of the Voting Interests of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Interests, by contract or otherwise.

"Agents" means, collectively, the Administrative Agent, the Lead Arranger, the Syndication Agent, the Co-Documentation Agents and each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 7.01(b).

"Agreement Value" means, with respect to each Hedge Agreement on any date of determination, an amount equal to:

(a)in the case of any Hedge Agreement documented pursuant to the ISDA Master Agreement, the amount, if any, that would be payable by any of the Loan Parties or any of their Subsidiaries to its counterparty to such Hedge Agreement, as if (A) such Hedge Agreement was being terminated early on such date of determination, (B) such Loan Party or such Subsidiary, as the case may be, was the sole Affected Party (as defined in the applicable Master Agreement) and (C) the Administrative Agent was the sole party determining such payment amount (with the Administrative Agent making such determination pursuant to the provisions of the form of Master Agreement); or 

(b)in the case of a Hedge Agreement traded on an exchange, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party or the Subsidiary of a Loan Party party to such Hedge Agreement (determined by the Administrative Agent based on the settlement price of such Hedge Agreement on such date); or

(c)in all other cases, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party or the Subsidiary of a Loan Party party to such Hedge Agreement (determined by the Administrative Agent based on the amount, if any, by which (i) the present value of the future cash flows to be paid by such Loan Party or such Subsidiary of a Loan Party, as the case may be, exceeds (ii) the present value of the future cash flows to be received by such Loan Party or such Subsidiary of a Loan Party pursuant to such Hedge Agreement).

"ALI" has the meaning specified in the recital of parties to this Agreement.

"Applicable Lending Office" means (a) with respect to the Issuing Bank and the Swing Line Bank, the Issuing Bank's or the Swing Line Bank's Base Rate Lending Office for all purposes of this Agreement and (b) and with respect to each other Lender Party, such Lender Party's Base Rate Lending Office in the case of a Base Rate Advance and such Lender Party's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

"Applicable Margin" means (a) with respect to Eurodollar Rate Advances which are drawn under the Term B Facility, a rate equal to 3.25% per annum and (b) with respect to Eurodollar Rate Advances which are drawn under the Term A Facility or under the Revolving Credit Facility, at any time prior to the six month anniversary of the Closing Date, a rate per annum equal to the percentage set forth below opposite Performance Level I or Performance Level II, as applicable (it being understood that the applicable percentage during such period will in no case be less than that set forth below opposite Performance Level II) and at any time and from time to time thereafter a rate per annum equal to the percentage set forth below opposite the applicable Performance Level at such time and (c) with respect to Base Rate Advances which are drawn under any Facility, a rate per annum equal to the Applicable Margin for Eurodollar Rate Advances (as determined in accordance with this definition) less 1.00%.

	
Performance Level
	
Eurodollar Rate Advances

	
I
	
3.00%

	
II
	
2.75%

	
III
	
2.50%

	
IV
	
2.25%

	
V
	
1.75%

	
VI
	
1.25%

 

For purposes of clause (b) of the immediately preceding sentence, the Applicable Margin for each Eurodollar Rate Advance shall be determined by reference to the Performance Level in effect on the first day of each Interest Period for such Advance.

"Applicable Percentage Fee" means, with respect to the Commitment Fee, at any time prior to the six month anniversary of the Closing Date, a rate per annum equal to the percentage set forth below opposite Performance Level II and at any time and from time to time thereafter a rate per annum equal to the percentage set forth below opposite the applicable Performance Level at such time.

	
Performance Level
	
Commitment Fee

	
I
	
0.50%

	
II
	
0.50%

	
III
	
0.50%

	
IV
	
0.375%

	
V
	
0.375%

	
VI
	
0.30%

"Approved Fund" means, with respect to any Lender, any fund that invests in  syndicated bank loans and is advised or managed by such Lender, by the same investment advisor as such Lender or by an Affiliate of such Lender or investment advisor.

"Asset Disposition" has the meaning specified in Section 2.06(b)(ii).

"Asset Transfer" means the acquisition by PartnerCo of either (a) the Acquired Business from BidCo or a Subsidiary of BidCo or (b) the shares of stock of BidCo or a Subsidiary of BidCo (in either case, whose assets and liabilities at that time will consist solely of the Acquired Business).

"Assignment and Acceptance" means an assignment and acceptance entered into by a Lender Party and an Eligible Assignee, and accepted by the Administrative Agent and, if applicable, the Borrowers, in accordance with Section 8.07 and in substantially the form of Exhibit C hereto.

"Australian Security Agreement" has the meaning specified in Section 3.01(a)(xxi). 

"Available Amount" of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

"Bank of America" has the meaning specified in the recital of parties to this Agreement. 

"BAS" has the meaning specified in the recital of parties to this Agreement.

"Barbados Stock Pledge" has the meaning specified in Section 3.01(a)(xxiii).

"Base Rate" means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its "prime rate."  Such rate is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.

Any change in the Base Rate resulting from a change in the prime rate established by Bank of America shall become effective on the Business Day on which such change in the prime rate is announced by Bank of America.

"Base Rate Advance" means an Advance that bears interest as provided in Section 2.07(a)(i).

"Base Rate Lending Office" means, with respect to each of the Lender Parties, the office of such Lender Party specified as its "Base Rate Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender Party, as the case may be, or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrowers and the Administrative Agent for such purpose.

"Bermuda Security Agreement" has the meaning specified in Section 3.01(a)(xxii).

"Borrower" and "Borrowers" have the meaning specified in the recital of parties to this Agreement.

"Borrowing" means a Term Borrowing, a Revolving Credit Borrowing or a Swing Line Borrowing, as the context may require.

"Bridge Advance" means any advance under the Bridge Facility by any lender party to the Bridge Facility.

"Bridge Facility" means (i) a subordinated bridge loan facility in form and substance reasonably acceptable to the Administrative Agent and Initial Issuing Bank and entered into by the Company and certain financial institutions and institutional lenders named therein, (ii) a backstop letter of credit issued by a financial institution reasonably acceptable to the Administrative Agent and Initial Issuing Bank for the account of the Company in favor of the Initial Issuing Bank, (iii) cash collateral or other credit support in an amount and form acceptable to the Administrative Agent and the Initial Issuing Bank, (iv) a purchase by way of assignment of all or a portion of the Initial Issuing Bank's rights and obligations under the Tender Offer L/C  or (v) a written commitment by BAS or its Affiliates to provide subordinated capital to the Company with a cash interest rate not in excess of 12% per annum, with a term of not less than 8 years, and with financial and other operating covenants less restrictive by a factor of 10% than those contained in this Agreement, and with no additional or more restrictive defaults, required prepayment, required redemption or other similar terms more restrictive on, or less favorable to, Holdings than those contained in this Agreement; in each case pursuant to which the proceeds of such financial arrangement will be used solely to reimburse the Initial Issuing Bank for any drawing made by the beneficiary under the Tender Offer L/C.

"Business Day" means a day of the year on which banks are not required or authorized by law to close in New York, New York and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in U.S. dollar deposits in the London interbank market.

"Capital Assets" means, with respect to any Person, all equipment, fixed assets and real property or improvements of such Person, or replacements or substitutions therefor or additions thereto, that, in accordance with GAAP, have been or should be reflected as additions to property, plant or equipment on the balance sheet of such Person or such equipment, fixed assets or real property that has a useful life of more than one year.

"Capital Expenditures" means, with respect to any Person for any period, (a) all expenditures made directly or indirectly by such Person during such period for Capital Assets (whether paid in cash or other consideration or accrued as a liability and including, without limitation, all expenditures for maintenance and repairs which are required, in accordance with GAAP, to be capitalized on the books of such Person, in each case, for such period) and (b) solely to the extent not otherwise included in clause (a) of this definition, (i) the aggregate principal amount of all Debt (including, without limitation, Obligations in respect of Capitalized Leases) assumed or incurred during such period in connection with any such expenditures for Capital Assets and (ii) the aggregate amount of any expenditures made in respect of purchases of intangible assets (including, without limitation, the purchase of product registration files) during such period (it being understood that capital expenditures made in respect of the PST Project are "Capital Expenditures").

"Capitalized Lease" means any lease with respect to which the lessee is required to recognize concurrently the acquisition of property or an asset and the incurrence of a liability in respect of such acquisition in accordance with GAAP.

"Cash Distributions" means, with respect to any Person for any period, all dividends and other distributions on any of the outstanding Equity Interests in such Person plus any payments made or other distributions on any of the Existing Notes, the Exchange Notes or the Debt Securities, all purchases, redemptions, retirements, defeasances or other acquisitions of any of the outstanding Equity Interests in such Person and all returns of capital to the stockholders, partners or members (or the equivalent persons) of such Person, in each case to the extent paid in cash by or on behalf of such Person during such period.

"Cash Equivalents" means any of the following types of Investments, to the extent owned by any Borrower or any of its Subsidiaries free and clear of all Liens (other than Liens created under the Collateral Documents):

(a)readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; provided that the full faith and credit of the United States of America is pledged in support thereof;

(b)time deposits with, or insured certificates of deposit or bankers' acceptances of, any commercial bank that (i) (A) is a Lender Party or (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (c) of this definition and (iii) has combined capital and surplus of at least $1,000,000,000, in each case with maturities of not more than 90 days from the date of acquisition thereof;

(c)commercial paper in an aggregate amount of no more than $5,000,000 per issuer outstanding at any time issued by any Person organized under the laws of any state of the United States of America and rated at least "Prime-1" (or the then equivalent grade) by Moody's or at least "A-1" (or the then equivalent grade) by S&P, in each case with maturities of not more than 180 days from the date of acquisition thereof; 

(d)repurchase obligations with a term of not more than seven (7) days for the underlying securities of the type described in clauses (a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (c) above; and

(e)Investments, classified in accordance with GAAP as Current Assets of any Borrower or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by financial institutions that have the highest rating obtainable from either Moody's or S&P, and the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a), (b), (c) and (d) of this definition.

"CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time.

"CERCLIS" means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

"Change of Control" means the occurrence of any of the following:

(a)at any time after ALI and the EWS Parties cease to beneficially own (within the meaning of Rule 13d-3 promulgated under the Exchange Act) shares of common stock of Holdings with a combined voting power sufficient to elect a majority of the board of directors of Holdings, the acquisition by any person, entity or "group" within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, Holdings or any of its Subsidiaries, or any employee benefit plan of Holdings or any of its Subsidiaries which acquires beneficial ownership of Voting Interests of Holdings) of beneficial ownership of shares of common stock of Holdings representing 20% or more of the combined voting power of all voting interests of Holdings; or

(b)persons who, as of the Closing Date, constitute the Board of Directors of Holdings (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors of Holdings, provided that any person becoming a director of Holdings subsequent to the Closing Date whose election, or nomination for election by Holdings' stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such person were a member of the Incumbent Board; or

(c)any person, entity or group (within the meaning of the Exchange Act as aforesaid) shall have acquired by contract or otherwise, or shall have entered into a contract or binding arrangement that, upon consummation, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the power to direct or cause the direction of the management or policies of Holdings; or

(d)Holdings shall cease to own 100% of the Equity Interests in the Company; or

(e)any EWS Party (as defined below), or any other Person controlled by any EWS Party, shall create, incur, assume or suffer to exist any Lien on the Equity Interests in Holdings owned by it (other than Liens on the Equity Interests in Holdings that any EWS Party or other Person would otherwise be able to sell, transfer or otherwise dispose of without such sale, transfer or other disposition constituting a Change of Control);

provided, however, that for the purpose of clauses (a) through (d) above, the terms "person," "entity" and "group" shall not be deemed to include (x) ALI, (y) the stockholders of ALI in the case of a distribution of shares of capital stock of Holdings beneficially owned by ALI to the stockholders of ALI, unless a Change of Control of ALI has occurred or occurs concurrently with such a distribution, or in a series of related transactions of which such distribution is a part (determined without regard to the exclusion for stockholders of ALI provided for in this clause (y) of this proviso), provided that the exclusion for stockholders of ALI provided for in this clause (y) shall not apply to any subsequent acquisition of shares of common stock of Holdings by any such person (other than any of the persons described in clause (z) below) or (z) E.W. Sissener, his spouse, any heir or descendant of Mr. Sissener or the spouse of any such heir or descendant or the estate of Mr. Sissener (each, an "EWS Party"), or any trust or other similar arrangement for the benefit of any EWS Party or any corporation or other person or entity controlled by one or more EWS Parties, or any group controlled by one or more EWS Parties. For purposes of the above sentence, (i) a "liquidation" or "dissolution" shall not be deemed to include any transfer of Holdings property solely to any of the persons described in clauses (x), (y) and (z) of the proviso in such sentence and (ii) a "Change of Control of ALI" shall be determined in accordance with this definition of "Change of Control" (without regard to clauses (x) and (y) in the proviso of the preceding sentence), with each reference to Holdings in such definition being deemed to refer to ALI.

"Clean-Down Period" means a period of 30 consecutive days commencing 15 days prior to the closing of any purchase or other acquisition of the property and assets comprising a division or business unit, or all or a substantial part of the business of, or all of the Equity Interests in, or all or substantially all of the property and assets of, any Person, for, in any case, total cash and non-cash consideration of at least $25,000,000 (it being understood that all indemnities, earnouts and other similar contingent purchase price payment obligations to, and the aggregate amounts paid or to be paid under noncompete, consulting and other affiliated agreements with, the sellers thereof, all write-downs of property and assets and reserves for liabilities with respect thereto and all assumptions of Debt in connection with such purchases or other acquisitions count towards such $25,000,000 amount).

"Closing Date" means the first date on which all of the conditions precedent to the Initial Extension of Credit set forth in Article III are satisfied, which date shall occur on or prior to November 1, 2001.

"Collateral" means all of the "Collateral" referred to in the Collateral Documents and all of the other property and assets that are or are intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties.

"Collateral Account" has the meaning specified in the recitals of the Security Agreement (which shall be an interest bearing account).

"Collateral Documents" means, collectively, the Security Agreement, the Intellectual Property Security Agreement, the Mortgages, the Australian Security Agreement, the Bermuda Security Agreement, the Barbados Stock Pledge, the Collateral Pledge Agreement, each of the mortgages, collateral assignments, Security Agreement Supplements, IP Security Agreement Supplements, security agreements, pledge agreements or other similar agreements delivered to the Administrative Agent and the Lender Parties pursuant to Section 5.01(j), and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

"Collateral Pledge Agreement" means a collateral pledge and security agreement in form and substance reasonably satisfactory to the Administrative Agent and the Initial Issuing Bank, and entered into by the Company, the Initial Issuing Bank and the holders of the Debt Securities (or their representative), pursuant to which the proceeds of the issuance and sale of the Debt Securities are held (i) for the benefit of the holders of the Debt Securities, on a first priority basis, subject to release to such holders upon the occurrence of any redemption under the Debt Securities resulting from the failure of the Asset Transfer to occur by a specified date and (ii) as cash collateral for the Initial Issuing Bank, on a second priority basis, subject to release to the Initial Issuing Bank upon a drawing under the Tender Offer L/C.

"Commitment" means a Term Commitment, a Revolving Credit Commitment, a Letter of Credit Commitment, as the context may require.

"Commitment Fee" has the meaning specified in Section 2.08(a).

"Compliance Certificate" means a compliance certificate substantially in the form of Exhibit K.

"Confidential Information" means information that is furnished to the Administrative Agent or any Lender Party by or on behalf of Holdings or any of its Subsidiaries on a confidential basis, but does not include any such information that (a) is or becomes generally available to the public other than as a result of a breach by the Administrative Agent or such Lender Party of its obligations hereunder or (b) is or becomes available to the Administrative Agent or any such Lender Party from a source other than Holdings or any of its Subsidiaries that is not, to the best knowledge of the Administrative Agent or such Lender Party, acting in violation of a confidentiality agreement with Holdings or any of its Subsidiaries.

"Consolidated" refers to the consolidation of accounts in accordance with GAAP.

"Consolidated EBITDA" means, with respect to any Person for any period, (a) the Consolidated Net Income of such Person and its Subsidiaries for such period; plus (b) provision for taxes based on income or profits of such Person and its Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus (c) Consolidated Interest Expense of such Person and its Subsidiaries for such period, whether or not paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capitalized Leases, imputed interest with respect to sale leaseback transactions, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received pursuant to Hedge Agreements) to the extent that any such expense was deducted in computing such Consolidated Net Income; plus (d) depreciation, amortization (including amortization or impairment of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; plus (e) all non-cash extraordinary or nonrecurring charges decreasing such Consolidated Net Income for such period; plus (f) all cash extraordinary or nonrecurring charges up to a maximum aggregate amount of $12,000,000 incurred during the twelve-month period after the Closing Date decreasing such Consolidated Net Income for such period; plus (g) all non-cash expenses and charges of Holdings or any of its Subsidiaries related to the Acquisition and the entering into by the Loan Parties of the Loan Documents; plus (h) all cash expenses and charges up to a maximum aggregate amount of $12,000,000 of Holdings or any of its Subsidiaries related to the Acquisition and the entering into by the Loan Parties of the Loan Documents; plus (i) all non-cash non capitalized transaction costs and charges incurred in connection with consummated acquisitions (other than the Acquisition) or divestitures occurring after the Closing Date to the extent such costs and charges are incurred within 6 months prior to or after the consummation of any such transaction; plus (j) all cash non capitalized transaction costs and charges up to a maximum aggregate amount of $2,000,000 incurred in any Fiscal Year in connection with consummated acquisitions (other than the Acquisition) or divestitures occurring after the Closing Date to the extent such costs and charges are incurred within 6 months prior to or after the consummation of any such transaction;  minus (k) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue consistent with past practice, in each case, on a consolidated basis and determined in accordance with GAAP (to the extent applicable) for such period; it being understood that "Consolidated EBITDA" shall, for purposes of calculating compliance with the financial ratios in Sections 5.04(a) and (b),  be (1) increased for any Measurement Period in which the purchase or other acquisition of all of the Equity Interests in, or all or substantially all of the property and assets of, any Person, has occurred, by the Consolidated EBITDA of the Person or assets being acquired using the historical financial statements (including audited financial statements, to the extent available) for such Person and (2) decreased for any Measurement Period in which the sale, transfer or other disposition of all of the Equity Interests in, or all or substantially all of the property and assets of, any Person, has occurred, by, in each case, the Consolidated EBITDA of the Person or assets being acquired or sold, as applicable, using the historical financial statements (including audited financial statements, to the extent available) for such Person, and all such adjustments to the Consolidated EBITDA of Holdings and its Subsidiaries as specified in the foregoing clauses (1) and (2) shall be accompanied by a certification of a Responsible Officer of Holdings stating that such adjustments have been prepared in accordance with generally accepted accounting principles (where applicable).

"Consolidated Interest Expense" means, with respect to any Person for any period, the gross interest expense accrued on all Debt of such Person and its Subsidiaries during such period, determined on a Consolidated basis and in accordance with GAAP for such period, including, without limitation, (a) in the case of Holdings and its Subsidiaries, (i) interest expense accrued in respect of Debt resulting from the Advances and (ii) all fees paid or payable pursuant to Section 2.08(a) and (b) the interest component of all Obligations in respect of Capitalized Leases, (c) commissions, discounts and other fees and charges paid or payable in connection with letters of credit (including, without limitation, the Letters of Credit), (d) all amortization of original issue discount in respect of all Debt of such Person and its Subsidiaries and (e) the net payment, if any, paid or payable in connection with Hedge Agreements less the net credit, if any, received in connection with Hedge Agreements.

"Consolidated Net Income" means, for any period, the net income (or net loss) of any Person and its Subsidiaries for such period, determined on a Consolidated basis and in accordance with GAAP but excluding for each such period (without duplication):

(a)the net income (or loss) of any other Person accrued prior to the date on which it became a Subsidiary of such Person or was merged into or consolidated with such Person or any of its Subsidiaries or all or substantially all of the property and assets of such other Person were acquired by such Person or any of its Subsidiaries;

(b)the net income (or loss) of any other Person in which a Person other than such Person or any of its Subsidiaries owns or otherwise holds an Equity Interest, except to the extent such income (or loss) shall have been received in the form of Cash Distributions actually paid to such Person or any of its Subsidiaries by such other Person during such period; and

(c)the net income of any Subsidiary of such Person to the extent that the declaration or payment of any dividends or other distributions or intercompany loans or advances of such income by such Subsidiary is not permitted to be made or paid (whether by contract or otherwise) during such period.

"Constitutive Documents" means, with respect to any Person, the certificate of incorporation or registration (including, if applicable, certificate of change of name), articles of incorporation or association, memorandum of association, charter, bylaws, certificate of limited partnership, partnership agreement, trust agreement, joint venture agreement, certificate of formation, articles of organization, limited liability company operating or members agreement, joint venture agreement or one or more similar agreements, instruments or documents constituting the organization or formation of such Person.

"Contingent Obligation" means, with respect to any Person, any Obligation or arrangement of such Person to guarantee or intended to guarantee any Debt, leases, dividends or other obligations ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b) the Obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement (excluding any such arrangements entered into in the ordinary course of business consistent with prior practice) or (c) any Obligation of such 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 (A) for the purchase or payment of any such primary obligation or (B) to maintain Revolving Credit or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

"Conversion", "Convert" and "Converted" each refer to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.09 or 2.10.

"Conversion Date" means either (1) October 1, 2004, if more than $10,000,000 principal amount of the October Convertible Notes (or any notes which replace, refinance or refund the October Convertible Notes, but retain an identical maturity date as the October Convertible Notes) are still outstanding as of such date or (ii) December 1, 2005, if more than $10,000,000 principal amount of the December Convertible Notes (or any notes which replace, refinance or refund the December Convertible Notes, but retain an identical maturity date as the December Convertible Notes) are still outstanding as of such date.

"Current Assets" means, with respect to any Person, all assets of such Person that, in accordance with GAAP, would be classified as current assets on the balance sheet of a company conducting a business the same as or similar to that of such Person, after deducting appropriate and adequate reserves therefrom in each case in which a reserve is proper in accordance with GAAP.

"Debt" means, with respect to any Person (without duplication for purposes of calculating financial ratios), (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 incurred in the ordinary course of such Person's business and (i) not past due for more than 60 days after the date on which each such trade payable or account payable was created or (ii) if past due for more than 60 days after the date on which each such trade payable or account payable was created, which are being contested in good faith by appropriate procedures and as to which adequate reserves are being maintained in accordance with generally accepted accounting principles), (c) all Obligations of such Person evidenced by notes, bonds, debentures or other similar instruments upon which interest payments are customarily made, (d) all Obligations of such Person 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, and other than standard and ordinary title retention provisions in supply contracts in respect of goods acquired in the ordinary course of business), (e) all Obligations of such Person as lessee under Capitalized Leases, (f) all Obligations, contingent or otherwise, of such Person under acceptance, letter of credit or similar facilities, (g) all Obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person or any warrants, rights or options to acquire such Equity Interests, valued, in the case of Redeemable Preferred Interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (h) all Obligations of such Person in respect of Hedge Agreements, take-or-pay agreements or other similar arrangements, valued, in the case of Hedge Agreements, at the Agreement Value thereof, (i) all Off-Balance Sheet Obligations of such Person, if such Obligations would give rise to a claim against such Person in a proceeding referred to in Section 6.01(f); (j) all Contingent Obligations, and (k) all indebtedness and other payment Obligations referred to in clauses (a) through (j) above of another Person secured by (or for which the holder of such indebtedness or other payment Obligations 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, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment Obligations, provided (i) that if the instrument evidencing the creation of such Lien limits the aggregate secured liabilities to a stated maximum amount, the Debt of such Person for the purpose of this subclause (k) shall be equal to such stated maximum amount and (ii) the amount of any contingent liability under any indemnity obligation existing under any document or agreement evidencing such Debt shall, to the extent such contingent liability is unrelated to the underlying financial obligations of such Person in respect of such Debt, be excluded from the definition of "Debt" until such time as when such contingent liability matures or is or should be reported as 'debt' for the purposes of generally accepted accounting principles.

"Debt Securities" means the issuance, in one or more tranches, pursuant to and in accordance with the terms of the commitment letter specified in clause (v) of the definition of "Bridge Facility", of no more than an aggregate principal amount of $300,000,000 of senior subordinated notes by the Company outstanding at any time in a registered public offering or, in a private placement, including a  private placement for resale, pursuant to Rule 144A under the Exchange Act (and the issuance of senior subordinated notes in a registered exchange offer in exchange for such initially issued senior subordinated notes).

"December Convertible Notes" means the 3% convertible senior subordinated notes of Holdings due 2006.

"Default" means any Event of Default or any event that would constitute an Event of Default upon the giving of notice or the lapse of time or both.

"Default Interest" has the meaning specified in Section 2.07(b).

"Defaulted Advance" means, with respect to any Lender Party at any time, the portion of any Advance required to be made by such Lender Party to (i) any Borrower pursuant to Section 2.01 or 2.02 at or prior to such time that has not been made by such Lender Party or by the Administrative Agent for the account of such Lender Party pursuant to Section 2.02(e) as of such time or (ii) any Issuing Bank pursuant to Section 2.03(c) at or prior to such time as specified therein.  In the event that a portion of a Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the remaining portion of such Defaulted Advance shall be considered a Defaulted Advance originally required to be made pursuant to Section 2.01 on the same date as the Defaulted Advance so deemed made in part.

"Defaulted Amount" means, with respect to any Lender Party at any time, any amount required to be paid by such Lender Party to the Administrative Agent or any other Lender Party hereunder or under any other Loan Document at or prior to such time that has not been so paid as of such time, including, without limitation, any amount required to be paid by such Lender Party to (a) the Swing Line Bank pursuant to Section 2.02(b) to purchase a portion of a Swing Line Advance made by the Swing Line Bank, (b) any Issuing Bank pursuant to Section 2.03(c) to purchase a portion of a Letter of Credit Advance made by such Issuing Bank, (c) the Administrative Agent pursuant to Section 2.02(e) to reimburse the Administrative Agent for the amount of any Advance made by the Administrative Agent for the account of such Lender Party, (d) any other Lender Party pursuant to Section 2.13 to purchase any participation in Advances owing to such other Lender Party and (e) the Administrative Agent or any Issuing Bank pursuant to Section 7.05 to reimburse the Administrative Agent or such Issuing Bank for such Lender Party's ratable share of any amount required to be paid by the Lender Parties to the Administrative Agent or such Issuing Bank as provided therein.  In the event that a portion of a Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the remaining portion of such Defaulted Amount shall be considered a Defaulted Amount originally required to be paid hereunder or under any other Loan Document on the same date as the Defaulted Amount so deemed paid in part.

"Defaulting Lender" means, at any time, any Lender Party that, at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any action or be the subject of any action or proceeding of a type described in Section 6.01(f) (as if the references to Loan Parties and its Subsidiaries in such Section were references to such Lender Party).

"Designated Capital Markets Transaction" means the incurrence or issuance by (a) Holdings of any Debt in the nature of a replacement, refunding or refinancing of the Existing Notes on substantially identical terms or (b) any Loan Party or any of its Subsidiaries of any Debt with  Specified Parameters; provided that such Designated Capital Markets Transaction must be approved by the Administrative Agent (or Required Lenders, as applicable) in accordance with Section 7.01(d).

"Disclosed Litigation" has the meaning specified in Section 3.01(d).

"Eligible Assignee" means with respect to any Facility (a) a Lender; (b) an Affiliate or an Approved Fund of a Lender; or (c) any other Person approved by the Administrative Agent and, so long as no Event of Default has occurred and is continuing at the time the related assignment is effected pursuant to Section 8.07, Holdings (in either case such approval not to be unreasonably withheld or delayed); provided, however, that neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition.

"Environmental Action" means any suit, demand, demand letter, claim, notice of noncompliance or violation, notice of liability or potential liability, investigation, consent order or consent agreement relating in any way to any violation of or liability under any Environmental Law, any Environmental Permit or Hazardous Material or arising from alleged Hazardous Material related injury or threat to health, safety or the environment, including, without limitation, (a) by any Governmental Authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any Governmental Authority or any other Person for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

"Environmental Law" means any federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or legally binding judicial or agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

"Environmental Permit" means any permit, approval, identification number, license or other authorization required under any Environmental Law.

"Equity Interests" means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.

"ERISA Affiliate" means any Person that for purposes of Title IV of ERISA is a member of the controlled group of any Loan Party, or under common control with any Loan Party, within the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code.

"ERISA Event" means (A) (a) (i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC or (ii) the requirements of paragraph (1) of Section 4043(b) of ERISA (without regard to paragraph (2) of such Section) are met with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA could reasonably be expected to occur with respect to such Plan within the following 30 days; (b) the application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the partial or complete withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan year pursuant to Section 4063 of ERISA for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA, that constitutes grounds for the termination of, or the appointment of a trustee to administer, such Plan and (B) which event results in a liability to a Loan Party in excess of $5,000,000.

"Escrow Agreement" means that certain escrow agreement dated July 12, 2001 made by and among Mayne Nickless Limited, Holdings and The Chase Manhattan Bank, as amended.

"Eurocurrency Liabilities" has the meaning specified in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

"Eurodollar Lending Office" means, with respect to each of the Lenders, the office of such Lender specified as its "Eurodollar Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender, as the case may be (or, if no such office is specified, its Base Rate Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrowers and the Administrative Agent for such purpose.

"Eurodollar Rate" means, for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing:

(a)the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period; or

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

(c)if the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the rate of interest (rounded upward to the next 1/100th of 1%) at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the offshore Dollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period.

"Eurodollar Rate Advance" means an Advance that bears interest as provided in Section 2.07(a)(ii).

"Eurodollar Rate Reserve Percentage" for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing means the reserve percentage applicable at any time under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurodollar Rate Advances is determined) having a term equal to such Interest Period.

"Events of Default" has the meaning specified in Section 6.01.

"Excess Cash Flow" for any Fiscal Year means, in each case determined on a consolidated basis in accordance with GAAP and as reported in Holdings' Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, (a) net cash provided by operating activities; (b) minus the amount of Capital Expenditures made in cash permitted under this Agreement made or deemed made during such period; (c) minus amounts expended for the purchase or other acquisition of property and assets during such period (to the extent otherwise permitted to be expended under this Agreement); (d) minus the amount of Cash Distributions permitted under this Agreement paid in cash during such period; (e) minus the amount of  "payment for debt issuance costs" as reported in Holdings' Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, during such period; (f) minus (without duplication) Required Principal Payments; (g) minus any voluntary prepayments of any of the Term Advances during such period; and (h) minus any proceeds from "key-man" life insurance or business interruption insurance which are used to prepay any of the Term Advances, to the extent added in calculating pre-tax income; in each case without duplication.

"Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.

"Exchange Notes" means any notes issued to certain lenders under the Bridge Facility in exchange for certain notes evidencing the Bridge Advances that have been converted into rollover loans in accordance with the Bridge Facility.

"Existing Debt" means Debt of each Loan Party and its Subsidiaries outstanding immediately before the occurrence of the Closing Date.

"Existing Letters of Credit" means the following letters of credit, in each case outstanding as of the Closing Date: (i) letter of credit #3703630, issued by Bank of America on June 28, 2001 in favor of Wells Fargo Minnesota in the amount of $3,050,342.46 for the account of Holdings and (ii) letter of credit #90001290, issued by Fleet National Bank on June 28, 2001 in favor of Almar Limited Partnership in the amount of $174,273.74 for the account of Holdings. 

"Existing Notes" means any or all (as the context requires) of the October Convertible Notes or the December Convertible Notes.

"Extraordinary Receipt" means any cash received by or paid to or for the account of any Person not in the ordinary course of business, including, without limitation non-ordinary course tax refunds, pension plan reversions, proceeds of insurance (other than proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings), condemnation awards (and payments in lieu thereof), indemnity payments and any purchase price adjustments received in respect of Asset Dispositions; provided, however, that an Extraordinary Receipt shall not include (a) cash receipts received from proceeds of insurance, condemnation awards (or payments in lieu thereof) or indemnity payments to the extent that such proceeds, awards or payments (A) in respect of loss or damage to equipment, fixed assets or real property are applied (or in respect of which expenditures were previously incurred) to replace or repair the equipment, fixed assets or real property in respect of which such proceeds were received in accordance with the terms of the Loan Documents, so long as (i) such application is made within six months after the occurrence of such damage or loss or (ii) in respect of any replacement or repair for which an expenditure of less than $5,000,000 is made, a binding contract in respect of  application of such proceeds is entered into within such six month period and the application thereof is made reasonably soon thereafter or (B) are received by any Person in respect of any third party claim against such Person and applied to pay (or to reimburse such Person for its prior payment of) such claim and the costs and expenses of such Person with respect thereto or (b) purchase price adjustments received in respect of asset purchases which are applied within 180 days of receipt to purchase assets in replacement of those for which such purchase price adjustment was received. 

"Facility" means the Term A Facility, the Term B Facility, the Revolving Credit Facility, the Swing Line Facility or the Letter of Credit Facility, as the context may require.

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

"Fiscal Quarter" means, with respect to Holdings or any of its Subsidiaries, the period commencing January 1 in any Fiscal Year and ending on the next succeeding March 31, the period commencing April 1 in any Fiscal Year and ending on the next succeeding June 30, the period commencing July 1 in any Fiscal Year and ending on the next succeeding September 30 or the period commencing October 1 in any Fiscal Year and ending on the next succeeding December 31, as the context may require, or, if any such Subsidiary was not in existence on the first day of any such period, the period commencing on the date on which such Subsidiary is incorporated, organized, formed or otherwise created and ending on the last day of such period.

"Fiscal Year" means, with respect to Holdings or any of its Subsidiaries, the period commencing on January 1 in any calendar year and ending on the next succeeding December 31 or, if any such Subsidiary was not in existence on January 1 in any calendar year, the period commencing on the date on which such Subsidiary is incorporated, organized, formed or otherwise created and ending on the next succeeding December 31.

"Fixed Charge Coverage Ratio" means, at any date of determination, the ratio of (a) (i) Consolidated EBITDA of Holdings and its Subsidiaries, plus (ii) rentals payable during such period under leases of real or personal, or mixed, property by Holdings and its Subsidiaries to (b) the sum of (i) Consolidated Interest Expense of Holdings and its Subsidiaries, (ii) the aggregate principal amount (or the equivalent in respect of Off-Balance Sheet Obligations) of all Required Principal Payments of Holdings and its Subsidiaries, (iii) the aggregate amount of all Cash Distributions made by or on behalf of Holdings, (iv) rentals payable during such period under leases of real or personal, or mixed, property, and (v) all taxes paid in cash, in each case, for the most recently completed Measurement Period.

"Fully Paid" means, with respect to the Payment Obligations as of any date, that, on or before such date, (a) the principal of (or, as applicable, stated or face amount of) and interest accrued to such date on all outstanding loans, reimbursement obligations in respect of letters of credit and other credit extensions shall have been paid in full in cash, (b) all commitments to lend, issue any letter of credit or other credit extension shall have been terminated in full, (c) all outstanding letters of credit shall have been (i) terminated or (ii) cash collateralized by an amount sufficient in the reasonable judgment of the Administrative Agent to secure any claims thereunder or (iii) supported by one or more letters of credit or other instruments on terms and conditions, and with one or more financial institutions, reasonably satisfactory to the Administrative Agent and (d) all fees, expenses and other amounts then due and payable which constitute Payment  Obligations shall have been paid in full in cash; provided, however, that on such date none of the Agents or any Lender Party shall have made any other claims in respect of Payment Obligations against any Loan Party under any provision of any of the Loan Documents that has not been cash collateralized by an amount sufficient in the reasonable judgment of the Administrative Agent and any such Lender Party to secure such claim.

"Funded Debt" of any Person means Debt in respect of the Advances, in the case of a Borrower, and all other Debt of such Person that by its terms matures more than one year after the date of its creation or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year after such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year after such date, and including all Off-Balance Sheet Obligations of such Person.

"GAAP" has the meaning specified in Section 1.03.

"Governmental Authority" means any nation or government, any state, province, city, municipal entity or other political subdivision thereof, and any governmental, executive, legislative, judicial, administrative or regulatory agency, department, authority, instrumentality, commission, board or similar body, whether federal, state, provincial, territorial, local or foreign.

"Governmental Authorization" means any authorization, approval, consent, franchise, license, covenant, order, ruling, permit, certification, exemption, notice, declaration or similar right, undertaking or other action of, to or by, or any filing, qualification or registration with, any Governmental Authority.

"Guarantee Supplement" has the meaning specified in Section 8(b) of the Guaranties.

"Guaranteed Obligations" has the meaning specified in Section 1 of the Guaranties, as the context may require.

"Guarantor" means any person who is party to a Guaranty.

"Guaranty" means either the Parent Guaranty or the Subsidiary Guaranty (as the context requires).

"Hazardous Materials" means (a) petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

"Hedge Agreements" means, collectively, interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar agreements.

"Hedge Bank" means any Person that is a Lender Party or an Affiliate of a Lender Party, in its capacity as a party to a Secured Hedge Agreement.

"Holdings" has the meaning specified in the recital of parties to this Agreement.

"Immaterial Subsidiary" means, as of any date of determination, any direct or indirect Subsidiary of Holdings that on a consolidated basis with its Subsidiaries (i) has assets with an aggregate fair market value of less than $25,000 and (ii) had revenues of less than $25,000 during the latest 12 month period.

"Included Foreign Jurisdictions" means Denmark, Norway, the United Kingdom, Germany, France, Sweden, Australia, the Netherlands, Belgium and Luxembourg.

"Indemnified Party" has the meaning specified in Section 8.04(b).

"Information Memorandum" means the information memorandum dated August, 2001 used by the Lead Arranger in connection with the syndication of the Commitments.

"Initial Extension of Credit" means, collectively, the initial Borrowings under one or more of the Facilities, and/or the initial issuances of one or more Letters of Credit, made on the Closing Date.

"Initial Issuing Bank" has the meaning specified in the recital of parties to this Agreement.

"Initial Lenders" has the meaning specified in the recital of parties to this Agreement.

"Insufficiency" means, with respect to any Plan, the amount, if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

"Intellectual Property Security Agreement" has the meaning specified in Section 3.01(a)(v).

"Interest Coverage Ratio" means, for any period, the ratio of (a) Consolidated EBITDA of Holdings and its Subsidiaries at any date of determination to (b) Consolidated Interest Expense of Holdings and its Subsidiaries, in each case for the most recently completed Measurement Period.

"Interest Period" means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day of the period selected by a Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by that Borrower pursuant to the provisions below.  The duration of each such Interest Period shall be one, two, three or six months (or such other longer period as each affected Lender may reasonably approve), as such Borrower may, upon notice received by the Administrative Agent not later than 11:00 A.M. (New York time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that:

(a)a Borrower may not select any Interest Period with respect to any Eurodollar Rate Advance under a Facility that ends after any principal repayment installment date for such Facility unless, after giving effect to such selection, the aggregate principal amount of Base Rate Advances and of Eurodollar Rate Advances having Interest Periods that end on or prior to such principal repayment installment date for such Facility shall be at least equal to the aggregate principal amount of Advances under such Facility due and payable on or prior to such date;

(b)Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Borrowing shall be of the same duration;

(c)whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day; provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the immediately preceding Business Day; and

(d)whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.

"Investment" means, with respect to any Person, any loan or advance to such Person, any purchase or other acquisition of Equity Interests in or Debt of, or the property and assets comprising a division or business unit or all or a substantial part of the business of, such Person, any capital contribution to such Person or any other investment in such Person, including, without limitation, any acquisition by way of a merger or consolidation (or similar transaction) and any arrangement pursuant to which the investor incurs Debt of the types referred to in clause (j) or (k) of the definition of "Debt" set forth in this Section 1.01 in respect of such Person.

"IP Security Agreement Supplement" has the meaning specified in Section 14(g) of the Security Agreement.

"ISDA Master Agreement" means the Master Agreement (Multicurrency-Cross Border) published by the International Swap and Derivatives Association, Inc., as in effect from time to time.

"Issuing Bank" means the Initial Issuing Bank, any issuing bank in respect of the Existing Letters of Credit and each other Person to which the Letter of Credit Commitment hereunder has been assigned pursuant to Section 8.07, in each case for so long as the Initial Issuing Bank or such other Person, as the case may be, shall be a party to this Agreement in such capacity.

"L/C Cash Collateral Account" has the meaning specified in the Preliminary Statements to the Security Agreement (which account shall be an interest-bearing account).

"L/C Related Documents" has the meaning specified in Section 2.03(c)(ii)(A).

"Lead Arranger" has the meaning specified in the recital of parties to this Agreement.

"Lender Party" means any Lender, the Issuing Bank or the Swing Line Bank.

"Lenders" means, collectively, the Initial Lenders and each Person that becomes a Lender pursuant to Section 8.07 for so long as such Initial Lender or Person, as the case may be, shall be a party to this Agreement.

"Letter of Credit Advance" means an advance made by the Issuing Bank or any Lender pursuant to Section 2.03(c).

"Letter of Credit Agreement" has the meaning specified in Section 2.03(a).

"Letter of Credit Commitment" means either or both (as the context requires) the Tender Offer L/C Commitment or an Operational Letter of Credit Commitment.

"Letter of Credit Facility" means, at any time, an amount equal to the lesser of (a) the amount of the Issuing Bank's Letter of Credit Commitment at such time and (b) the aggregate of the Tender Offer L/C Commitment and the Operational Letter of Credit Commitment, in each case, as such amount may be reduced at or prior to such time pursuant to this Agreement.

"Letters of Credit" has the meaning specified in Section 2.01(d)(i) and shall include the Tender Offer L/C.

"Lien" means, with respect to any Person, (a) any mortgage, lien (statutory or other), pledge, hypothecation, security interest, charge or other preferential arrangement or encumbrance of any kind (including, without limitation, any agreement to give any of the foregoing), (b) any sale of accounts receivable or chattel paper, or any assignment, deposit arrangement or lease intended as, or having the effect of, security, (c) any easement, right of way or other encumbrance on title to real property or (d) any other interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or any Capitalized Lease or upon or with respect to any property or asset of such Person (including, in the case of Equity Interests, voting trust agreements and other similar arrangements).

"Loan Documents" means, collectively, (a) for purposes of this Agreement and the Notes and any amendment, supplement or other modification hereof or thereof and for all other purposes other than for purposes of the Guaranties and the Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Collateral Documents and (v) each Letter of Credit Agreement and (b) for purposes of the Guaranties and the Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) each Guaranty, (iv) the Collateral Documents, (v) each Letter of Credit Agreement and (vi) each Secured Hedge Agreement, in each case as amended, supplemented or otherwise modified hereafter from time to time in accordance with the terms thereof and section 8.01.

"Loan Parties" means, collectively, each Borrower, Holdings and each of the Subsidiaries of Holdings party to the Subsidiary Guaranty or any of the Collateral Documents (other than any such Subsidiary which is not a U.S. Subsidiary and is party to any Collateral Document only for the purpose of acknowledging the terms thereof).

"Management Agreement" means the management agreement dated July 12, 2001 made by and among Mayne Nickless Limited and Holdings, as amended.

"Margin Stock" has the meaning specified in Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

"Material Adverse Change" means any material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of Holdings and its Subsidiaries, taken as a whole.

"Material Adverse Effect" means a material adverse effect on (a) the business, assets, condition (financial or otherwise) liabilities (actual and contingent), operations, properties or prospects of Holdings and its Subsidiaries, taken as a whole, (b) the ability of any Loan Party to perform its respective Obligations under any Loan Document or Related Document to which it is a party or (c) the rights and remedies of the Administrative Agent or any Lender Party under any Loan Document or any Related Document.

"Measurement Period" means, at any date of determination, the most recently completed four consecutive Fiscal Quarters of Holdings ending on or prior to such date; it being understood that if less than four consecutive Fiscal Quarters of Holdings have been completed since the Closing Date, "Measurement Period" shall mean, at any date of determination, the most recently completed four consecutive Fiscal Quarters of Holdings ending on or prior to such date, with financial calculations made for such period giving pro forma effect to the Asset Transfer as though it had occurred at the beginning of such four Fiscal Quarter period, and using for such period audited financial statements for the Acquired Business to the extent available, and otherwise using unaudited financial statements prepared in each case in accordance with GAAP.

"Moody's" means Moody's Investors Service, Inc.

"Mortgage Policies" has the meaning specified in Section 3.01(a)(iv)(B).

"Mortgages" has the meaning specified in Section 3.01(a)(iv).

"Multiemployer Plan" means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

"Multiple Employer Plan" means a single employer plan (as defined in Section 4001(a)(15) of ERISA) that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could reasonably be expected to have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

"Net Cash Proceeds" means, with respect to any Asset Disposition, or the incurrence or issuance of any Debt, or the sale or issuance of any Equity Interests (including, without limitation, any capital contribution) in any Person, or any Extraordinary Receipt received by or paid to or for the account of any Person, as the case may be, the aggregate amount of cash received from time to time (whether as initial consideration or through payment or disposition of deferred consideration) by or on behalf of such Person for its own account in connection with any such transaction, after deducting therefrom only (without duplication):

(a)reasonable and customary brokerage commissions, underwriting fees and discounts, legal fees, finder's fees and other similar fees, costs and commissions;

(b)the amount of taxes payable in connection with or as a result of such transaction;

(c)in the case of any sale, lease, transfer or other disposition of any property or asset, the outstanding principal amount of, the premium or penalty, if any, on, and any accrued and unpaid interest on, any Debt (other than the Debt outstanding under the Loan Documents) that is secured by a Lien on the property and assets subject to such sale, lease, transfer or other disposition and is required to be repaid under the terms thereof as a result of such sale, lease, transfer or other disposition; and

(d)in the case of any sale, lease, transfer or other disposition of any property or asset, the amount required to be reserved, in accordance with generally accepted accounting principles as in effect on the date on which the Net Cash Proceeds from such sale, lease, transfer or other disposition are determined, and so reserved, against liabilities under indemnification obligations, liabilities related to environmental matters or other similar contingent liabilities associated with the property and assets subject to such sale, lease, transfer or other disposition that are required to be so provided for under the terms of the documentation for such sale, lease, transfer or other disposition;

in each case to the extent, but only to the extent, that the amounts so deducted are properly attributable to such transaction or to the property or asset that is the subject thereof and are actually paid at the time of receipt of such cash to a Person that is not an Affiliate of such Person or any Loan Party or of any Affiliate of any Loan Party or, in the case of clauses (b) and (d) of this definition, so long as such Person is not otherwise indemnified therefor, are reserved for in accordance with generally accepted accounting principles at the time of receipt of such cash based upon such Person's reasonable estimate of such taxes or contingent liabilities, as the case may be; provided, however, that if, at the time such taxes or such contingent liabilities are actually paid or otherwise satisfied, the amount of the reserve therefor exceeds the amount paid or otherwise satisfied, then an amount equal to the amount of such excess reserve shall constitute "Net Cash Proceeds" for the purposes of Section 2.06(b)(ii)(D), and provided further that the proceeds of any Asset Disposition made for an amount less than $100,000 shall not constitute Net Cash Proceeds.

"Note" means a Term Note or a Revolving Credit Note, as the context may require.

"Notes Indenture" means the indenture pursuant to which the Debt Securities are issued and governed.

"Notice of Borrowing" has the meaning specified in Section 2.02(a).

"Notice of Conversion" has the meaning specified in Section 2.09(a).

"Notice of Issuance" has the meaning specified in Section 2.03(a).

"Notice of Renewal" has the meaning specified in Section 2.01(d)(ii).

"Notice of Swing Line Borrowing" has the meaning specified in Section 2.02(b).

"Notice of Termination" has the meaning specified in Section 2.01(d)(ii).

"NPL" means the National Priorities List under CERCLA.

"Obligation" means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including, without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 6.01(f).  Without limiting the generality of the foregoing, the Obligations of the Loan Parties under the Loan Documents include (a) the obligation to pay Payment Obligations and (b) the obligation of any Loan Party to reimburse any amount in respect of any of the foregoing that any Lender Party, in its sole discretion, may elect to pay or advance on behalf of such Loan Party.

"October Convertible Notes" means the 5.75% convertible subordinated notes of Holdings due 2005.

"OECD" means the Organization for Economic Cooperation and Development.

"Off-Balance Sheet Obligations" means, with respect to any Person, all Obligations of such Person under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing classified as debt for borrowed money for tax purposes but not for accounting purposes in accordance with GAAP.

"Offers" means the offers made by BidCo to acquire all of the capital stock (and options related thereto) of Target, as specified in the Put and Call Option Agreement.

"Open Year" means, with respect to any Person, any year for which United States federal (or other non-U.S. federal jurisdiction, as applicable) income tax returns have been filed by or on behalf of such Person and for which the expiration of the applicable statute of limitations for assessment or collection has not occurred (whether by reason of extension or otherwise).

"Operational Letter of Credit Commitment" means, (i) with respect to the Initial Issuing Bank at any time, the amount set forth opposite the Initial Issuing Bank's name on Schedule I hereto under the caption "Operational Letter of Credit Commitment" or, if the Initial Issuing Bank has entered into one or more Assignments and Acceptances, the amount set forth for the Issuing Bank in the Register maintained by the Administrative Agent pursuant to Section 8.07(d) as the Issuing Bank's "Operational Letter of Credit Commitment" and (ii) $25,000,000 in the aggregate; in each case as such amount may be reduced at or prior to such time pursuant to this Agreement.

"Oral Pharmaceuticals Business" means the business of research, development, manufacturing, sales and marketing of generic and proprietary oral pharmaceuticals in the United States and China, as specified in the Put and Call Option Agreement.

"Other Taxes" has the meaning specified in Section 2.12(b).

"Parent Guaranty" has the meaning specified in Section 3.01(a)(iii).

"Parent Loan" means a loan in a maximum amount of $400,000,000 from Holdings to BidCo Parent, in accordance with the terms specified in the Put and Call Option Agreement for the purposes of funding in part the Acquisition.

"PartnerCo" has the meaning specified in the recital of parties to this Agreement.

"Payment Obligations" shall mean all principal, interest, fees, reimbursement obligations, letter of credit commissions, charges, expenses, attorneys' fees and expenses, indemnities and any other amounts payable by the Loan Parties under and in accordance with the Loan Documents.

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

"Performance Level" means Performance Level I, Performance Level II, Performance Level III, Performance Level IV, Performance Level V or Performance Level VI, as the context may require.  For purposes of determining the Performance Level at any date of determination:

(a)not more than one decrease in the Performance Level (thereby resulting in a decrease in the Applicable Margin) shall occur in any three-month period; and

(b)no change in the Performance Level shall be effective until 3 Business Days after the date on which the Administrative Agent receives the Required Financial Information reflecting such change; provided, however, that, if Holdings has not submitted to the Administrative Agent all of the Required Financial Information within 3 Business Days after the date on which such information is otherwise required under Section 5.03(b) or 5.03(c) and Section 5.03(d), as the case may be, the Performance Level shall be deemed to be at Performance Level I for so long as such information has not been submitted.

"Performance Level I" means, at any date of determination, that Holdings and its Subsidiaries shall have maintained a Total Leverage Ratio of greater than 4.75:1.0 for the most recently completed Measurement Period prior to such date.

"Performance Level II" means, at any date of determination, that Holdings and its Subsidiaries shall have maintained a Total Leverage Ratio of greater than 4.00:1.0 but equal to or less than 4.75:1.0 for the most recently completed Measurement Period prior to such date.

"Performance Level III" means, at any date of determination, that Holdings and its Subsidiaries shall have maintained a Total Leverage Ratio of greater than 3.25:1.0 but equal to or less than 4.00:1.0 for the most recently completed Measurement Period prior to such date.

"Performance Level IV" means, at any date of determination, that Holdings and its Subsidiaries shall have maintained a Total Leverage Ratio of greater than 2.50:1.0 but equal to or less than 3.25:1.0 for the most recently completed Measurement Period prior to such date.

"Performance Level V" means, at any date of determination, that Holdings and its Subsidiaries shall have maintained a Total Leverage Ratio of greater than 2.00:1.0 but equal to or less than 2.50:1.0 for the most recently completed Measurement Period prior to such date.

"Performance Level VI" means, at any date of determination, that Holdings and its Subsidiaries shall have maintained a Total Leverage Ratio of equal to or less than 2.00:1.0 for the most recently completed Measurement Period prior to such date.

"Permitted Liens" means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced:  (a) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 5.01(b); (b) Liens imposed by law, such as materialmen's, mechanics', carriers', workmen's and repairmen's Liens and other similar Liens arising in the ordinary course of business securing obligations (other than Debt for borrowed money) (i) that are not overdue for a period of more than 60 days or (ii) the amount, applicability or validity of which are being contested in good faith and by appropriate proceedings diligently conducted and with respect to which the relevant Loan Party or any of its Subsidiaries, as the case may be, has established reserves in accordance with generally accepted accounting principles as in effect at such time; (c) pledges or deposits to secure obligations under workers' compensation laws or similar legislation (other than in respect of employee benefit plans subject to ERISA) or to secure public or statutory obligations; (d) Liens securing the performance of, or payment in respect of, bids, tenders, government contracts (other than for the repayment of borrowed money), surety and appeal bonds and other obligations of a similar nature incurred in the ordinary course of business; (e) any interest or title of a lessor or sublessor and any restriction or encumbrance to which the interest or title of such lessor or sublessor may be subject that is incurred in the ordinary course of business and, either individually or when aggregated with all other Permitted Liens in effect on any date of determination, could not be reasonably expected to have a Material Adverse Effect; (f) Liens in favor of customs and revenue authorities arising as a matter of law or pursuant to a bond to secure payment of customs duties in connection with the importation of goods; (g) Liens arising out of judgments or awards that do not constitute an Event of Default under Section 6.01(g) or 6.01(h) and in respect of which Holdings or any of its Subsidiaries subject thereto shall be prosecuting an appeal or proceedings for review in good faith and, pending such appeal or proceedings, shall have secured within 30 days after the entry thereof a subsisting stay of execution and shall be maintaining reserves, in accordance with generally accepted accounting principles as in effect at such time, with respect to any such judgment or award; (h) easements, rights of way, zoning restrictions and other encumbrances on title to real property that were not incurred in connection with and do not secure Debt and do not, either individually or in the aggregate, render title to the property encumbered thereby unmarketable or materially  and adversely affect the use of such real property for its intended purposes; (i) any retention of title reserved by any supplier of goods pursuant to such supplier's standard terms and conditions in connection with any goods supplied by such seller in the ordinary course of business of the relevant Person; and (j) any right of set-off granted in favor of any financial institution in respect of deposit accounts opened and maintained in the ordinary course of such Person's business.

"Person" means an individual, partnership, corporation (including a business trust), limited liability company, unlimited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

"Plan" means a Single Employer Plan or a Multiple Employer Plan.

"Pledged Debt" has the meaning specified in Section 1(d)(iv) of the Security Agreement.

"Pledged Shares" has the meaning specified in Section 1(d)(iii) of the Security Agreement.

"Preferred Interests" means, with respect to any Person, Equity Interests issued by such Person that are entitled to a preference or priority over any other Equity Interests issued by such Person upon any distribution of such Person's property and assets, whether by dividend or upon liquidation.

"primary obligations" has the meaning specified in the definition of "Contingent Obligation" set forth in this Section 1.01.

"primary obligor" has the meaning specified in the definition of "Contingent Obligation" set forth in this Section 1.01.

"Pro Rata Share" of any amount means, with respect to any of the Lenders at any time, the product (calculated to 9 decimal places) of (a) a fraction the numerator of which is the amount of such Lender's Commitment(s) under the applicable Facility or Facilities (including the amount of any Swing Line Borrowing and Letter of Credit Advance purchased by such Lender pursuant to Sections 2.02(b)(ii) and 2.03(c), respectively)  at such time (or, if the Commitments shall have been terminated pursuant to Section 2.05 or 6.01 at or prior to such time, such Lender's Commitment(s) under the applicable Facility or Facilities as in effect immediately prior to such termination) and the denominator of which is the aggregate amount of such Facility or Facilities at such time (or, if the Commitments shall have been terminated pursuant to Section 2.05 or 6.01 at or prior to such time, the applicable Facility or Facilities as in effect immediately prior to such termination) multiplied by (b) such amount.

"PST Project" means the agreement between the Company and, among others, Natinco B.V., a Netherlands company, relating to the license and sale of certain technology in respect of porcine somatotropin.

"Put and Call Option Agreement" means the put and call option agreement dated July 12, 2001 made by and among BidCo Parent, BidCo, PartnerCo and Holdings (including all exhibits and schedules thereto, as amended.

"Redeemable" means, with respect to any Equity Interest, Debt or other right or Obligation, any such Equity Interest, Debt or other right or Obligation that (a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether by operation of a sinking fund or otherwise, or upon the occurrence of a condition not solely within the control of the issuer or (b) is redeemable at the option of the holder.

"Reduction Amount" has the meaning specified in Section 2.06(b)(v).

"Register" has the meaning specified in Section 8.07(d).

"Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

"Related Documents" means the Put and Call Option Agreement, the Management Agreement, the Parent Loan Agreement, the Escrow Agreement and all other agreements, instruments and documents relating to the Transaction.

"Reorganization" has the meaning specified in the Preliminary Statements to this Agreement.

"Required Financial Information" means, at any date of determination, the Consolidated financial statements of Holdings and its Subsidiaries most recently delivered to the Administrative Agent and the Lender Parties on or prior to such date pursuant to, and satisfying all of the requirements of, Section 5.03(b) or 5.03(c), as the case may be, and accompanied by the certificates and other information required to be delivered therewith pursuant to Section 5.03.

"Required Lenders" means, at any time, Lenders owed or holding at least a majority in interest of the sum of (a) the aggregate principal amount of the Advances outstanding at such time and (b) the aggregate Available Amount of all Letters of Credit outstanding at such time, or, if no such principal amount and no Letters of Credit are outstanding at such time, Lenders holding at least a majority in interest of the aggregate of the Term Commitments and the Revolving Credit Commitments at such time; provided, however, that if any Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Required Lenders at such time (A) the aggregate principal amount of the Advances owing to such Lender (in its capacity as a Lender) and outstanding at such time, (B) such Lender's Pro Rata Share of the aggregate Available Amount of all Letters of Credit issued and outstanding at such time and (C) the Unused Revolving Credit Commitment of such Lender at such time.  For purposes of this definition, the aggregate principal amount of Swing Line Advances owing to the Swing Line Bank and of Letter of Credit Advances owing to the Issuing Bank and the Available Amount of each Letter of Credit shall be considered to be owed to the Lenders ratably in accordance with their respective Revolving Credit Commitments.

"Required Principal Payments" means, with respect to any Person for any period, the sum of all regularly scheduled principal payments or redemptions and all mandatory prepayments, repurchases, redemptions or similar acquisitions for value of outstanding Funded Debt made during such period.

"Requirements of Law" means, with respect to any Person, all laws, constitutions, statutes, treaties, ordinances, rules and regulations, all orders, writs, decrees, injunctions, judgments, determinations or awards of an arbitrator, a court or any other Governmental Authority, and all Governmental Authorizations, binding upon or applicable to such Person or to any of its properties, assets or businesses.

"Requisite Class Lenders" means, at any time, for the class of Lenders having a (i) Term A Commitment, Lenders owed or holding at least a majority in interest of the aggregate principal amount of the Term A Advances outstanding at such time, (ii) Term B Commitment, Lenders owed or holding at least a majority in interest of the aggregate principal amount of the Term B Advances outstanding at such time and (iii) Revolving Credit Commitment, Lenders owed or holding at least a majority in interest of the sum of (a) the aggregate principal amount of the Revolving Credit Advances outstanding at such time and (b) the aggregate Available Amount of all Letters of Credit outstanding at such time, or, if no such principal amount and no Letters of Credit are outstanding at such time, Lenders holding at least a majority in interest of the aggregate of the Revolving Credit Commitments at such time; provided, however, that if any Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Requisite Class Lenders at such time (A) the aggregate principal amount of the Advances owing to such Lender (in its capacity as a Lender) and outstanding at such time, (B) such Lender's Pro Rata Share of the aggregate Available Amount of all Letters of Credit issued by such Lender and outstanding at such time and (C) the Unused Revolving Credit Commitment of such Lender at such time.  For purposes of this definition, the aggregate principal amount of Swing Line Advances owing to the Swing Line Bank and of Letter of Credit Advances owing to the Issuing Bank and the Available Amount of each Letter of Credit shall be considered to be owed to the Lenders ratably in accordance with their respective Revolving Credit Commitments.

"Responsible Officer" means, with respect to Holdings or any of its Subsidiaries, the chief executive officer, the president, the chief financial officer, the principal accounting officer or the treasurer (or the equivalent of any of the foregoing) or any other officer, partner or member (or person performing similar functions) of Holdings or any such Subsidiary responsible for overseeing the administration of, or reviewing compliance with, all or any portion of this Agreement or any of the other Loan Documents.

"Revolving Credit Advance" has the meaning specified in Section 2.01(b).

"Revolving Credit Borrowing" means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type made by the Lenders.

"Revolving Credit Commitment" means, with respect to any Lender at any time, the amount set forth opposite such Lender's name on Schedule I hereto under the caption "Revolving Credit Commitment" or, if such Lender has entered into one or more Assignments and Acceptances, the amount set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 8.07(d) as such Lender's "Revolving Credit Commitment", as such amount may be reduced pursuant to this Agreement.

"Revolving Credit Facility" means, at any time, the aggregate amount of the Lenders' Revolving Credit Commitments at such time.

"Revolving Credit Note" means a promissory note issued by a Borrower payable to the order of any Lender, in substantially the form of Exhibit A-2 hereto, evidencing the aggregate indebtedness of that Borrower to such Lender resulting from the Revolving Credit Advances made by such Lender.

"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc.

"Secured Hedge Agreement" means any interest rate Hedge Agreement required under Article V that is entered into by and between any Loan Party and any Hedge Bank.

"Secured Obligations" has the meaning specified in Section 2 of the Security Agreement.

"Secured Parties" means, collectively, the Agents, the Lender Parties and the Hedge Banks.

"Security Agreement" has the meaning specified in Section 3.01(a)(ii).

"Security Agreement Supplement" has the meaning specified in Section 22(b) of the Security Agreement.

"Senior Debt" means, as of the date of determination, each Borrowing (other than the Tender Offer L/C) which is outstanding as of such date plus all other amounts or liabilities which may be outstanding under any of the Loan Documents as of such date (including, without limitation, all Obligations of any Loan Party under any of the Secured Hedge Agreements valued at the Agreement Value thereof).

"Senior Leverage Ratio" means, at any date of determination, the ratio of (a) all Senior Debt outstanding on such date to (b) Consolidated EBITDA of Holdings and its Subsidiaries for the most recently completed Measurement Period prior to such date.

"Single Employer Plan" means a single employer plan (as defined in Section 4001(a)(15) of ERISA) that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.

"Solvent" and "Solvency" mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute an unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

"Specified Parameters" means any Debt (a) which is unsecured, and the payment of principal of which is fully subordinated and junior in right of payment to the prior indefeasible payment in full in cash of all Payment Obligations under the Loan Documents, (b) which is at or below a market rate of interest for comparable instruments at such time and (c) which has no additional or more restrictive covenants, defaults, required prepayment, required redemption or other similar terms more restrictive on, or less favorable to, Holdings and its Subsidiaries than those contained in the Existing Notes.

"Standby Letter of Credit" means any Letter of Credit issued under the Letter of Credit Facility, other than a Trade Letter of Credit.

"Subsidiary" of any Person means any corporation, partnership, joint venture, limited liability company, unlimited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding shares of capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture, limited liability company or unlimited liability company or (c) the beneficial interest in such trust or estate, is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person's other Subsidiaries, provided that (i) the Persons constituting the Acquired Business shall not be deemed Subsidiaries for the purposes of this definition notwithstanding the rights and powers Holdings exercises over such Persons by virtue of the Management Agreement, it being understood that such Persons shall be deemed Subsidiaries once the Asset Transfer has been completed to the extent such Persons qualify as a "Subsidiary" under any of sub-clause (a), (b) or (c) of this definition at such time and (ii) WYNCO shall not constitute a "Subsidiary" for the purposes of this definition until such time (if any) as it qualifies as a "Subsidiary" pursuant to clause (a) of this definition.

"Subsidiary Borrowers" has the meaning specified in the recital of parties to this Agreement.

"Subsidiary Borrowing Agreement" means a subsidiary borrowing agreement in substantially the form of Exhibit L hereto.

"Subsidiary Guaranty" has the meaning specified in Section 3.01(a)(iii).

"Surviving Debt" means Debt of each Loan Party and its Subsidiaries outstanding immediately before and after the Closing Date.

"Swing Line Advance" means an advance made by (a) the Swing Line Bank pursuant to Section 2.01(c) or (b) any Lender pursuant to Section 2.02(b).

"Swing Line Bank" has the meaning specified in the recital of parties to this Agreement.

"Swing Line Borrowing" means a borrowing consisting of a Swing Line Advance made by the Swing Line Bank.

"Swing Line Facility" has the meaning specified in Section 2.01(c).

"Target" has the meaning specified in the recitals.

"Taxes" has the meaning specified in Section 2.12(a).

"Tender Offer L/C Commitment" means, (i) with respect to the Initial Issuing Bank at any time, the amount set forth opposite the Initial Issuing Bank's name on Schedule I hereto under the caption "Tender Offer L/C Commitment" or, if the Initial Issuing Bank has entered into one or more Assignments and Acceptances, the amount set forth for the Initial Issuing Bank in the Register maintained by the Administrative Agent pursuant to Section 8.07(d) as the Initial Issuing Bank's "Tender Offer L/C Commitment" and (ii) $260,000,000 in the aggregate; in each case as such amount may be reduced pursuant to this Agreement.

"Tender Offer L/C" means a letter of credit substantially in the form of Exhibit J hereto.

"Term A Advance" means an advance made by any Lender under the Term A Facility.

"Term A Borrowing" means a borrowing consisting of simultaneous Term A Advances of the same Type made by the Lenders.

"Term A Commitment" means, with respect to any Lender at any time, the amount set forth opposite such Lender's name on Schedule I hereto under the caption "Term A Commitment" or, if such Lender has entered into one or more Assignments and Acceptances, the amount set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 8.07(d) as such Lender's "Term A Commitment", as such amount may be reduced or amended pursuant to this Agreement.

"Term A Facility" means, at any time, the aggregate Term A Advances of all Lenders at such time.

"Term Advance" means either or both (as the context requires) a Term A Advance or a Term B Advance.

"Term B Advance" means an advance made by any Lender under the Term B Facility.

"Term B Borrowing" means a borrowing consisting of simultaneous Term B Advances of the same Type made by the Lenders.

"Term B Commitment" means, with respect to any Lender at any time, the amount set forth opposite such Lender's name on Schedule I hereto under the caption "Term B Commitment" or, if such Lender has entered into one or more Assignments and Acceptances, the amount set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 8.07(d) as such Lender's "Term B Commitment", as such amount may be reduced or amended pursuant to this Agreement.

"Term B Facility" means, at any time, the aggregate Term B Advances of all Lenders at such time.

"Term Borrowing" means either or both (as the context requires) a Term A Borrowing or a Term B Borrowing.

"Term Commitment" means either a Term A Commitment or a Term B Commitment.

"Term Facilities" means, at any time, the aggregate Term A Commitments and Term B Commitments of all Lenders at such time.

"Term Note" means a promissory note issued by a Borrower payable to the order of any Lender, in substantially the form of Exhibit A-1 hereto, evidencing the indebtedness of that Borrower to such Lender resulting from any Term Advance made by such Lender.

"Termination Date" means (a) in respect of Term A Advances, Letters of Credit, Revolving Credit Advances, Letter of Credit Advances and Swing Line Advances, the earliest of (i) the sixth anniversary of the Closing Date, (ii) the date of termination in whole of the Commitments pursuant to Section 2.05 or 6.01 and (iii) the Conversion Date; and (b) in respect of Term B Advances the earliest of (i) the seventh anniversary of the Closing Date, (ii) the date of termination in whole of the Commitments pursuant to Section 2.05 or 6.01 and (iii) the Conversion Date.

"Total Leverage Ratio" means, at any date of determination, the ratio of (a) (i) all Funded Debt of Holdings and its Subsidiaries outstanding on such date plus (ii) to the extent not otherwise included in subclause (a)(i) of this definition, all Debt of Holdings and its Subsidiaries outstanding on such date that would (or would be required to) appear on the Consolidated balance sheet of Holdings and its Subsidiaries to (b) Consolidated EBITDA of Holdings and its Subsidiaries for the most recently completed Measurement Period prior to such date.

"Trade Letter of Credit" means any Letter of Credit that is issued under the Letter of Credit Facility for the benefit of a supplier of inventory to any Borrower or any of its Subsidiaries to effect payment for such inventory (it being understood that the Issuing Bank shall be entitled to rely upon any certification, notice, instrument, writing, or other communication (including, without limitation, any thereof by telephone or telecopy) by or on behalf of Holdings or any of its Subsidiaries which identifies the beneficiary of any Trade Letter of Credit as a supplier of inventory to any Borrower or any of its Subsidiaries).

"Transaction" means, collectively, (a) the Acquisition, (b) the issuance of the Tender Offer L/C, (c) the Parent Loan, (d) the Asset Transfer, (e) the ALI Subordinated Note Exchange,  (f) all transactions related to the Acquisition and the Asset Transfer, (g) the entering into by the Loan Parties and their applicable Subsidiaries of the Loan Documents and the Related Documents to which they are or are intended to be a party, (h) the refinancing of certain outstanding Debt of Holdings and its Subsidiaries and the termination of all commitments thereunder and (i) the payment of the fees and expenses incurred in connection with the consummation of the foregoing.

"Type" refers to the distinction between Advances bearing interest at the Base Rate and Advances bearing interest at the Eurodollar Rate.

"Unused Revolving Credit Commitment" means, with respect to any Lender at any time, (a) such Lender's Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate principal amount of all Revolving Credit Advances, Swing Line Advances and Letter of Credit Advances made by such Lender (in its capacity as a Lender) and outstanding at such time and (ii) such Lender's Pro Rata Share of (A) the aggregate Available Amount of all Letters of Credit outstanding at such time, (B) the aggregate principal amount of all Letter of Credit Advances made by the Issuing Bank pursuant to Section 2.03(c) and outstanding at such time and (C) the aggregate principal amount of all Swing Line Advances made by the Swing Line Bank pursuant to Section 2.01(c) and outstanding at such time.

"U.S. Subsidiary" means any direct or indirect Subsidiary of Holdings incorporated or formed under the laws of a state of the United States or any territory thereof.

"Voting Interests" means shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

"Weighted Average Life to Maturity" means, on any date and with respect to the Term A Facility, the Term B Facility or any Incremental Loans (as defined in Section 2.17) to supplement either such Facility, an amount equal to (i) the sum of the products of (x) the amount of each scheduled repayment of the Term A Facility, the Term B Facility or Incremental Facility (as defined in Section 2.17), as the case may be, to be made after such date, multiplied by (y) the number of days from such date to the date of such scheduled repayment divided by (ii) the aggregate outstanding principal amount of such Term A Facility, Term B Facility or Incremental Facility, as the case may be.

"Welfare Plan" means a welfare plan (as defined in Section 3(1) of ERISA) that is maintained for employees of any Loan Party or in respect of which any Loan Party could reasonably be expected to have liability.

"Withdrawal Liability" has the meaning specified in Part I of Subtitle E of Title IV of ERISA.

"WYNCO" means WYNCO LLC, a Delaware limited liability company.

	Computation of Time Periods; Other Definitional Provisions

.  In this Agreement in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding".  References in the Loan Documents to any agreement or contract "as amended" shall mean and be a reference to such agreement or contract as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

	Accounting Terms

.  All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the Consolidated financial statements of Holdings and its Subsidiaries referred to in Section 4.01(g) ("GAAP"); provided that GAAP shall include and take account of all effects resulting from the change in FASB142 enacted prior to the Closing Date (whether or not the formal effective date with respect to some applications falls thereafter).

	Currency Equivalents Generally

.  Any amount specified in this Agreement (other than in Articles II, VII and VIII) or any of the other Loan Documents to be in U.S. dollars shall also include the equivalent of such amount in any currency other than U.S. dollars, such equivalent amount to be determined at the rate of exchange quoted by Bank of America in Charlotte, North Carolina at the close of business on the Business Day immediately preceding any date of determination thereof, to prime banks in New York, New York for the spot purchase in the New York foreign exchange market of such amount in U.S. dollars with such other currency.

	

AMOUNTS AND TERMS OF THE ADVANCES

AND THE LETTERS OF CREDIT

	The Advances and the Letters of Credit; Subsidiary Borrowers

.  (a)  Term A Facility and Term B Facility:  The Term Advances.  Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make a single advance (consisting of a Term Advance pursuant to the Term A Facility in an amount equal to its Pro Rata Share of the Term A Commitment and a Term Advance pursuant to the Term B Facility in an amount equal to its Pro Rata Share of the Term B Commitment) in U.S. dollars to the Company on the Closing Date.  The Term A Borrowing shall consist of Term A Advances made simultaneously by the Lenders in accordance with their respective Pro Rata Shares of the Term A Facility.  The Term B Borrowing shall consist of Term B Advances made simultaneously by the Lenders in accordance with their respective Pro Rata Shares of the Term B Facility.  Amounts borrowed under this Section 2.01 and repaid or prepaid may not be reborrowed.

(b)The Revolving Credit Advances.  Subject to Section 2.01(e), each Lender severally agrees, on the terms and conditions hereinafter set forth, to make advances (each, a "Revolving Credit Advance") in U.S. dollars to any Borrower from time to time on any Business Day on or after the Closing Date until the Termination Date, in each case in an amount not to exceed the Unused Revolving Credit Commitment of such Lender at such time.  Each Revolving Credit Borrowing shall be in an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof (other than a Borrowing the proceeds of which shall be used solely to repay or prepay in full outstanding Swing Line Advances or the outstanding Letter of Credit Advances) or, if less, the amount of the aggregate Unused Revolving Credit Commitments at such time.  Each Revolving Credit Borrowing shall consist of Revolving Credit Advances made simultaneously by the Lenders in accordance with their respective Pro Rata Shares of the Revolving Credit Facility.  Within the limits of each Lender's Unused Revolving Credit Commitment in effect from time to time, any Borrower may borrow under this Section 2.01(b), prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(b).

(c)The Swing Line Advances.  Subject to Section 2.01(e), any Borrower may request the Swing Line Bank to make, and the Swing Line Bank shall make, on the terms and conditions hereinafter set forth, Swing Line Advances to the relevant Borrower from time to time on any Business Day on or after the Closing Date until the Termination Date (i) in an aggregate amount not to exceed $50,000,000 at any time outstanding (the "Swing Line Facility") and (ii) in an amount for each such Swing Line Borrowing not to exceed the aggregate Unused Revolving Credit Commitments of the Lenders at such time.  No Swing Line Advance shall be used for the purpose of funding the payment of principal of any other Swing Line Advance.  Each Swing Line Borrowing shall be in an amount of $1,000,000 or an integral multiple of $250,000 in excess thereof and shall be made as a Base Rate Advance.  Within the limits of the first sentence of this Section 2.01(c), so long as the Swing Line Bank, in its sole discretion, elects to make Swing Line Advances, each Borrower may borrow under this Section 2.01(c), repay pursuant to Section 2.04(c) or prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(c).

(d)Letters of Credit.  (i)  Subject to Section 2.01(e), the Issuing Bank agrees, in reliance upon the Agreements of the Lenders set forth in Section 2.03 and on the terms and conditions hereinafter set forth, to issue letters of credit (the "Letters of Credit") in U.S. dollars for the account of the relevant Borrower from time to time (a) in respect of the Tender Offer L/C, only on the Closing Date and no other day before or after the Closing Date and (b) in respect of other Letters of Credit, on any Business Day on or after the Closing Date until 5 days before the scheduled Termination Date (i) in an Available Amount for each such Letter of Credit issued by such Issuing Bank not to exceed at any time (A) in respect of the Tender Offer L/C, the unused Issuing Bank's Tender Offer L/C Commitment at such time; (B) in respect of Standby Letters of Credit and Trade Letters of Credit, the unused Issuing Bank's Operational Letter of Credit Commitment at such time and (ii) in an aggregate Available Amount for all Letters of Credit not to exceed the lesser of (A) the Letter of Credit Facility at such time and (B) the aggregate Unused Revolving Credit Commitments of the Lenders at such time.  No Trade Letter of Credit shall have an expiration date later than the earlier of (1) 180 days after the issuance thereof and (2) 5 days prior to the scheduled Termination Date.  No Standby Letter of Credit shall have an expiration date (including all rights of any Borrower or the beneficiary of such Standby Letter of Credit to require renewal) later than the earlier of (x) 5 days prior to the scheduled Termination Date and (y) one year after the date of issuance thereof, but any such Standby Letter of Credit may by its terms be renewable annually on the terms set forth in clause (ii) of this Section 2.01(d).  Within the limits of the Letter of Credit Facility, and subject to the limits referred to above, any Borrower may request the issuance of Letters of Credit (other than the Tender Offer L/C) under this Section 2.01(d)(i), repay any Letter of Credit Advances resulting from drawings thereunder pursuant to Section 2.03(c) and request the issuance of additional Letters of Credit (other than the Tender Offer L/C) under this Section 2.01(d)(i).  Once the Tender Offer L/C is drawn and repaid it shall not be available for re-drawing.

(ii)Each Standby Letter of Credit may by its terms be renewable annually upon notice (a "Notice of Renewal") given to the Issuing Bank and the Administrative Agent on or prior to any date for notice of renewal set forth in such Letter of Credit but in any event at least three Business Days prior to the date of the proposed renewal of such Standby Letter of Credit and upon fulfillment of the applicable conditions set forth in Article III unless such Issuing Bank has notified the beneficiary (with a copy to the Administrative Agent) on or prior to the date for notice of termination set forth in such Letter of Credit but in any event at least 30 Business Days prior to the date of automatic renewal of its election not to renew such Standby Letter of Credit (a "Notice of Termination"); provided that the terms of each Standby Letter of Credit that is automatically renewable annually (A) shall require the Issuing Bank to give the beneficiary of such Standby Letter of Credit notice of any Notice of Termination, (B) shall permit such beneficiary, upon receipt of such notice, to draw under such Standby Letter of Credit prior to the date such Standby Letter of Credit otherwise would have been automatically renewed and (C) shall not permit the expiration date (after giving effect to any renewal) of such Standby Letter of Credit in any event to be extended to a date later than 5 days prior to the scheduled Termination Date.  If either a Notice of Renewal is not given by the relevant Borrower or a Notice of Termination is given by the Issuing Bank pursuant to the immediately preceding sentence, such Standby Letter of Credit shall expire on the date on which it otherwise would have been automatically renewed; provided, however, that in the absence of receipt of a Notice of Renewal and, in the absence of any timely notice given by the relevant Borrower to the Administrative Agent requesting there be no automatic renewal, the Issuing Bank may in its discretion, unless instructed to the contrary by the Administrative Agent, deem that a Notice of Renewal had been timely delivered and, in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under this Agreement.

(iii)The Issuing Bank shall not issue any Letter of Credit if:

(A)any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any Requirements of Law applicable to the Issuing Bank or any request or directive (whether or not having the force of law, but if not having the force of law, being a request or directive with which the Issuing Bank is accustomed to complying) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Issuing Bank in good faith deems material to it; or

(B)the issuance of such Letter of Credit would violate one or more policies of the Issuing Bank.

(iv)Applicability of ISP98 and UCP.  Unless otherwise expressly agreed by the Issuing Bank and the relevant Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the "International Standby Practices 1998" published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the "ICC") at the time of issuance (including the ICC decision published by the Commission on Banking Technique and Practice on April 6, 1998 regarding the European single currency (euro)), shall apply to each commercial Letter of Credit.

(v)Existing Letters of Credit.   It is understood and agreed that the Existing Letters of Credit shall be deemed to be Letters of Credit for all purposes under this Agreement and the other Loan Documents and any issuing bank in respect of the Existing Letters of Credit shall be deemed to be an Issuing Bank for all purposes under this Agreement and the other Loan Documents.

(e)Restrictions on Drawings Under the Revolving Credit Facility. No more than an aggregate principal amount of $50,000,000 may be drawn under the Revolving Credit Facility by the Subsidiary Borrowers.

(f)New Subsidiary Borrowers.  At any time at which no Default has occurred and is continuing, the Company may designate one or more of its direct or indirect wholly-owned U.S. Subsidiaries as a "Subsidiary Borrower" by delivery to the Administrative Agent of a Subsidiary Borrowing Agreement executed by the Company and such Subsidiary, and upon such delivery such Subsidiary shall be a Subsidiary Borrower for all purposes of this Agreement.

(g)Clean-Down.  Notwithstanding the provisions of Sections 2.01(b), 2.01(c) and 2.01(d), no Borrowings may be made under Section 2.01(b) or 2.01(c), and no Letters of Credit may be issued under Section 2.01(d), during any Clean-Down Period, unless the sum of the aggregate principal amount of Revolving Credit Advances, Letter of Credit Advances and Swing Line Advances plus the aggregate Available Amount of Letters of Credit outstanding after giving effect to such Borrowing or the issuance of such Letter of Credit shall not exceed $200,000,000.

	Making the Advances

.  (a) Except as otherwise provided in Section 2.02(b) or 2.03 or in respect of any Borrowing requested to be made on the date of the Initial Extension of Credit, in which case notice will be given not later than 12:00 noon (New York time) on the Business Day prior to the date of the Initial Extension of Credit, each Borrowing (other than a Swing Line Borrowing) shall be made on notice, given not later than 11:00 A.M. (New York time) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing comprised of Eurodollar Rate Advances, or on the first Business Day prior to the date of the proposed Borrowing in the case of a Borrowing comprised of Base Rate Advances, by the relevant Borrower to the Administrative Agent, which shall give prompt notice thereof to each Lender by telecopier.  Each notice of a Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed immediately in writing, or by telecopier, in substantially the form of Exhibit B-1 hereto, shall be duly executed by a Responsible Officer of the relevant Borrower, and shall specify therein: (i) the requested date of such Borrowing (which shall be a Business Day); (ii) the Facility under which such Borrowing is requested to be made; (iii) the Type of Advances requested to comprise such Borrowing; (iv) the requested aggregate amount of such Borrowing; and (v) in the case of a Borrowing comprised of Eurodollar Rate Advances, the requested duration of the initial Interest Period for each such Advance.  Each Lender shall, before 11:00 A.M. (New York time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent's Account, in same day funds, such Lender's Pro Rata Share of such Borrowing.  After the Administrative Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the relevant Borrower by crediting such account as is specified to the Administrative Agent by that Borrower; provided, however, that, in the case of any Revolving Credit Borrowing, the Administrative Agent shall first make a portion of such funds equal to the aggregate principal amount of any Swing Line Advances and Letter of Credit Advances made by the Swing Line Bank or the Issuing Bank, as the case may be, and by any Lender and outstanding on the date of such Revolving Credit Borrowing, plus accrued and unpaid interest thereon to and as of such date, available to such Swing Line Bank or the Issuing Bank, as applicable, and such other Lenders for repayment of such Swing Line Advances and Letter of Credit Advances.

(b)(i)  Each Swing Line Borrowing shall be made on notice, given not later than 11:00 A.M. (New York time) on the date of the proposed Swing Line Borrowing, by the Company to the Swing Line Bank and the Administrative Agent.  Each notice of a Swing Line Borrowing (a "Notice of Swing Line Borrowing") shall be by telephone, confirmed immediately in writing, or by telecopier, shall be duly executed by a Responsible Officer of the Company, and shall specify therein:  (A)  the requested date of such Borrowing (which shall be a Business Day); (B) the requested amount of such Borrowing; and (C) the requested maturity of such Borrowing (which maturity shall be no later than the seventh day after the requested date of such Borrowing).  The Swing Line Bank will make the amount thereof available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent's Account, in same day funds.  After the Administrative Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Administrative Agent will make such funds available to the Company by crediting such account as is specified to the Administrative Agent by the Company.

(ii)Upon demand by the Swing Line Bank with a copy of such demand to the Administrative Agent (which shall give prompt notice thereof to each Lender), each Lender having a Revolving Credit Commitment shall purchase from the Swing Line Bank, and the Swing Line Bank shall sell and assign to each such Lender, such Lender's Pro Rata Share of such outstanding Swing Line Borrowing as of the date of such demand, by making available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent's Account for the account of the Swing Line Bank, in same day funds, an amount equal to such Pro Rata Share.  Promptly after receipt of such funds, the Administrative Agent shall transfer such funds to the Swing Line Bank at its Applicable Lending Office.  Each Lender having a Revolving Credit Commitment hereby agrees to purchase its Pro Rata Share of an outstanding Swing Line Borrowing on (A) the Business Day on which demand therefor is made by the Swing Line Bank so long as notice of such demand is given not later than 12:00 Noon (New York time) on such Business Day or (B) the first Business Day next succeeding such demand if notice of such demand is given after such time.  Each Borrower hereby agrees to each such sale and assignment.  Upon any such assignment by the Swing Line Bank to any Lender having a Revolving Credit Commitment of a portion of a Swing Line Borrowing, the Swing Line Bank represents and warrants to such Lender that the Swing Line Bank is the legal and beneficial owner of such interest being assigned by it, but makes no other representation or warranty and assumes no responsibility with respect to such Swing Line Borrowing, the Loan Documents or any Loan Party.  If and to the extent that any Lender having a Revolving Credit Commitment shall not have so made its Pro Rata Share of any applicable Swing Line Borrowing available to the Administrative Agent in accordance with the foregoing provisions of this Section 2.02(b)(ii), such Lender hereby agrees to pay to the Administrative Agent forthwith on demand the amount of its Pro Rata Share, together with interest thereon, for each day from the date of demand by the Swing Line Bank therefor until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate.  If such Lender shall pay to the Administrative Agent the amount of its Pro Rata Share for the account of the Swing Line Bank on any Business Day, such amount so paid in respect of principal shall constitute a Swing Line Advance made by such Lender on such Business Day for all purposes of this Agreement, and the outstanding principal amount of the Swing Line Advance made by the Swing Line Bank shall be reduced by such amount on such Business Day.

(iii)The Obligation of each Lender having a Revolving Credit Commitment to purchase its Pro Rata Share of each outstanding Swing Line Borrowing upon demand by the Swing Line Bank therefor pursuant to clause (ii) of this Section 2.02(b) shall be absolute, unconditional and irrevocable, and shall be made strictly in accordance with the terms of clause (ii) of this Section 2.02(b) under all circumstances, including, without limitation, the following circumstances:

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

(B)the existence of any claim, set-off, defense or other right that such Lender may have at any time against the Swing Line Bank, any Borrower or any other Person, whether in connection with the transactions contemplated by the Loan Documents or any unrelated transaction;

(C)the occurrence and continuance of any Default or Event of Default; or

(D)any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

(c)Anything in subsection (a) of this Section 2.02 to the contrary notwithstanding, (i) the Borrowers may not select Eurodollar Rate Advances for the initial Borrowing hereunder and (ii) the Borrowers may not select Interest Periods for Eurodollar Rate Advances comprising part of any Borrowing that have a duration of more than one month during the period from the date hereof to 90 days after the Closing Date (or such earlier date as shall be specified in its sole discretion by the Administrative Agent (in consultation with the Lead Arranger) in a written notice to the Borrowers and the Lenders).  In addition, (A) the Revolving Credit Advances may not be outstanding as part of more than 15 separate Borrowings and (B) no more than five separate Advances may be outstanding under either the Term A Facility or the Term B Facility at any one time.

(d)Each Notice of Borrowing and Notice of Swing Line Borrowing shall be irrevocable and binding on the relevant Borrower.  In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the relevant Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.

(e)Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's Pro Rata Share of such Borrowing, the Administrative Agent may assume that such Lender has made the amount of such Pro Rata Share available to the Administrative Agent on the date of such Borrowing in accordance with subsection (a) or (b) of this Section 2.02, as applicable, and the Administrative Agent may, in reliance upon such assumption, make available to the relevant Borrower on such date a corresponding amount.  If and to the extent that such Lender shall not have so made the amount of such Pro Rata Share available to the Administrative Agent, such Lender and the relevant Borrower severally agree to repay or to pay to the Administrative Agent forthwith on demand such corresponding amount, together with interest thereon, for each day from the date such amount is made available to the relevant Borrower until the date such amount is repaid or paid to the Administrative Agent, at (i) in the case of such Borrower, the interest rate applicable at such time under Section 2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate.  If such Lender shall pay to the Administrative Agent such corresponding amount, such amount so paid shall constitute such Lender's Advance as part of such Borrowing for all purposes under this Agreement.

(f)The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

	Issuance of and Drawings and Reimbursement Under Letters of Credit

.  (a)  Request for Issuance.  Except in respect of the Tender Offer L/C, in which case notice will be given not later than 12:00 noon (New York time) on the Business Day prior to the Closing Date, each Letter of Credit shall be issued upon notice, given not later than 11:00 A.M. (New York time) on the fifth Business Day prior to the date of the proposed issuance of such Letter of Credit (or such later day as the Issuing Bank in its sole discretion shall agree), by the Company to the Issuing Bank, which shall give to the Administrative Agent prompt notice thereof by telecopier.  Each notice of issuance of a Letter of Credit (a "Notice of Issuance") shall be in writing, or by telex or telecopier, shall be duly executed by a Responsible Officer of the Company, and shall specify therein:  (i) the requested date of such issuance (which shall be a Business Day); (ii) the requested Available Amount of such Letter of Credit; (iii) the requested expiration date of such Letter of Credit (which shall comply with the requirements of Section 2.01(d)); (iv) the name and address of the proposed beneficiary of such Letter of Credit; and (v) the proposed form of such Letter of Credit (which, in the case of the Tender Offer L/C, shall be substantially in the form set out in Exhibit M), and shall be accompanied by such application and agreement for letters of credit as the Issuing Bank may specify to the Company for use in connection with such requested Letter of Credit (a "Letter of Credit Agreement").  If the requested form of such Letter of Credit is acceptable to the Issuing Bank in its sole discretion, the Issuing Bank will, upon fulfillment of the applicable conditions set forth in Article III, make such Letter of Credit available to the Company at its office referred to in Section 8.02 or as otherwise agreed with the Company in connection with the issuance of such Letter of Credit.  If and to the extent that the provisions of any Letter of Credit Agreement shall conflict with this Agreement, the provisions of this Agreement shall govern. 

(b)Letter of Credit Reports.  The Issuing Bank shall furnish to the Administrative Agent and each Lender having a Revolving Credit Commitment on the first Business Day of each month a written report summarizing issuance and expiration dates and the Available Amount of Letters of Credit issued during the immediately preceding month and drawings during such month under each such Letters of Credit.

(c)Drawing and Reimbursement.  (i) For all Letters of Credit, other than the Tender Offer L/C, the payment by the Issuing Bank of a draft drawn under any Letter of Credit shall constitute for all purposes of this Agreement the making by the Issuing Bank of a Letter of Credit Advance, which shall be a Base Rate Advance, in the amount of such draft.  Other than with respect to the Tender Offer L/C, upon demand by the Issuing Bank to each Lender having a Revolving Credit Commitment, with a copy of such demand to the Administrative Agent, each such Lender shall purchase from the Issuing Bank, and the Issuing Bank shall sell and assign to each such Lender, such Lender's Pro Rata Share of such outstanding Letter of Credit Advance as of the date of such purchase, by making available for the account of its Applicable Lending Office to the Administrative Agent for the account of the Issuing Bank, at the Administrative Agent's Account, in same day funds, an amount equal to the portion of the outstanding principal amount of such Letter of Credit Advance to be purchased by such Lender.  Promptly after receipt thereof, the Administrative Agent shall transfer such funds to the Issuing Bank.  The Company hereby agrees to each such sale and assignment.  Each Lender having a Revolving Credit Commitment agrees to purchase its Pro Rata Share of an outstanding Letter of Credit Advance (other than an advance under the Tender Offer L/C) on (A) the Business Day on which demand therefor is made by the Issuing Bank so long as notice of such demand is given not later than 11:00 A.M. (New York time) on such Business Day or (B) the first Business Day next succeeding such demand if notice of such demand is given after such time.  Upon any such assignment by the Issuing Bank to any other Lender having a Revolving Credit Commitment of a portion of such Letter of Credit Advance, the Issuing Bank represents and warrants to such other Lender that the Issuing Bank is the legal and beneficial owner of such interest being assigned by it, free and clear of any liens, but makes no other representation or warranty and assumes no responsibility with respect to such Letter of Credit Advance, the Loan Documents or any Loan Party.  If and to the extent that any Lender having a Revolving Credit Commitment shall not have so made the amount of such Letter of Credit Advance available to the Administrative Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand such amount, together with interest thereon, for each day from the date of demand by the Issuing Bank until the date such amount is paid to the Administrative Agent, at the Federal Funds Rate, for its account or the account of the Issuing Bank, as applicable.  If such Lender shall pay to the Administrative Agent such amount for the account of the Issuing Bank on any Business Day, such amount so paid in respect of principal shall constitute a Letter of Credit Advance made by such Lender on such Business Day for all purposes of this Agreement, and the outstanding principal amount of the Letter of Credit Advance made by the Issuing Bank shall be reduced by such amount on such Business Day.

(ii)For all Letters of Credit, other than the Tender Offer L/C, the Obligation of each Lender having a Revolving Credit Commitment to purchase its Pro Rata Share of each outstanding Letter of Credit Advance upon demand by the Issuing Bank therefor pursuant to clause (i) of this Section 2.03(c) shall be absolute, unconditional and irrevocable, and shall be made strictly in accordance with the terms of clause (i) of this Section 2.03(c) under all circumstances, including, without limitation, the following circumstances:

(A)any lack of validity or enforceability of any Loan Document, any Letter of Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto (collectively, the "L/C Related Documents");

(B)the existence of any claim, set-off, defense or other right that such Lender may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Bank, any Borrower or any other Person, whether in connection with the transactions contemplated by the L/C Related Documents or any unrelated transaction;

(C)the occurrence and continuance of any Default or Event of Default; or

(D)any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

(iii)The payment by the Initial Issuing Bank of a drawing under the Tender Offer L/C shall be repaid upon such drawing in the amount thereof in same day funds by (i) release of amounts deposited in the L/C Cash Collateral Account pursuant to Section 2.14, (ii) the lenders or other providers of credit under the Bridge Facility making a direct reimbursement to the Initial Issuing Bank on account of the Company and (iii) the Company using proceeds received from the issuance and sale of the Debt Securities; in each case to the extent applicable, pursuant to documentation satisfactory to the Initial Issuing Bank (which shall require, among other things, that amounts be released to the Initial Issuing Bank immediately upon notice by the Initial Issuing Bank of a drawing under the Tender Offer L/C) and in an aggregate amount not in excess of the Available Amount of the Tender Offer L/C.  The Tender Offer L/C will be deemed to be repaid in full for all purposes of this Agreement (which shall have the effect of, subject to the proviso below, increasing the amount of the Unused Revolving Credit Commitment by such amount which is deemed to be repaid) when (a) the aggregate of the sum of (i) the amount deposited in the L/C Cash Collateral Account pursuant to Section 2.14, (ii) the face amount of the backstop letter of credit, amount of cash collateral (or other credit support acceptable to the Administrative Agent and Initial Issuing Bank) or other cash proceeds of the Bridge Facility; in each case deposited in favor of, and available to be drawn immediately by, the Initial Issuing Bank upon a drawing under the Tender Offer L/C and (iii) an amount of proceeds received from the issuance and sale of the Debt Securities is held subject to the Collateral Pledge Agreement, is equal to the Available Amount of such Tender Offer L/C, provided that if at any time the proceeds specified in this clause (iii) are released to or for the account of the purchasers of the Debt Securities and the Tender Offer L/C shall not have by then otherwise expired according to its terms, the Tender Offer L/C shall then again be a Letter of Credit for all purposes of this Agreement until such time as it expires in accordance with its terms or is otherwise cash collateralized or supported by a backstop letter of credit or other credit arrangements, in each case in an amount sufficient to secure any claims thereunder and pursuant to documentation satisfactory to the Initial Issuing Bank or (b) it is returned for cancellation by the beneficiary thereof to the Initial Issuing Bank.

(d)Failure to Make Letter of Credit Advances.  The failure of any Lender to make the Letter of Credit Advance to be made by it on the date specified in Section 2.03(c) shall not relieve any other Lender of its obligation hereunder to make its Letter of Credit Advance on such date, but no Lender shall be responsible for the failure of any other Lender to make the Letter of Credit Advance to be made by such other Lender on such date.

	Repayment of Advances

.  (a)  Term Advances.  The Company shall repay to the Administrative Agent for the ratable account of the Lenders, by way of quarterly payments, the aggregate principal amount of the Term A Advances and Term B Advances outstanding on the following dates in the respective amounts set forth opposite such dates (which amounts shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.06):

	
Date
	
Term A Facility
	
Term B Facility

	
March 30, 2002

June 30, 2002

September 30, 2002

December 31, 2002
	
$5,000,000

$5,000,000

$5,000,000

$5,000,000
	
$1,062,500

$1,062,500

$1,062,500

$1,062,500

	
March 30, 2003

June 30, 2003

September 30, 2003

December 31, 2003
	
$7,500,000

$7,500,000

$7,500,000

$7,500,000
	
$1,062,500

$1,062,500

$1,062,500

$1,062,500

	
March 30, 2004

June 30, 2004

September 30, 2004

December 31, 2004
	
$7,500,000

$7,500,000

$7,500,000

$7,500,000
	
$1,062,500

$1,062,500

$1,062,500

$1,062,500

	
March 30, 2005

June 30, 2005

September 30, 2005

December 31, 2005
	
$7,500,000

$7,500,000

$7,500,000

$7,500,000
	
$1,062,500

$1,062,500

$1,062,500

$1,062,500

	
March 30, 2006

June 30, 2006

September 30, 2006

December 31, 2006
	
$7,500,000

$7,500,000

$7,500,000

$7,500,000
	
$1,062,500

$1,062,500

$1,062,500

$1,062,500

	
March 30, 2007

June 30, 2007

September 30, 2007

On the sixth (6th) anniversary of the Closing Date

December 31, 2007
	
$8,750,000

$8,750,000

$8,750,000

$8,750,000

-
	
$1,062,500

$1,062,500

$1,062,500

-

$1,062,500

	
March 30, 2008

June 30, 2008

September 30, 2008

On the seventh (7th) anniversary of the Closing Date
	
-

-

-

-
	
$1,062,500

$1,062,500

$1,062,500

$396,312,500

provided, however, that the final principal repayment installment of the Term Advances shall be repaid on the applicable Termination Date (including the Conversion Date, if applicable) and in any event shall be in an amount equal to the aggregate principal amount of all applicable Term Advances outstanding on such date.

(b)Revolving Credit Advances.  Each relevant Borrower that has outstanding Revolving Credit Advances shall repay to the Administrative Agent for the ratable account of the Lenders on the Termination Date the aggregate principal amount of all Revolving Credit Advances outstanding on such date.

(c)Swing Line Advances.  Each relevant Borrower shall repay to the Administrative Agent for the account of the Swing Line Bank and each Lender that has made a Swing Line Advance on the earlier of (i) the maturity date for each Swing Line Advance (as specified in the applicable Notice of Swing Line Borrowing (which maturity shall be no later than the seventh day after the date on which such Swing Line Borrowing was initially made by the Swing Line Bank)) and (ii) the Termination Date the principal amount of each such Swing Line Advance made by the Swing Line Bank and each such Lender and outstanding on such date.

(d)Letter of Credit Advances.  (i)  Each relevant Borrower shall repay to the Administrative Agent for the account of the Issuing Bank and each Lender that has made a Letter of Credit Advance on the earlier of (A) the date of demand therefor (provided such demand is given by the Administrative Agent to the Company prior to 11:00 A.M. (New York time) on such date, and if not given by such time, such payment shall be made on the next succeeding Business Day thereafter) and (B) the Termination Date the principal amount of each such Letter of Credit Advance made by the Issuing Bank and each such Lender and outstanding on such date.

(ii)The Obligations of each Borrower under this Agreement, any Letter of Credit Agreement and any L/C Related Document shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such Letter of Credit Agreement or such other agreement or instrument under all circumstances, including, without limitation, the following circumstances:

(A)any lack of validity or enforceability of any L/C Related Document;

(B)any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of any Borrower in respect of any L/C Related Document or any other amendment or waiver of or any consent to departure from all or any of the L/C Related Documents;

(C)the existence of any claim, set-off, defense or other right that any Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Bank or any other Person, whether in connection with the transactions contemplated by the L/C Related Documents or any unrelated transaction;

(D)any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(E)payment by the Issuing Bank under a Letter of Credit against presentation of a draft, certificate or other document that does not strictly comply with the terms of such Letter of Credit;

(F)any exchange, release or nonperfection of any Collateral or other collateral, or any release or amendment or waiver of or consent to departure from the Guaranties or any other guarantee, for all or any of the Obligations of any Borrower in respect of the L/C Related Documents; or

(G)any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including, without limitation, any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Borrower or any guarantor.

	Termination or Reduction of the Commitments

.  (a)  Optional.  The Company may, upon at least five Business Days' notice to the Administrative Agent, terminate the Term Commitment, the Letter of Credit Facility or the Unused Revolving Credit Commitments; provided, however, that each partial reduction of a Facility shall be in an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof or, if less, the aggregate amount of such Facility.  Each reduction of the Term Commitment pursuant to this subsection (a) shall be applied to the principal repayment installments thereof on a pro rata basis.

(b)Mandatory.  (i)  The Term Facilities shall be automatically and permanently reduced on the date of the Term Borrowing (after giving effect to the Term Borrowing), and from time to time thereafter upon each repayment or prepayment of the outstanding Term Advances, by an amount equal to the amount by which (A) the Term Facilities immediately prior to such reduction exceeds (B) the aggregate principal amount of all Term Advances outstanding at such time.

(ii)The Revolving Credit Facility shall be automatically and permanently reduced on each date on which the prepayment of Revolving Credit Advances outstanding thereunder is required to be made pursuant to Section 2.06(b)(i) or 2.06(b)(ii) by an amount equal to the applicable Reduction Amount.

(iii)The Letter of Credit Facility shall be automatically and permanently reduced on the date of each reduction in the Revolving Credit Facility by an amount equal to the amount, if any, by which (A) the Letter of Credit Facility on such date exceeds (B) the Revolving Credit Facility on such date, after giving effect to such reduction of the Revolving Credit Facility.

(c)Application of Commitment Reductions.  Upon each reduction of a Facility pursuant to this Section 2.05, the Commitment of each Lender under such Facility shall be reduced by such Lender's Pro Rata Share of the amount by which such Facility is reduced.

	Prepayments

.  (a)  Optional.  Any Borrower may, upon at least one Business Day's notice in the case of Base Rate Advances and three Business Days' notice in the case of Eurodollar Rate Advances, in each case to the Administrative Agent stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given, the relevant Borrower shall, prepay the aggregate principal amount of the Advances comprising part of the same Borrowing and outstanding on such date, in whole or ratably in part; provided, however, that (i) each partial prepayment shall be in an aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) no such prepayment of a Eurodollar Rate Advance shall be made other than on the last day of an Interest Period therefor, provided that if any such prepayment of a Eurodollar Rate Advance is made on a date other than the last day of an Interest Period therefor, the relevant Borrower shall also pay any amounts owing in respect of such Eurodollar Rate Advance pursuant to Section 8.04(c).  Each prepayment of the outstanding Term Advances pursuant to this subsection (a) shall be applied ratably to the principal repayment installments thereof.

(b)Mandatory.  (i)  If the Total Leverage Ratio is equal to or greater than 3.25:1.0, the Company shall, on the earlier of (A) the Business Day following the date on which Holdings delivers to the Administrative Agent and the Lender Parties the Required Financial Information and (B) 90 days after the end of each Fiscal Year, commencing with such audited Consolidated financial statements for the Fiscal Year ending December 31, 2002 prepay an aggregate principal amount of the Advances comprising part of the same Borrowings equal to 50% of the amount of Excess Cash Flow for such Fiscal Year.  Each prepayment of Advances pursuant to this clause (i) shall be applied, first, to the Term Facilities and to the principal repayment installments thereof on a pro rata basis and thereafter, to the Revolving Credit Facility in the manner set forth in clause (vi) of this Section 2.06(b).

(ii)The Company shall, within five (5) Business Days after the date of receipt of the Net Cash Proceeds by Holdings or any of its Subsidiaries from (A) the sale, lease, transfer or other disposition of any property or assets ("Asset Dispositions") of Holdings or any of its Subsidiaries (other than (1) Asset Dispositions made pursuant to Section 5.02(e)(i), (ii), (vi) or (viii) or (2)  Net Cash Proceeds which are reinvested within 180 days after receipt in assets used or useful in the business of Holdings and its Subsidiaries (including, for the avoidance of doubt, all Equity Interests in, or the property and assets comprising a division or business unit or all or a substantial part of the business of, any Person), or in respect of any reinvestment for which an expenditure of less than $5,000,000 is made, a binding contract in respect of application of such proceeds is entered into within such six month period and the application thereof is made reasonably soon thereafter); (B) the incurrence or issuance by Holdings or any of its Subsidiaries of any Debt (other than Debt expressly permitted to be incurred or issued pursuant to (1) Section 5.02(b)(i) or (ii), or Section 5.02(b)(iii)(A), (D), (E), (F), (G), (H) and (I), and (2) Section 5.02(b)(iii)(J) to the extent such Net Cash Proceeds are expended within 180 days after receipt for the purchase or other acquisition of property and assets during such period (to the extent otherwise permitted to be expended under this Agreement); (C) the issuance or sale by Holdings or any of its Subsidiaries of any Equity Interests therein (other than Equity Interests permitted to be issued and sold under the Loan Documents and which are used for purposes permitted under the Loan Documents and are so applied to such permitted purposes within any permitted period specified in the Loan Documents) and (D) any Extraordinary Receipt received by or paid to or for the account of Holdings or any of its Subsidiaries and not otherwise included in subclause (ii)(A), (ii)(B) or (ii)(C) of this Section 2.06(b), prepay an aggregate principal amount of the Advances comprising part of the same Borrowings equal to 100% of the amount of such Net Cash Proceeds included in subclauses (ii)(A), (ii)(B) and (ii)(D) of this Section 2.06(b)  and 50% of the amount of such Net Cash Proceeds included in subclause (ii)(C) of this Section 2.06(b) which are not reinvested within 180 days after receipt in assets used or useful in the business of Holdings and its Subsidiaries (including, for the avoidance of doubt, all Equity Interests in, or the property and assets comprising a division or business unit or all or a substantial part of the business of, any Person).  Each prepayment of Advances pursuant to this clause (ii) shall be applied, first, to the Term Facilities and to the principal repayment installments thereof on a pro rata basis, and thereafter, to the Revolving Credit Facility in the manner set forth in clause (v) of this Section 2.06(b).

(iii)The Company shall, on each Business Day, prepay an aggregate principal amount of the Revolving Credit Advances comprising part of the same Borrowings, the Letter of Credit Advances and the Swing Line Advances and, if applicable, deposit an amount into the L/C Cash Collateral Account equal to the amount by which (A) the sum of (1) the aggregate principal amount of all Revolving Credit Advances, Letter of Credit Advances and Swing Line Advances outstanding on such Business Day and (2) the aggregate Available Amount of all Letters of Credit outstanding on such Business Day exceeds (B)  the Revolving Credit Facility on such Business Day (after giving effect to any permanent reduction thereof pursuant to Section 2.05 on such Business Day).

(iv)The Company shall, on each Business Day, pay to the Administrative Agent for deposit into the L/C Cash Collateral Account an amount sufficient to cause the aggregate amount on deposit in the L/C Cash Collateral Account on such Business Day to equal the amount by which (A) the aggregate Available Amount of all Letters of Credit outstanding on such Business Day exceeds (B) the Letter of Credit Facility on such Business Day (after giving effect to any permanent reduction thereof pursuant to Section 2.05 on such Business Day).

(v)The Company shall pay to the Administrative Agent, on the first day of each Clean-Down Period, an amount equal to the amount by which the aggregate principal amount of the Revolving Credit Advances, the Letter of Credit Advances and the Swing Line Advances plus the aggregate Available Amount of outstanding Letters of Credit exceeds $200,000,000.

(vi)Prepayments of the Revolving Credit Facility made pursuant to clause (i), (ii), (iii), (iv) or (v) of this Section 2.06(b), first, shall be applied to prepay Letter of Credit Advances outstanding at such time until all such Letter of Credit Advances are paid in full, second, shall be applied to prepay Swing Line Advances outstanding at such time until all such Swing Line Advances are paid in full, third, shall be applied to prepay Revolving Credit Advances comprising part of the same Borrowings and outstanding at such time until all such Revolving Credit Advances are paid in full, and fourth, shall be deposited into the L/C Cash Collateral Account to cash collateralize 100% of the Available Amount of all Letters of Credit outstanding at such time; and, in the case of prepayments of the Revolving Credit Facility required pursuant to clause (i) or (ii) of this Section 2.06(b), the amount remaining, if any, after the prepayment in full of all Advances outstanding at such time and the 100% cash collateralization of the aggregate Available Amount of all Letters of Credit outstanding at such time (the sum of such prepayment amounts, cash collateralization amounts and remaining amount being, collectively, the "Reduction Amount") may be retained by the Borrowers for use in the ordinary course of its business, and the Revolving Credit Facility shall be automatically and permanently reduced as set forth in Section 2.05(b)(ii).  Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account, such funds shall be applied (without any further action by or notice to or from any Borrower or any other Loan Party) to reimburse the Issuing Bank or the Lenders, as applicable.

(vii)Anything contained in this Agreement to the contrary notwithstanding, (A) if, following the occurrence of any sale, lease, transfer or other disposition of assets or property by any Loan Party or any of its Subsidiaries, Holdings is required pursuant to any other contract, agreement or instrument to commit by a particular date (a "Commitment Date") to apply or cause its Subsidiaries to apply an amount equal to any of the proceeds thereof in a particular manner, or to apply by a particular date (an "Application Date") an amount equal to any such proceeds in a particular manner, in either case in order to excuse Holdings from being required to make an offer to redeem or repay any Debt or purchase any securities in connection with such sale, lease, transfer or other disposition, and Holdings shall have failed to so commit or to so apply an amount equal to such proceeds at least 60 days before the applicable Commitment Date or Application Date, as the case may be, or (B) if Holdings at any other time shall have failed to apply or commit or cause to be applied an amount equal to any such proceeds, and, within 60 days thereafter, assuming no further application or commitment of an amount equal to such proceeds, Holding would otherwise be required to make an offer to redeem or repay any Debt or purchase any securities in respect thereof, then in either such case the Company shall immediately pay or cause to be paid to the Administrative Agent an amount equal to such proceeds to be applied to the payment of Advances in the manner set forth in Section 2.06(b)(ii) in such amounts as shall excuse Holdings from making any such offer to redeem or repay such Debt or purchase such securities.

(viii)Notwithstanding any of the other provisions of clause (ii) of this Section 2.06(b), so long as no Default under Section 6.01(a) or 6.01(f) or Event of Default shall have occurred and be continuing, if, on any date on which a prepayment of Advances would otherwise be required to be made pursuant to clause (i) or (ii) of this Section 2.06(b), the aggregate amount of Net Cash Proceeds required by such clauses to be applied to prepay Advances on such date is less than or equal to $5,000,000, the Borrowers may defer such prepayment until the first date on which the aggregate amount of Net Cash Proceeds or other amounts otherwise required under this Section 2.06(b) to be applied to prepay Advances exceeds $5,000,000.  During such deferral period each Borrower may apply all or any part of such aggregate amount to prepay Revolving Credit Advances and may, subject to the fulfillment of the applicable conditions set forth in Article III, reborrow such amounts (which amounts, to the extent originally constituting Net Cash Proceeds, shall be deemed to retain their original character as Net Cash Proceeds when so reborrowed) for application as required by this Section 2.06(b).  Upon the occurrence of a Default under Section 6.01(a) or 6.01(f) or an Event of Default, each Borrower shall immediately prepay the Advances comprising part of the same Borrowings in the amount of all Net Cash Proceeds received by that Borrower and other amounts, as applicable, that are required to be applied to prepay Advances under this Section 2.06 (without giving effect to the first and second sentences of this clause (vii)) but which have not previously been so applied.

(ix)  The Company shall, within 30 days after the earlier of the date, if any, that (A) the Put and Call Option Agreement has terminated in accordance with Section 10 thereof (and the Asset Transfer shall not have been completed by such date) and (B) any redemption under the Debt Securities resulting from the failure of the Asset Transfer to occur by a specified date has occurred, permanently prepay $400,000,000 of the Term Facilities, which amount shall be applied to the Term Facilities and to the repayment of the principal installments thereof on a pro rata basis. 

(c)Prepayments to Include Accrued Interest, Etc.  All prepayments under this Section 2.06 shall be made together with (i) accrued and unpaid interest to the date of such prepayment on the principal amount so prepaid and (ii) in the case of any such prepayment of a Eurodollar Rate Advance on a date other than the last day of an Interest Period therefor, any amounts owing in respect of such Eurodollar Rate Advance pursuant to Section 8.04(c). If any payment of Eurodollar Rate Advances otherwise required to be made under Section 2.06(b) would be made on a day other than the last day of the applicable Interest Period therefor, the Company may (if it has delivered the notice specified in the next sentence below) direct the Administrative Agent to (and if so directed, the Administrative Agent shall) deposit such payment in the Collateral Account until the last day of the applicable Interest Period at which time the Administrative Agent shall apply the amount of such payment to the prepayment of such Advances; provided, however, that such Advances shall continue to bear interest as set forth in Section 2.07 until the last day of the applicable Interest Period therefor). In the case of any prepayment of a Eurodollar Rate Advance under this Section 2.06 on a date other than the last day of an Interest Period therefor for which the Company will be directing the Administrative Agent to deposit such prepayment in the Collateral Account, the Company shall irrevocably specify such instructions in a notice to the Administrative Agent, given not later than 10:00 A.M. (New York time) on the Business Day prior to such prepayment (and the Administrative Agent will give prompt notice thereof to each Lender). 

	Interest

.  (a)  Scheduled Interest.  Each Borrower that has outstanding Advances shall pay interest on the unpaid principal amount of each Advance owing to each Lender Party from the date of such Advance until such principal amount shall be paid in full, at the following rates per annum:

(i)Base Rate Advances.  During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from time to time and (B) the Applicable Margin for such Advance in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

(ii)Eurodollar Rate Advances.  During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such Advance for such Interest Period and (B) the Applicable Margin for such Advance in effect on the first day of such Interest Period, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

(b)Default Interest.  Upon the occurrence and during the continuance of a Default under Section 6.01(a) or 6.01(f), or upon the occurrence and during the continuance of an Event of Default, the Borrowers shall be required to pay interest ("Default Interest") on (i) the unpaid principal amount of each Advance owing to each Lender Party, payable in arrears on the dates referred to in clause (i) or (ii) of Section 2.07(a), as applicable, and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Advance pursuant to clause (i) or (ii) of Section 2.07(a), as applicable, and (ii) to the fullest extent permitted by applicable law, the amount of any interest, fee or other amount payable under this Agreement or any other Loan Document to any Agent or any Lender Party that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid, in the case of interest, on the Type of Advance on which such interest has accrued pursuant to clause (i) or (ii) of Section 2.07(a), as applicable, and, in all other cases, on Base Rate Advances pursuant to clause (i) of Section 2.07(a).

(c)Notice of Interest Rate.  Promptly after receipt of a Notice of Borrowing pursuant to Section 2.02(a), the Administrative Agent shall give notice to the relevant Borrower and each Lender of the applicable interest rate determined by the Administrative Agent for purposes of clause (i) or (ii) of Section 2.07(a), as applicable.

	Fees

.  (a)  Commitment Fee.  The Company shall pay to the Administrative Agent for the account of the Lenders having a Revolving Credit Commitment a commitment fee (the "Commitment Fee"), from the Closing Date in the case of each Initial Lender and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other such Lender until, in each case, the Termination Date, payable in arrears quarterly on the last Business Day of each March, June, September and December, and on the Termination Date, at the rate per annum equal to the Applicable Percentage Fee in effect from time to time on the average daily unused portion of the average daily Unused Revolving Credit Commitment of each such Lender; provided, however, that any commitment fee accrued with respect to any of the Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Company so long as such Lender shall be a Defaulting Lender except to the extent that such commitment fee shall otherwise have been due and payable by the Company prior to such time, plus (ii) such Lender's Pro Rata Share of the average daily outstanding Swing Line Advances during such quarter; provided, however, that no Commitment Fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

(b)Letter of Credit Fees, Etc.  (i)  The Company shall pay to the (A) Administrative Agent for the account of each Lender having a Revolving Credit Commitment a commission, payable in arrears quarterly on the last Business Day of each March, June, September and December, and on the earliest to occur of the full drawing, expiration, termination or cancellation of any Letter of Credit and on the Termination Date, on such Lender's Pro Rata Share of the average daily aggregate Available Amount of Letters of Credit (other than the Tender Offer L/C) and (B) Initial Issuing Bank, for its account, a commission, payable in arrears quarterly on the last Business Day of each March, June, September and December, and on the earliest to occur of the full drawing, expiration, termination, cancellation, repayment or deemed repayment (subject to the proviso in Section 2.03(c)(iii)) of the Tender Offer L/C, on the Available Amount of such Letter of Credit; in each case outstanding from time to time during such quarter at the rate per annum equal to the Applicable Margin for Eurodollar Rate Advances (as determined in accordance with clause (b) of the definition of "Applicable Margin") in effect from time to time.  Upon the occurrence and during the continuance of a Default under Section 6.01(a) or 6.01(f) or an Event of Default, the amount of commission payable by the Company under this clause (b)(i) shall be increased by 2% per annum.

(ii)The Company shall pay to the Issuing Bank, for its own account, an issuance fee for each Letter of Credit requested by it in an amount equal to 0.25% of the Available Amount of such Letter of Credit on the date of issuance of such Letter of Credit, payable on such date, and such other customary commissions, fronting fees, transfer fees and other fees and charges in connection with the issuance or administration of each Letter of Credit as the Company and the Issuing Bank shall agree.

(c)Agents' Fees.  The Company shall pay to the Administrative Agent for the account of the Agents such fees as may from time to time be agreed between the Company and the Administrative Agent.

	Conversion of Advances

.  (a)  Optional.  Any Borrower may on any Business Day, upon notice given to the Administrative Agent not later than 11:00 A.M. (New York time) time on the third Business Day prior to the date of the proposed Conversion in the case of a Conversion of Base Rate Advances into Eurodollar Rate Advances, or 11:00 A.M. (New York time) on the Business Day immediately preceding the date of the proposed Conversion in the case of a Conversion of Eurodollar Rate Advances into Base Rate Advances, and subject to the provisions of Sections 2.07 and 2.10, Convert all or any portion of the Advances drawn by that Borrower of one Type comprising the same Borrowing into Advances of the other Type; provided, however, that:

(i)any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances;

(ii)any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be made only if no Default shall have occurred and be continuing;

(iii)no Conversion of any Advances shall result in more separate Borrowings than permitted under Section 2.02(c); and

(iv)each Conversion of Advances comprising part of the same Borrowing under any Facility shall be made among the Lenders in accordance with their respective Pro Rata Shares of such Borrowing.

Each notice of a Conversion (a "Notice of Conversion") shall be delivered by telephone, confirmed immediately in writing, or by telecopier, in substantially the form of Exhibit B-2 hereto, shall be duly executed by a Responsible Officer of the relevant Borrower, and shall, within the restrictions set forth in the immediately preceding sentence, specify therein:

(A)the requested date of such Conversion (which shall be a Business Day);

(B)the Advances requested to be Converted; and

(C)if such Conversion is into Eurodollar Rate Advances, the requested duration of the Interest Period for such Eurodollar Rate Advances.

The Administrative Agent shall give each of the Lenders prompt notice of each Notice of Conversion received by it, by telecopier.  Each Notice of Conversion shall be irrevocable and binding on the relevant Borrower.

(b)Mandatory.  (i)  On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $5,000,000, such Advances shall automatically Convert into Base Rate Advances.

(ii)If any Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of "Interest Period" set forth in Section 1.01, the Administrative Agent will forthwith so notify that Borrower and the Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance.

(iii)Upon the occurrence and during the continuance of any Default, (A) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (B) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

	Increased Costs, Etc

.  (a)  If, after the date hereof, the adoption of any applicable Requirement of Law, or any change in any applicable Requirement of Law, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Applicable Lending Office) with any request or directive (whether or not having the force of law, but if not having the force of law, being a request or directive with which such Lender or its Applicable Lending Office is accustomed to comply) of any such Governmental Authority, central bank or comparable agency:

(i)shall subject such Lender (or its Applicable Lending Office) to any tax, duty, or other charge with respect to any Eurodollar Rate Advances, any Note evidencing any Eurodollar Rate Advances, or its obligation to make any Eurodollar Rate Advances, or change the basis of taxation of any amounts payable to such Lender (or its Applicable Lending Office) under this Agreement or its Note in respect of any Eurodollar Rate Advances (other than, for purposes of this Section 2.10, any such increased costs resulting from (A) Taxes or Other Taxes (as to which Section 2.12 shall govern), and (B) changes in the basis of taxation of overall net income or overall gross income by the United States of America or the jurisdiction under the laws of which such Lender Party is organized or has its principal office or such Applicable Lending Office);

(ii)shall impose, modify, or deem applicable any reserve, special deposit, assessment, or similar requirement (including, without limitation, any change by way of the imposition of or increase in reserve requirements included in the Eurodollar Rate Reserve Percentage, commencing at the time of such change) relating to any extensions of credit or other assets of, or any deposits with or other liabilities or commitments of, such Lender (or its Applicable Lending Office), including the Commitments of such Lender hereunder; or

(iii)shall impose on such Lender (or its Applicable Lending Office) or on the United States market for certificates of deposit or the London interbank market any other condition affecting this Agreement or its Note or any of such extensions of credit or liabilities or commitments;

and the result of any of the foregoing is to increase the cost to such Lender (or its Applicable Lending Office) of making, Converting into or maintaining any Eurodollar Rate Advances or to reduce any sum received or receivable by such Lender (or its Applicable Lending Office) under this Agreement or its Note with respect to any Eurodollar Rate Advances, then the Company shall pay to such Lender on demand such amount or amounts as will compensate such Lender for such increased cost or reduction.  Each Lender shall promptly notify the Company and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section 2.10(a) and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the reasonable judgment of such Lender, be otherwise disadvantageous to it.  Any Lender claiming compensation under this Section 2.10(a) shall furnish to the Company and the Administrative Agent a statement setting forth the additional amount or amounts to be paid to it hereunder, with calculations in reasonable detail, which shall be conclusive and binding, absent manifest error.  In determining such amount, such Lender may use any reasonable averaging and attribution methods.

(b)If, after the date hereof, any Lender shall have determined that the adoption of any applicable Requirement of Law regarding capital adequacy or any change therein or in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law, but if not having the force of law, being a request or directive with which such Lender (or its Applicable Lending Office) is accustomed to comply) of any such Governmental Authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy), then from time to time upon demand the Company shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction.  Each Lender shall promptly notify the Company and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section 2.10(b) and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the reasonable judgment of such Lender, be otherwise disadvantageous to it.  Any Lender claiming compensation under this Section 2.10(b) shall furnish to the Company and the Administrative Agent a statement setting forth the additional amount or amounts to be paid to it hereunder, with calculations in reasonable detail, which shall be conclusive and binding, absent manifest error.  In determining such amount, such Lender may use any reasonable averaging and attribution methods.

(c)If, on or prior to the first day of any Interest Period for any Eurodollar Rate Advance, the Required Lenders at any time notify the Administrative Agent that the Eurodollar Rate for any Interest Period for such Advances will not adequately and fairly reflect the cost to such Lenders of funding their Eurodollar Rate Advances for such Interest Period, the Administrative Agent shall promptly so notify the Company and the Lenders, whereupon (i) each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Administrative Agent shall notify the Company (promptly following notice from the Lenders) that such Lenders have determined that the circumstances causing such suspension no longer exist.

(d)Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful after the date hereof for any Lender or its Applicable Lending Office to make, maintain, or fund Eurodollar Rate Advances hereunder, then such Lender shall promptly notify the Company thereof and such Lender's obligation to make Eurodollar Rate Advances and to Convert Base Rate Advances into Eurodollar Rate Advances shall be suspended until such time as such Lender may again make, maintain and fund Eurodollar Rate Advances (in which case the provisions of Section 2.10(e) shall be applicable); provided, however, that, before making any such demand, such Lender agrees to consider (consistent with its internal policy, legal and regulatory restrictions and other considerations) designating a different Eurodollar Lending Office if the making of such a designation would allow such Lender or its Eurodollar Lending Office to continue to perform its obligations to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances and would not, in the sole discretion of such Lender, be otherwise disadvantageous to such Lender in any respect.

(e)If the obligation of any Lender to make a Eurodollar Rate Advance or to Convert Base Rate Advances into Eurodollar Rate Advances shall be suspended pursuant to any other provision of this Section 2.10, such Lender's suspended Eurodollar Rate Advances shall be automatically Converted into Base Rate Advances on the last day(s) of the then current Interest Period(s) therefor (or, in the case of a Conversion required by Section 2.10(d), on such earlier date as such Lender may specify to the Company with a copy to the Administrative Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in such other provision of this Section 2.10 that gave rise to such Conversion no longer exist:

(i)to the extent that such Lender's suspended Eurodollar Rate Advances have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender's suspended Eurodollar Rate Advances shall be applied instead to its Base Rate Advances; and

(ii)all Eurodollar Rate Advances that would otherwise be made or Converted by such Lender shall be made instead as (or shall remain as) Base Rate Advances.

If such Lender gives notice to the Company (with a copy to the Administrative Agent) that the circumstances otherwise specified in this Section 2.10 that gave rise to the suspension of the making of Eurodollar Rate Advances by such Lender no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Eurodollar Rate Advances by other Lenders are outstanding, such Lender's Base Rate Advances shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) therefor, to the extent necessary into Eurodollar Rate Advances.

	Payments and Computations

.  (a)  The Borrowers shall make each payment hereunder and under the Notes, irrespective of any right of counterclaim, deduction or set-off (except as otherwise provided in Section 2.15), not later than 11:00 A.M. (New York time) on the day when due in U.S. dollars to the Administrative Agent at the Administrative Agent's Account in immediately available funds, with payments received by the Administrative Agent after such time being deemed to have been received on the next succeeding Business Day.  The Administrative Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the relevant Borrower is in respect of principal, interest, commitment fees or any other Obligation then payable hereunder and under the Notes to more than one Lender Party, to such Lender Parties for the accounts of their respective Applicable Lending Offices in accordance with their respective Pro Rata Shares of the amounts of such respective Obligations payable to such Lender Parties at such time and (ii) if such payment by the relevant Borrower is in respect of any Obligation then payable hereunder solely to one Lender Party, to such Lender Party for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.  Upon its acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 8.07(d), from and after the effective date of such Assignment and Acceptance, the Administrative Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender Party assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

(b)Each Borrower hereby authorizes each Lender Party, if and to the extent payment owed to such Lender Party is not made when due hereunder or, in the case of a Lender, under the Note held by such Lender, to charge from time to time against any or all of such Borrower's accounts with such Lender Party any amount so due (it being understood that, with respect to payment of costs and expenses as specified in this Agreement, the Company will be afforded a commercially reasonable period of time to pay such amounts).

(c)All computations of interest based on the Base Rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate or Federal Funds Rate and fees and Letter of Credit commissions shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, fees or commissions are payable.  Each determination by the Administrative Agent of an interest rate, fee or commission hereunder shall be conclusive and binding for all purposes, absent manifest error.

(d)Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or Commitment Fees or Letter of Credit commissions or fees, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next succeeding calendar month, such payment shall be made on the immediately preceding Business Day.

(e)Unless the Administrative Agent shall have received notice from any Borrower prior to the date on which any payment is due to any Lender Party hereunder that such Borrower will not make such payment in full, the Administrative Agent may assume that such Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each such Lender Party on such due date an amount equal to the amount due such Lender Party on such date.  If and to the extent any Borrower shall not have so made such payment in full to the Administrative Agent, each such Lender Party shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender Party, together with interest thereon, for each day from the date such amount is distributed to such Lender Party until the date such Lender Party repays such amount to the Administrative Agent, at the Federal Funds Rate.

(f)Whenever any payment received by the Administrative Agent under this Agreement or any of the other Loan Documents is insufficient to pay in full all amounts due and payable to the Agents and the Lender Parties under or in respect of this Agreement and the other Loan Documents on any date, such payment shall be distributed by the Administrative Agent and applied by the Agents and the Lender Parties in the following order of priority:

(i)first, to the payment of all of the fees, indemnification payments, costs and expenses (including, without limitation, reasonable fees and expenses of counsel) that are due and payable to the Agents (solely in their respective capacities as Agents) under or in respect of this Agreement and the other Loan Documents on such date, ratably based upon the respective aggregate amounts of all such fees, indemnification payments, costs and expenses owing to the Agents on such date;

(ii)second, to the payment of all of the fees, indemnification payments, costs and expenses that are due and payable to the Issuing Bank and the Swing Line Bank (solely in their respective capacities as such) under or in respect of this Agreement and the other Loan Documents on such date, ratably based upon the respective aggregate amounts of all such fees, indemnification payments, costs and expenses owing to the Issuing Bank and the Swing Line Bank on such date;

(iii)third, to the payment of all of the indemnification payments, costs and expenses that are due and payable to the Lenders under Section 8.04 hereof and any similar section of any of the other Loan Documents on such date, ratably based upon the respective aggregate amounts of all such indemnification payments, costs and expenses owing to the Lenders on such date;

(iv)fourth, to the payment of all of the amounts that are due and payable to the Administrative Agent and the Lender Parties under Sections 2.10 and 2.12 hereof and Section 5 of the Guaranties on such date, ratably based upon the respective aggregate amounts thereof owing to the Administrative Agent and the Lender Parties on such date;

(v)fifth, to the payment of all of the fees that are due and payable to the Lenders under Section 2.08(a) on such date, ratably based upon the respective aggregate Commitments of the Lenders under the Facilities on such date;

(vi)sixth, to the payment of all of the accrued and unpaid interest on the Obligations of each Borrower under or in respect of the Loan Documents that is due and payable to the Administrative Agent and the Lender Parties under Section 2.07(b) on such date, ratably based upon the respective aggregate amounts of all such interest owing to the Administrative Agent and the Lender Parties on such date;

(vii)seventh, to the payment of all of the accrued and unpaid interest on the Advances that is due and payable to the Administrative Agent and the Lender Parties under Section 2.07(a) on such date, ratably based upon the respective aggregate amounts of all such interest owing to the Administrative Agent and the Lender Parties on such date;

(viii)eighth, to the payment of the principal amount of all of the outstanding Advances that is due and payable to the Administrative Agent and the Lender Parties on such date, ratably based upon the respective aggregate amounts of all such principal owing to the Administrative Agent and the Lender Parties on such date; and

(ix)ninth, to the payment of all other Obligations of the Loan Parties owing under or in respect of the Loan Documents that are due and payable to the Administrative Agent and the other Secured Parties on such date, ratably based upon the respective aggregate amounts of all such Obligations owing to the Administrative Agent and the other Secured Parties on such date.

	Taxes

.  (a)  Except as required by law and subject to sub-section (e) and (f), any and all payments by the Borrowers to or for the account of any Lender Party or any Agent hereunder or under any other Loan Document shall be made, in accordance with Section 2.11 or the applicable provisions of such other Loan Document, if any, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, imposed by the United States or any political subdivision thereof or any other jurisdiction from which a payment under this Agreement is made or in which the Borrower making the payment (or on whose behalf the payment is made) is located or organized, excluding, in the case of each Lender Party and each Agent, taxes that are imposed on its overall net income by the United States and taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction under the laws of which such Lender Party or such Agent, as the case may be, is organized or any political subdivision thereof, and, in the case of each Lender Party, taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of either of its Applicable Lending Offices or any political subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or under the Notes being, collectively, "Taxes").  If any Borrower shall be required under applicable Requirements of Law to deduct any Taxes from or in respect of any sum payable hereunder or under any other Loan Document to any Lender Party or any Agent, (i) the sum payable by that Borrower shall be increased as necessary so that after such Borrower and the Administrative Agent have made all required deductions (including deductions applicable to additional sums payable under this Section 2.12) such Lender Party or such Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions, (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other Governmental Authority in accordance with applicable Requirements of Law and (iv) within 30 days after the date of any payment of Taxes, that Borrower shall furnish to the Administrative Agent, at its address referred to in Section 8.02, the original or a certified copy of a receipt evidencing payment thereof, to the extent such a receipt is issued therefor, or other written proof of payment thereof that is reasonably satisfactory to the Administrative Agent.

(b)In addition, each Borrower agrees to pay any present or future stamp or documentary taxes and any other excise, property or similar taxes, charges or levies that arise from any payment made hereunder or under any other Loan Document or from the execution, delivery of, or otherwise with respect to, this Agreement or any other Loan Document (collectively, "Other Taxes").

(c)Subject to sub-section (e) and (f), each Borrower agrees to indemnify each Lender Party and each Agent for the full amount of Taxes and Other Taxes, and for the full amount of taxes of any kind imposed or asserted by any jurisdiction on amounts payable under this Section 2.12, imposed on or paid by such Lender Party or such Agent, as the case may be, or that the Lender Parties are required to pay as a result of interest in respect of an Advance being assessable income of any Lender Party for Australian taxation law purposes on the grounds that the interest has been deemed for the purposes of the Australia Income Tax Assessment Act 1936 (or any provision of such Act as rewritten or re-enacted) as having been derived from a source in Australia, and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto.  Amounts payable by any Borrower under the indemnity set forth in this subsection (c) shall be paid within 30 days from the date on which the applicable Lender or Agent, as the case may be, makes written demand therefor.

(d)In the case of any payment hereunder or under any other Loan Document by or on behalf of any Borrower through an account or branch outside the United States, or on behalf of any  Borrower by a payor that is not a United States person, if that Borrower determines that no Taxes are payable in respect thereof, such Borrower shall furnish, or shall cause such payor to furnish, to the Administrative Agent, at its address referred to in Section 8.02, an opinion of counsel or a certificate from a Responsible Officer of Holdings reasonably acceptable to the Administrative Agent stating that such payment is exempt from Taxes.  For purposes of this subsection (d) and subsection (e) of this Section 2.12, the terms "United States" and "United States person" shall have the meanings specified in Section 7701 of the Internal Revenue Code.

(e)Each Lender Party organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender, the Swing Line Bank or the Initial Issuing Bank, as the case may be, and on or prior to the date of the Assignment and Acceptance pursuant to which it becomes a Lender Party in the case of each other Lender Party, and from time to time thereafter as reasonably requested in writing by Holdings (but only so long thereafter as such Lender Party remains lawfully able to do so), provide each of the Administrative Agent and Holdings with a copy (and at the request of the Administrative Agent and Holdings, two originals) of Internal Revenue Service forms W-8BEN or W-8ECI (and, in the case of a Lender Party that has certified in writing to the Administrative Agent that it is not a "bank" (as defined in Section 881(c)(3)(A) of the Internal Revenue Code), a certificate representing that such Lender Party is not (i) a "bank" for purposes of Section 881(c)(3)(A) of the Internal Revenue Code, (ii) a ten-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of any of the Borrowers or (iii) a controlled foreign corporation related to any of the Borrowers (within the meaning of Section 864(d)(4) of the Internal Revenue Code)), as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Lender Party is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or any other Loan Document or, in the case of a Lender Party that has certified to the Administrative Agent that it is not a bank, certifying that such Lender Party is not a United States person.  If the forms provided by a Lender Party at the time such Lender Party first becomes a party to this Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender Party provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such forms; provided, however, that, if at the date of the Assignment and Acceptance pursuant to which a Lender Party becomes a party to this Agreement, the Lender Party assignor was entitled to payments under subsection (a) of this Section 2.12 in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender Party assignee on such date.  

(f)For any period with respect to which a Lender Party has failed to provide Holdings with the appropriate form, certificate or other document described in subsection (e) of this Section 2.12 (other than if such failure is due to a change in the applicable Requirements of Law, or in the interpretation or application thereof, occurring after the date on which a form, certificate or other document originally was required to be provided) such Lender Party shall not be entitled to indemnification under subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender Party become subject to Taxes because of its failure to deliver a form, certificate or other document required hereunder, each Borrower shall take such steps as such Lender Party shall reasonably request to assist such Lender Party in recovering such Taxes.

(g)Each of the Lender Parties hereby agrees that, upon the occurrence of any circumstances entitling such Lender Party to additional amounts pursuant to this Section 2.12, such Lender Party shall use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender Party, be otherwise disadvantageous to such Lender Party.  In addition, each Lender Party agrees to furnish to Holdings, at Holdings' expense and request, such additional forms duly executed as it may be legally entitled to furnish as may be necessary in order to claim any reduction of or exemption from any Taxes or Other Taxes, which reduction or exemption may be available to such Lender Party, unless in the reasonable judgment of such Lender Party, the furnishing of such form would be disadvantageous to such Lender Party in any respect.

	Sharing of Payments, Etc

.  If any Lender Party shall obtain at any time any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) (a) on account of Obligations due and payable to such Lender Party under or in respect of this Agreement or any of the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender Party at such time (other than pursuant to Section 2.10, 2.12, 8.04 or 8.07) to (ii) the aggregate amount of the Obligations due and payable to all Lender Parties at such time) of payments on account of the Obligations due and payable to all Lender Parties under or in respect of this Agreement and the other Loan Documents at such time obtained by all the Lender Parties at such time or (b) on account of Obligations owing (but not due and payable) to such Lender Party under or in respect of this Agreement or any of the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing to such Lender Party at such time (other than pursuant to Section 2.10, 2.12, 8.04 or 8.07) to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lender Parties under or in respect of this Agreement and the other Loan Documents at such time) of payments on account of the Obligations owing (but not due and payable) to all Lender Parties under or in respect of this Agreement and the other Loan Documents at such time obtained by all of the Lender Parties at such time, such Lender Party shall forthwith purchase from the other Lender Parties such interests or participating interests in the Obligations due and payable or owing to them, as the case may be, as shall be necessary to cause such purchasing Lender Party to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender Party, such purchase from each other Lender Party shall be rescinded and such other Lender Party shall repay to the purchasing Lender Party the purchase price to the extent of such Lender Party's ratable share (according to the proportion of (A) the purchase price paid to such Lender Party to (B) the aggregate purchase price paid to all Lender Parties) of such recovery, together with an amount equal to such Lender Party's ratable share (according to the proportion of (1) the amount of such other Lender Party's required repayment to (2) the total amount so recovered from the purchasing Lender Party) of any interest or other amount paid or payable by the purchasing Lender Party in respect of the total amount so recovered.  Each Borrower hereby agrees that any Lender Party so purchasing an interest or participating interest from another Lender Party pursuant to this Section 2.13 may, to the fullest extent permitted under applicable law, exercise all its rights of payment (including the right of setoff) with respect to such an interest or participating interest, as the case may be, as fully as if such Lender Party were the direct creditor of that Borrower in the amount of such an interest or participating interest.

	Use of Proceeds

.  The proceeds of the Advances and issuance of the Tender Offer L/C shall be available solely to fund the Asset Transfer (through the issuing of the Tender Offer L/C and the funding the Parent Loan), to refinance certain Debt of Holdings and its Subsidiaries outstanding on the date of the Initial Extension of Credit, to pay fees and expenses incurred in connection with the consummation of the Transaction and, in the case of the Revolving Facility, for working capital and general corporate purposes of Holdings and its Subsidiaries. All proceeds of the Term Advances not used to fund the Parent Loan, refinance certain Debt of Holdings and its Subsidiaries or to pay fees and expenses on the Closing Date incurred in connection with the consummation of the Transaction will be deposited directly in the L/C Cash Collateral Account for release (i) to the Initial Issuing Bank upon, and in reimbursement of, the drawing under the Tender Offer L/C or (ii) in the case where the Tender Offer L/C is otherwise fully cash collateralized or back-stopped by a letter of credit or other credit support acceptable to the Initial Issuing Bank, as otherwise agreed by the Administrative Agent and Initial Issuing Bank for working capital and general corporate purposes of Holdings and its Subsidiaries.

	Defaulting Lenders

.  (a)  In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance to any Borrower and (iii) such Borrower shall be required to make any payment hereunder or under any other Loan Document to or for the account of such Defaulting Lender, then that Borrower may, so long as no Default shall occur or be continuing at such time and to the fullest extent permitted by applicable law, set off and otherwise apply the Obligation of that Borrower to make such payment to or for the account of such Defaulting Lender against the obligation of such Defaulting Lender to make such Defaulted Advance.  In the event that, on any date, such Borrower shall so set off and otherwise apply its obligation to make any such payment against the obligation of such Defaulting Lender to make any such Defaulted Advance on or prior to such date, the amount so set off and otherwise applied by that Borrower shall constitute for all purposes of this Agreement and the other Loan Documents (to the extent of any such setoff) the payment required by such Borrower and an Advance by such Defaulting Lender made on the date of such setoff under the Facility pursuant to which such Defaulted Advance was originally required to have been made pursuant to Section 2.01.  Such Advance shall be a Base Rate Advance and shall be considered, for all purposes of this Agreement, to comprise part of the Borrowing in connection with which such Defaulted Advance was originally required to have been made pursuant to Section 2.01, even if the other Advances comprising such Borrowing shall be Eurodollar Rate Advances on the date such Advance is deemed to be made pursuant to this subsection (a).  Each Borrower shall notify the Administrative Agent at any time it exercises its right of set-off pursuant to this subsection (a) and shall set forth in such notice (A) the name of the Defaulting Lender and the Defaulted Advance required to be made by such Defaulting Lender and (B) the amount set off and otherwise applied in respect of such Defaulted Advance pursuant to this subsection (a).  Any portion of such payment otherwise required to be made by such Borrower to or for the account of such Defaulting Lender which is paid by that Borrower, after giving effect to the amount set off and otherwise applied by each Borrower pursuant to this subsection (a), shall be applied by the Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.

(b)In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to the Administrative Agent or any of the other Lender Parties and (iii) any Borrower shall make any payment hereunder or under any other Loan Document to the Administrative Agent for the account of such Defaulting Lender, then the Administrative Agent may, on its behalf or on behalf of such other Lender Parties and to the fullest extent permitted by applicable law, apply at such time the amount so paid by that Borrower to or for the account of such Defaulting Lender to the payment of each such Defaulted Amount to the extent required to pay such Defaulted Amount.  In the event that the Administrative Agent shall so apply any such amount to the payment of any such Defaulted Amount on any date, the amount so applied by the Administrative Agent shall constitute for all purposes of this Agreement and the other Loan Documents payment, to such extent, of such Defaulted Amount on such date.  Any such amount so applied by the Administrative Agent shall be retained by the Administrative Agent or distributed by the Administrative Agent to such other Lender Parties, ratably in accordance with the respective portions of such Defaulted Amounts payable at such time to the Administrative Agent and such other Lender Parties and, if the amount of such payment made by any Borrower shall at such time be insufficient to pay all Defaulted Amounts owing at such time to the Administrative Agent and the other Lender Parties, in the following order of priority:

(i)first, to the Administrative Agent for any Defaulted Amount then owing to the Administrative Agent;

(ii)second, to the Issuing Bank and the Swing Line Bank for any Defaulted Amount then owing to them, in their capacities as such, ratably in accordance with such respective Defaulted Amounts then owing to such Issuing Bank and such Swing Line Bank; and

(iii)third, to any other Lender Parties for any Defaulted Amounts then owing to such other Lender Parties, ratably in accordance with such respective Defaulted Amounts then owing to such other Lender Parties.

Any portion of such amount paid by any Borrower for the account of such Defaulting Lender remaining, after giving effect to the amount applied by the Administrative Agent pursuant to this subsection (b), shall be applied by the Administrative Agent as specified in subsection (c) of this Section 2.15.

(c)In the event that, at any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance or a Defaulted Amount and (iii) each Borrower, the Administrative Agent or any other Lender Party shall be required to pay or distribute any amount hereunder or under any other Loan Document to or for the account of such Defaulting Lender, then the Borrowers or such other Lender Party shall pay such amount to the Administrative Agent to be held by the Administrative Agent, to the fullest extent permitted by applicable law, in escrow or the Administrative Agent shall, to the fullest extent permitted by applicable law, hold in escrow such amount otherwise held by it.  Any funds held by the Administrative Agent in escrow under this subsection (c) shall be deposited by the Administrative Agent in an account with Bank of America, in the name and under the control of the Administrative Agent, but subject to the provisions of this subsection (c).  The terms applicable to such account, including the rate of interest payable with respect to the credit balance of such account from time to time, shall be Bank of America's standard terms applicable to escrow accounts maintained with it.  Any interest credited to such account from time to time shall be held by the Administrative Agent in escrow under, and applied by the Administrative Agent from time to time in accordance with the provisions of, this subsection (c).  The Administrative Agent shall, to the fullest extent permitted by applicable law, apply all funds so held in escrow from time to time to the extent necessary to make any Advances required to be made by such Defaulting Lender and to pay any amount payable by such Defaulting Lender hereunder and under the other Loan Documents to the Administrative Agent or any other Lender Party, as and when such Advances or amounts are required to be made or paid and, if the amount so held in escrow shall at any time be insufficient to make and pay all such Advances and amounts required to be made or paid at such time, in the following order of priority:

(i)first, to the Administrative Agent for any amount then due and payable by such Defaulting Lender to the Administrative Agent hereunder;

(ii)second, to the Issuing Bank and the Swing Line Bank for any amounts then due and payable to them hereunder, in their capacities as such, by such Defaulting Lender, ratably in accordance with such amounts then due and payable to such Issuing Bank and such Swing Line Bank;

(iii)third, to any other Lender Parties for any amount then due and payable by such Defaulting Lender to such other Lender Parties hereunder, ratably in accordance with such respective amounts then due and payable to such other Lender Parties; and

(iv)fourth, to the Borrowers for any Advance then required to be made by such Defaulting Lender pursuant to a Commitment of such Defaulting Lender.

In the event that any Lender Party that is a Defaulting Lender shall, at any time, cease to be a Defaulting Lender, any funds held by the Administrative Agent in escrow at such time with respect to such Lender Party shall be distributed by the Administrative Agent to such Lender Party and applied by such Lender Party to the Obligations owing to such Lender Party at such time under this Agreement and the other Loan Documents ratably in accordance with the respective amounts of such Obligations outstanding at such time.

(d)The rights and remedies against a Defaulting Lender under this Section 2.15 are in addition to other rights and remedies that the Borrowers may have against such Defaulting Lender with respect to any Defaulted Advance and that the Administrative Agent or any Lender Party may have against such Defaulting Lender with respect to any Defaulted Amount.

	Evidence of Debt

.  (a)  Each Lender Party shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Advance owing to such Lender Party from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.  Each Borrower agrees that upon notice by any Lender Party to it (with a copy of such notice to the Administrative Agent) to the effect that a promissory note or other evidence of indebtedness is required or appropriate in order for such Lender Party to evidence (whether for purposes of pledge enforcement or otherwise) the Advances owing to, or to be made by, such Lender Party, it shall promptly execute and deliver to such Lender Party, with a copy to the Administrative Agent, a Term Note and a Revolving Credit Note, as applicable, in substantially the form of Exhibits A-1 and A-2 hereto, respectively, payable to the order of such Lender Party in a principal amount equal to the Revolving Credit Commitment and the Term Commitment, respectively, of such Lender Party.  All references to Notes in the Loan Documents shall mean Notes, if any, to the extent issued hereunder.  On the Closing Date, Notes will be executed and delivered by the Company and each Subsidiary Borrower party hereto to each applicable Lender Party.  All Notes will be issued by the respective Borrowers outside of Australia.

(b)The Register maintained by the Administrative Agent pursuant to Section 8.07(d) shall include a control account, and a subsidiary account for each Lender Party, in which accounts (taken together) shall be recorded (i) the date and amount of each Borrowing made hereunder, the Type of Advances comprising such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each Assignment and Acceptance delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become due and payable from such Borrower to each Lender Party hereunder, and (iv) the amount of any sum received by the Administrative Agent from such Borrower hereunder and each Lender Party's share thereof.

(c)Entries made in good faith by the Administrative Agent in the Register pursuant to subsection (b) above, and by each Lender Party in its account or accounts pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from any Borrower to, in the case of the Register, each Lender Party and, in the case of such account or accounts, such Lender Party, under this Agreement absent manifest error; provided, however, that the failure of the  Administrative Agent or such Lender Party to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of any Borrower under this Agreement. 

	Incremental Facilities and Commitments

.   (a)  At any time during the term of this Agreement, and so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, the Company may request, from time to time, by notice to the Administrative Agent that one or more Lenders (and/or one or more other Persons which shall become Lenders as provided in Section 2.17(c) below) provide one or more additional facilities to the Company or any of its Subsidiaries (including non-U.S. Subsidiaries) to supplement the Revolving Credit Facility, the Term A Facility or the Term B Facility (each, an "Incremental Facility"), which Incremental Facilities together shall provide for commitments ("Incremental Commitments") for loans in an aggregate principal amount of not greater than $200,000,000 (or its equivalent in other currencies to be agreed) in excess of the aggregate outstanding amount of the Term A Advances, the Term B Advances and the Revolving Credit Commitment, at the time of the respective request (collectively, "Incremental Loans"); provided that (A) no Lender shall have any obligation to provide any Incremental Commitment, (B) any Lender (or any other Person which becomes a Lender pursuant to Section 2.17(c) below) may provide Incremental Commitments without the consent of any other Lender and (C) each of the Term A Facility, the Term B Facility and the Revolving Credit Facility, as the case may be, may only be supplemented once as provided herein.

(b)The maturity date, scheduled amortization and commitment reductions, mandatory prepayments and commitment reductions, interest rate, minimum borrowings and prepayments, commitment fees and other amounts payable in respect of any Incremental Facility, and certain agent determinations and other relevant provisions, shall be as set forth in an agreement (an "Incremental Facility Agreement") among the Loan Parties, the Administrative Agent, the Lenders and other Persons agreeing to provide Incremental Commitments thereunder; provided that any Incremental Loans to supplement the Term A Facility shall have a Weighted Average Life to Maturity of no less than the Weighted Average Life to Maturity of the Term A Advances then outstanding, any Incremental Loans to supplement the Term B Facility shall have a Weighted Average Life to Maturity of no less than the Weighted Average Life to Maturity of the Term B Advances then outstanding and any revolving Incremental Commitment to supplement the Revolving Credit Commitment shall have a termination date not earlier than the then scheduled Termination Date.

(c)The effectiveness of any Incremental Facility to be created under this Section 2.17, and the obligation of any Lender or other Person providing any Incremental Commitment thereunder to make any Incremental Loans pursuant thereto, is subject to, in addition to the conditions set forth in Article III, the satisfaction of each of the following conditions:  (i) each Loan Party, the Administrative Agent, and each Lender or other Person providing Incremental Commitments thereunder (each, an "Incremental Lender") shall have executed and delivered to the Administrative Agent an Incremental Facility Agreement with respect to such Incremental Facility, (ii) the Administrative Agent shall have received for its account and for the respective accounts of any other agents and the Incremental Lenders, all fees and other amounts payable by the Borrowers in respect of such Incremental Facility on or prior to such date of effectiveness and (iii) the Administrative Agent (or its counsel) shall have received such documents and certificates, and such legal opinions, as the Administration Agent or its counsel shall reasonably request, including documents, certificates and legal opinions relating to the organization, existence and good standing of each Loan Party, the authorization of such Incremental Facility and other legal matters relating to the Loan Parties or the Loan Documents (including the applicable Incremental Facility Agreement).  The Administrative Agent shall notify each Lender as to the effectiveness of each Incremental Facility hereunder.

	

CONDITIONS OF LENDING AND

ISSUANCES OF LETTERS OF CREDIT

	Conditions Precedent to Initial Extension of Credit

.  The obligation of each Lender to make an Advance or of the Issuing Bank to issue a Letter of Credit on the occasion of the Initial Extension of Credit hereunder is subject to the satisfaction of the following conditions precedent before or concurrently with the Initial Extension of Credit:
(a)The Administrative Agent shall have received on or before the day of the Initial Extension of Credit executed counterparts of this Agreement and each of the following, each dated such day (unless otherwise specified), in form and substance satisfactory to the Administrative Agent (unless otherwise specified) and (except for the Notes) in sufficient copies for each Lender Party:
(i)The Notes payable to the order of the Lenders.

(ii)A security agreement, in substantially the form of Exhibit D hereto (together with each other security agreement and security agreement supplement delivered pursuant to Section 5.01(j), in each case as amended, the "Security Agreement"), duly executed by each Loan Party, together with:
(A)certificates (where applicable) representing the Pledged Shares referred to therein accompanied (where applicable) by undated stock powers executed in blank and instruments evidencing the Pledged Debt indorsed in blank,

(B)financing statements prepared for filing under the Uniform Commercial Code of all jurisdictions that the Administrative Agent determines are necessary in order to perfect and protect the first priority liens and security interests created under the Security Agreement, covering the Collateral described in the Security Agreement,

(C)completed requests for information, dated on or before the date of the Initial Extension of Credit, listing all effective financing statements filed in the jurisdictions referred to in clause (B) above that name any Loan Party as debtor, together with copies of such financing statements,

(D)evidence of the completion of all other recordings and filings of or with respect to the Security Agreement that the Administrative Agent  determines are necessary in order to perfect and protect the Liens created thereby,

(E)evidence of the insurance required by the terms of the Security Agreement, and

(F)evidence that all other actions that the Administrative Agent  determines are necessary in order to perfect and protect the first priority liens and security interests created under the Security Agreement has been taken (including, without limitation, receipt of duly executed payoff letters, UCC-3 termination statements and such landlords' and bailees' waiver and consent agreements obtained using reasonable efforts).

(iii)(A) A guaranty, in substantially the form of Exhibit E-1 hereto (together with each other guaranty and guaranty supplement delivered pursuant to Section 5.01(j), in each case as amended, the "Subsidiary Guaranty"), duly executed by each U.S. Subsidiary that is not an Immaterial Subsidiary and (B) a guaranty, in substantially the form of Exhibit E-2 hereto (the "Parent Guaranty"), duly executed by Holdings.

(iv)Deeds of trust, trust deeds, mortgages, leasehold mortgages and leasehold deeds of trust, in substantially the form of Exhibit F hereto and covering the specified properties on Schedules 4.01(w) and 4.01(x) hereto (together with each other mortgage delivered pursuant to Section 5.01(j), in each case as amended, the "Mortgages"), duly executed (subject to Section 5.01(r)) by the appropriate Loan Party, together with:
(A)evidence that counterparts of the Mortgages have been duly recorded on or before the day of the Initial Extension of Credit in all filing or recording offices that the Administrative Agent determines are necessary in order to create a valid first and subsisting Lien on the property described therein in favor of the Administrative Agent for the benefit of the Secured Parties and that all filing and recording taxes and fees have been paid,

(B)fully paid American Land Title Association Lender's Extended Coverage title insurance policies (the "Mortgage Policies") in form and substance, with endorsements and in amount acceptable to the Administrative Agent, issued, coinsured and reinsured by title insurers acceptable to the Administrative Agent, insuring the Mortgages to be valid first and subsisting Liens on the property described therein, free and clear of all defects (including, but not limited to, mechanics' and materialmen's Liens) and encumbrances, excepting only Permitted Liens and other Liens permitted under Section 5.02(a), and providing for such other affirmative insurance (including endorsements for future advances under the Loan Documents and for mechanics' and materialmen's Liens) and such coinsurance and direct access reinsurance as the Administrative Agent may determine necessary,

(C)American Land Title Association form surveys, for which all necessary fees (where applicable) have been paid, and dated as of a date acceptable to the Administrative Agent and the issuer of the Mortgage Policies, certified to the Administrative Agent and the issuer of the Mortgage Policies in a manner satisfactory to the Administrative Agent by a land surveyor duly registered and licensed in the States in which the property described in such surveys is located and acceptable to the Administrative Agent, showing all buildings and other improvements, any off-site improvements, the location of any easements, parking spaces, rights of way, building setback lines and other dimensional regulations and the absence of encroachments, either by such improvements or onto such property, and other defects, other than encroachments and other defects acceptable to the Administrative Agent,

(D)such consents and agreements of lessors and other third parties, and such estoppel letters and other confirmations, as the Administrative Agent  determines are necessary and which are obtained using reasonable efforts,

(E)evidence of the insurance required by the terms of the Mortgages; and

(F)evidence that all other actions that the Administrative Agent determines are necessary in order to create valid first and subsisting Liens on the property described in the Mortgages has been taken.

(v)An intellectual property security agreement, in substantially the form of Exhibit G hereto (together with each other intellectual property security agreement and intellectual property security agreement supplement delivered pursuant to Section 5.01(j), in each case as amended, the "Intellectual Property Security Agreement"), duly executed by each Loan Party, together with evidence that all actions that the Administrative Agent  determines are necessary in order to perfect and protect the first priority liens and security interests created under the Intellectual Property Security Agreement has been taken.

(vi)Certified copies of the resolutions of the Board of Directors of each Loan Party approving the Asset Transfer and each Loan Document and each Related Document to which it is or is to be a party, and of all documents evidencing other necessary Governmental Authorizations (as referred to in the Put and Call Option Agreement) and other necessary corporate actions or third-party approvals and consents, if any, with respect to the Transaction and each Loan Document and each Related Document to which it is or is to be a party.

(vii)A copy of a certificate of the Secretary of State of the jurisdiction of incorporation of each Loan Party, dated reasonably near the date of the Initial Extension of Credit, certifying (A) as to a true and correct copy of the charter (or comparable Constitutive Document) of such Loan Party and each amendment thereto on file in such Secretary's office and (B) that (1) such amendments are the only amendments to such Loan Party's charter (or comparable Constitutive Document) on file in such Secretary's office, (2) such Loan Party has paid all franchise taxes to the date of such certificate and (C) such Loan Party is duly incorporated and in good standing or presently subsisting under the laws of the State of the jurisdiction of its incorporation.

(viii)A certificate of each Loan Party, signed on behalf of such Loan Party by its President or a Vice President and its Secretary or any Assistant Secretary, dated the date of the Initial Extension of Credit (the statements made in which certificate shall be true on and as of the date of the Initial Extension of Credit), certifying as to (A) the absence of any amendments to the charter (or comparable Constitutive Document) of such Loan Party since the date of the Secretary of State's certificate referred to in Section 3.01(a)(vii), (B) a true and correct copy of the bylaws (or comparable Constitutive Document) of such Loan Party as in effect on the date on which the resolutions referred to in Section 3.01(a)(ix) were adopted and on the date of the Initial Extension of Credit, (C) the due incorporation and good standing or valid existence of such Loan Party as a corporation organized under the laws of the jurisdiction of its incorporation, (D) the truth of the representations and warranties contained in the Loan Documents as though made on and as of the date of the Initial Extension of Credit and (E) the absence of any event occurring and continuing, or resulting from the Initial Extension of Credit, that constitutes a Default.

(ix)A certificate of the Secretary or an Assistant Secretary of each Loan Party certifying the names and true signatures of the officers of such Loan Party authorized to sign each Loan Document and each Related Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder.

(x)Certified copies of each of the Related Documents, duly executed by the parties thereto and in form and substance reasonably satisfactory to the Administrative Agent, together with all agreements, instruments and other documents delivered in connection therewith as the Administrative Agent shall request.

(xi)Letters in substantially the form of Exhibit H attesting to the Solvency of Holdings and the Company and each material Guarantor (before and after giving effect to the Transaction and the incurrence of debt related thereto), executed on behalf of each such Loan Party by one of its Responsible Officers.

(xii)Such financial, business and other information regarding each Loan Party and its Subsidiaries as the Lender Parties shall have reasonably requested, including, without limitation, information as to possible contingent liabilities, tax matters, environmental matters, obligations under Plans, Multiemployer Plans and Welfare Plans, collective bargaining agreements and other arrangements with employees.

(xiii)All loans made by the Lender Parties to any Borrower shall be in full compliance with Regulation U of the Federal Reserve Board.

(xiv)The Lead Arranger shall have received (A) audited consolidated financial statements of Holdings and its Subsidiaries for the Fiscal Years ended 1998, 1999 and 2000 and (B) a written certification on behalf of Holdings by its Chief Financial Officer or Treasurer of Holdings (1) that the Total Leverage Ratio as of the end of the fiscal quarter ended June 30, 2001, as calculated on a rolling four-quarter basis, of Holdings and its Subsidiaries giving effect to the Asset Transfer and all borrowings made in connection therewith under the Facilities, on a pro forma basis, is less than or equal to 4.75:1.00 and (2) specifying the applicable Performance Level on the Closing Date.

(xv)An environmental assessment report, in form and substance satisfactory to the Lender Parties in their reasonable discretion, from Environmental Resources Management (ERM).  

(xvi)Evidence of insurance naming the Administrative Agent as additional insured and loss payee with such responsible and reputable insurance companies or associations, and in such amounts and covering such risks, as are reasonably satisfactory to the Lender Parties, including, without limitation, business interruption insurance.

(xvii)A Notice of Borrowing and Notice of Issuance relating to the Initial Extension of Credit.

(xviii)A favorable opinion of (A) Kirkland & Ellis, counsel for the Loan Parties, in substantially the form of Exhibit I-1 hereto, (B) the Chief Legal Officer of the Loan Parties, in substantially the form of Exhibit I-2 hereto and (C) local counsel for the Loan Parties in each jurisdiction where a Mortgage or other security instrument will be recorded, in form and substance satisfactory to the Administrative Agent.

(xix)A favorable opinion of Deacons, local counsel to the Loan Parties in Australia, in form and substance satisfactory to the Loan Parties.

(xx)A favorable opinion of each counsel delivering an opinion to Holdings or any of its Subsidiaries in connection with the Transaction which opinion is either (A) addressed to the Agents and the Lender Parties and expressly states that the Agents and the Lender Parties may rely on such opinion or (B) accompanied by a reliance letter from such counsel addressed to the Agents and the Lender Parties that expressly states that the Agents and the Lender Parties may rely on such opinion.

(xxi)A Mortgage of Australian Property, in substantially the form of Exhibit M hereto (the "Australian Security Agreement"), duly executed by Holdings, PartnerCo and the Administrative Agent, together with evidence that all actions that the Administrative Agent  determines are necessary in order to perfect and protect the first priority liens and security interests created under the Australian Security Agreement has been taken.

(xxii)A Collateral Assignment of Partnership Interests, in substantially the form of Exhibit N hereto (the "Bermuda Security Agreement"), duly executed by Alpharma Euro Holdings Inc. and Alpharma (Bermuda) Inc., together with evidence that all actions that the Administrative Agent  determines are necessary in order to perfect and protect the first priority liens and security interests created under the Bermuda Security Agreement has been taken.

(xxiii)A Share Pledge Agreement, in substantially the form of Exhibit O hereto (the "Barbados Stock Pledge"), duly executed by the Company, Alpharma NW Inc. and Alpharma FSC Ltd., together with evidence that all actions that the Administrative Agent  determines are necessary in order to perfect and protect the first priority liens and security interests created under the Barbados Stock Pledge has been taken.

(b)The Lender Parties shall be satisfied that all Existing Debt, other than Surviving Debt, has been prepaid, redeemed or defeased in full or otherwise satisfied and extinguished.

(c)There shall not have occurred a material adverse change in the business, assets, properties, liabilities (actual and contingent), operations, condition (financial or otherwise) or prospects of the Acquired Business, taken as a whole, since June 30, 2001, or of Holdings and its Subsidiaries, taken as a whole, since December 31, 2000 (it being understood that, with respect to the Acquired Business, "prospects" shall be considered as taking into account all revisions made to Target's projections by Holdings, as disclosed to the Lead Arranger prior to the execution and delivery of the financing commitment letter).

(d)There shall exist no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries pending or threatened before any Governmental Authority or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect other than the matters described on Schedule 4.01(f) hereto (the "Disclosed Litigation") or (ii) purports to affect the legality, validity or enforceability of any Loan Document or Related Document or the consummation of the Transaction, and there shall have been no adverse change in the status, or financial effect on any Loan Party or any of its Subsidiaries, of the Disclosed Litigation from that described on Schedule 4.01(f) hereto.

(e)All Governmental Authorizations, shareholder and third-party consents, if any, referred to in the Put and Call Option Agreement (and all Schedules and Exhibits thereto) in connection with the Transaction shall have been obtained and all applicable waiting periods shall have expired without any action being taken by any authority referred to in the Put and Call Option Agreement (and all Schedules and Exhibits thereto) that could restrain, prevent or impose any material adverse conditions on the Asset Transfer or such other transactions or that could seek or threaten any of the foregoing, and no law or regulation referred to in the Put and Call Option Agreement (and all Schedules and Exhibits attached thereto) shall be applicable which could have such effect.

(f)The Company shall have paid all accrued fees of the Agents and the Lender Parties and all accrued expenses of the Agents (including the accrued fees and expenses of counsel to the Administrative Agent and local counsel to the Lender Parties).

(g)The Reorganization shall have been consummated.

(h)BidCo is entitled to proceed with the compulsory acquisition of 100% of the Equity Interests of the Target in accordance with the Requirements of Law.

(i)The terms of the Management Agreement have commenced or will commence concurrently with the Initial Extension of Credit.

	The ALI Subordinated Note Exchange shall have occurred.

(k)The Bridge Facility (in the form of a backstop letter of credit, cash collateral, assignment or other cash proceeds of the Bridge Facility; in each case in an amount of not less than $200,000,000 deposited in favor of, and available to be drawn immediately by, the Initial Issuing Bank upon a drawing under the Tender Offer L/C) shall have been executed and delivered.

	Conditions Precedent to Each Borrowing and Issuance and Renewal

.  The obligation of each Lender to make an Advance (other than a Letter of Credit Advance made by the Issuing Bank or a Lender pursuant to Section 2.03(c) and a Swing Line Advance made by a Lender pursuant to Section 2.02(b)) on the occasion of each Borrowing (including the initial Borrowing), and the obligation of the Issuing Bank to issue a Letter of Credit (including the initial issuance) or renew a Letter of Credit or amend a Letter of Credit to increase the Available Amount thereof and the right of a Borrower to request a Swing Line Borrowing, shall be subject to the further conditions precedent that on the date of such Borrowing or issuance or renewal (a) the following statements shall be true and the Administrative Agent shall have received for the account of such Lender or the Issuing Bank a certificate of such Borrower signed by a duly authorized officer of that Borrower, dated the date of such Borrowing or issuance or renewal, stating that (and each of the giving of the applicable Notice of Borrowing, Notice of Swing Line Borrowing, Notice of Issuance or Notice of Renewal and the acceptance by a Borrower of the proceeds of such Borrowing or of such Letter of Credit or the renewal of such Letter of Credit shall constitute a representation and warranty by that Borrower that both on the date of such notice and on the date of such Borrowing or issuance or renewal such statements are true):

(i)the representations and warranties contained in each Loan Document are correct in all material respects on and as of such date, before and after giving effect to such Borrowing or issuance or renewal and to the application of the proceeds therefrom, as though made on and as of such date (except (A) for any such representations or warranties that, by their terms, refer to a specific date other than the date of such Borrowing or issuance or renewal, in which case as of such specific date, and (B) if any Required Financial Information has been delivered to the Administrative Agent and the Lender Parties on or prior to the date of such Borrowing or issuance or renewal, that the Consolidated financial statements of Holdings and its Subsidiaries referred to in Section 4.01(g) shall be deemed at any time and from time to time after the Closing Date to refer to the Consolidated financial statements of Holdings and its Subsidiaries comprising part of the Required Financial Information most recently delivered to the Administrative Agent and the Lender Parties pursuant to Sections 5.03(b) and 5.03(c), respectively, on or prior to the date of such Borrowing, issuance or renewal); and

(ii)no Default has occurred and is continuing, or would result from such Borrowing or issuance or renewal or from the application of the proceeds therefrom.

(iii)with respect to an Advance to any Subsidiary Borrower which is a direct or indirect Subsidiary of PartnerCo, (i) BidCo shall have made a U.S. tax "check the box election" to be treated as a disregarded entity under the Internal Revenue Code, if applicable and (ii) such Subsidiary Borrower has executed and delivered all of the Collateral Documents referred to in Section 3.01 and a Subsidiary Guaranty by it and all of its U.S. Subsidiaries.

and (b) the Administrative Agent shall have received such other approvals, opinions or documents as any Lender Party through the Administrative Agent may reasonably request.

	Determinations Under Section 3.01

.  For purposes of determining compliance with the conditions specified in Section 3.01, each Lender Party shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender Parties, unless an officer of the Administrative Agent responsible for the transactions contemplated by the Loan Documents shall have received notice from such Lender Party prior to the Initial Extension of Credit specifying its objection thereto and, if the Initial Extension of Credit consists of a Borrowing, such Lender Party shall not have made available to the Administrative Agent such Lender Party's ratable portion of such Borrowing.

	

REPRESENTATIONS AND WARRANTIES

	Representations and Warranties of Holdings and the Borrowers

.  Holdings and each Borrower represents and warrants as follows:

(a)Organization; Powers. Each Loan Party and each of its Subsidiaries (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, (ii) is duly qualified and in good standing as a foreign corporation or other entity in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed would not be reasonably likely to have a Material Adverse Effect and (iii) has all requisite power and authority (including, without limitation, all Governmental Authorizations) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted.  All of the outstanding Equity Interests in each Loan Party and each of the Subsidiaries (in each case other than Holdings and the Company) has been validly issued, is fully paid and non-assessable and as a result of the Reorganization, is owned (directly or indirectly) by the Company free and clear of all Liens, except those created under the Collateral Documents.

(b)Subsidiaries. Set forth on Schedule 4.01(b) hereto is a complete and accurate list of all Subsidiaries of each Loan Party as of the date hereof, showing as of the date hereof (as to each such Subsidiary) the jurisdiction of its incorporation, the number of shares of each class of its Equity Interests authorized, and the number outstanding, on the date hereof and the percentage of each such class of its Equity Interests owned (directly or indirectly) by such Loan Party on the date hereof and the number of shares covered by all outstanding options, warrants, rights of conversion or purchase and similar rights at the date hereof.  

(c)Authorization; No Conflict. The execution, delivery and performance by each Loan Party of each Loan Document and Related Document to which it is or is to be a party, and the consummation of the Asset Transfer, are within such Loan Party's corporate or other powers, have been duly authorized by all necessary corporate or other action, and do not (i) contravene such Loan Party's Constitutive Documents, (ii) violate any Requirements of Law and (iii) except for the Liens created under the Loan Documents, result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries.  The execution, delivery and performance by each Loan Party of each Loan Document to which it is or is to be a party do not conflict with or result in the breach of, or constitute a default or require any payment to be made under, any contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties.  The execution, delivery and performance by each Loan Party of each Related Document to which it is or is to be a party, and the consummation of the Asset Transfer, do not conflict with or result in the breach of, or constitute a default or require any payment to be made under, any loan agreement, indenture, mortgage, deed of trust or other material contract binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties. No Loan Party or any of its Subsidiaries is in violation of any such Requirements of Law or in breach of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which could be reasonably likely to have a Material Adverse Effect.

(d)Governmental Approvals. No Governmental Authorization, and no other authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or any other third party is required for (i) the due execution, delivery, recordation, filing or performance by any Loan Party of any Loan Document to which it is or is to be a party, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof, subject to the Liens permitted under Section 5.02(a)) or (iv) the exercise by any Agent or any Lender Party of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for the authorizations, approvals, actions, notices and filings (A) listed on Schedule 4.01(d) hereto, all of which have been duly obtained, taken, given or made and are in full force and effect, (B) which are not required to be obtained or taken, as the case may be, under the Collateral Documents and (C) may be required to be obtained or taken, as the case may be, under any agreements being terminated on the Closing Date. No Governmental Authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or any other third party is required for the due execution, delivery, recordation, filing or performance by any Loan Party of any Related Document to which it is or is to be a party, except for the authorizations, approvals, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect. All applicable waiting periods in connection with the Asset Transfer have expired without any action having been taken by any competent authority restraining, preventing or imposing materially adverse conditions upon the Asset Transfer or the rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien on, any properties now owned or hereafter acquired by any of them.

(e)Enforceability. This Agreement has been, and each other Loan Document when delivered hereunder will have been, duly executed and delivered by each Loan Party party thereto.  This Agreement is, and each other Loan Document when delivered hereunder will (subject to all insolvency, bankruptcy or similar laws affecting creditors' rights generally) be, the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms.

(f)Litigation. There is no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries pending or, to the knowledge any Loan Party, threatened before any Governmental Authority or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect (other than the Disclosed Litigation) or (ii) purports to affect the legality, validity or enforceability of any Loan Document or Related Document or the consummation of the Transaction, and there has been no adverse change in the status, or financial effect on any Loan Party or any of its Subsidiaries, of the Disclosed Litigation from that described on Schedule 4.01(f) hereto that (A) could be reasonably likely to have a Material Adverse Effect or (B) purports to affect the legality, validity or enforceability of any Loan Document or Related Document or the consummation of the Transaction.

(g)Financial Statements. The Consolidated balance sheet of Holdings and its Subsidiaries as at December 31, 2000, and the related Consolidated statement of income and Consolidated statement of cash flows of Holdings and its Subsidiaries for the fiscal year then ended, accompanied by an unqualified opinion of PricewaterhouseCoopers, LLC, independent public accountants, and the Consolidated balance sheet of Holdings and its Subsidiaries as at June 30, 2001, and the related Consolidated statements of income and Consolidated statement of cash flows of Holdings and its Subsidiaries for the six months then ended, duly certified on behalf of Holdings by the Chief Financial Officer of Holdings, copies of which have been furnished to each Lender Party, fairly present the Consolidated financial condition of Holdings and its Subsidiaries as at such dates and the Consolidated results of operations of Holdings and its Subsidiaries for the periods ended on such dates, all in accordance with generally accepted accounting principles applied on a consistent basis, subject, in the case of unaudited financial statements, to year end audit adjustments and the absence of footnotes, and since December 31, 2000, there has been no Material Adverse Change.

(h)Pro Forma Financial Statements. The Consolidated pro forma balance sheet of Holdings and its Subsidiaries as at June 30, 2001, and the related Consolidated pro forma statements of income and cash flows of Holdings and its Subsidiaries for the six months then ended, certified on behalf of Holdings by the Chief Financial Officer of Holdings, copies of which have been furnished to each Lender Party, fairly present the Consolidated pro forma financial condition of Holdings and its Subsidiaries as at such date and the Consolidated pro forma results of operations of Holdings and its Subsidiaries for the period ended on such date, in each case giving effect to the Transaction, all in accordance with GAAP, subject to year end audit adjustments and the absence of footnotes.

(i)Forecasts. The Consolidated forecasted balance sheet, statement of income and statement of cash flows of Holdings and its Subsidiaries delivered to the Lender Parties pursuant to Section 5.03 were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, Holdings' best estimate of its future financial performance.

(j)No Material Misstatements. Neither the Information Memorandum nor any other information, exhibit or report furnished by or on behalf of any Loan Party to any Agent or any Lender Party in connection with the negotiation and syndication of the Loan Documents or pursuant to the terms of the Loan Documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements made therein not misleading.

(k)Federal Reserve Regulations. No Borrower is engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance or drawings under any Letter of Credit will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock.

(l)Investment Company Act; Public Utility Company. Neither any Loan Party nor any of its Subsidiaries is an "investment company", or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended.  Neither any Loan Party nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", as such terms are defined in the Public Utility Holding Company Act of 1935, as amended.  Neither the making of any Advances, nor the issuance of any Letters of Credit, nor the application of the proceeds or repayment thereof by any Borrower, nor the consummation of the other transactions contemplated by the Loan Documents and Related Documents, will violate any provision of any such Act or any rule, regulation or order of the Securities and Exchange Commission thereunder.

(m)Agreements. Neither any Loan Party nor any of its Subsidiaries is a party to any indenture, loan or credit agreement or any lease or other agreement or instrument (other than the Loan Documents, the Debt Securities, the Bridge Facility, the Exchange Notes and the Surviving Debt as in effect on and as of the date hereof), or subject to any Constitutive Documents or corporate restrictions, that could be reasonably likely to have a Material Adverse Effect.

(n)Security Interests. All filings and other actions necessary to perfect and protect the security interest in the Collateral created under the Collateral Documents have been duly made or taken (other than those not required to be made or taken, as the case may be, under the Collateral Documents), or provision therefor has been duly made, and are in full force and effect, and the Collateral Documents create in favor of the Administrative Agent for the benefit of the Secured Parties a valid and, together with such filings and other actions, perfected first priority security interest in the Collateral, subject to the Liens permitted under Section 5.02(a), securing the payment of the Secured Obligations.  The Loan Parties are the legal and beneficial owners of the Collateral free and clear of any Lien, except for the liens and security interests created or permitted under the Loan Documents.

(o)Solvency. Each Loan Party is, individually and together with its Subsidiaries, Solvent.

(p)Employee Benefit Plans. (i)  Set forth on Schedule 4.01(p) hereto is a complete and accurate list of all Plans and Multiemployer Plans.

(ii)No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan.

(iii)Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) for each Plan, copies of which have been filed with the Internal Revenue Service and furnished to the Lender Parties, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status.

(iv)Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability exceeding $5,000,000 to any Multiemployer Plan.

(v)Neither any Loan Party nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA.

(q)Environmental Matters. Except as set forth on Schedule 4.01(q) hereto, (i)  the operations and properties of each Loan Party and each of its Subsidiaries comply in all respects with all applicable Environmental Laws and Environmental Permits, except for such noncompliance that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, all past noncompliance with such Environmental Laws and Environmental Permits has been resolved without any material ongoing obligations or costs, and no circumstances exist that could reasonably be expected to form the basis of an Environmental Action against any Loan Party or any of its Subsidiaries or any of their properties that could reasonably be expected to have a Material Adverse Effect.

(ii)Except in each case where any of the following could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (a) none of the properties currently or formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or proposed for listing on the NPL or on the CERCLIS or on any analogous foreign, state or local list; (b) there are no underground or aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by any Loan Party or any of its Subsidiaries or, to the best of its knowledge, on any property formerly owned or operated by any Loan Party or any of its Subsidiaries; (c) there is no damaged asbestos or asbestos-containing material on any property currently owned or operated by any Loan Party or any of its Subsidiaries; and (d) Hazardous Materials have not been released, discharged or disposed of on any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries.

(iii)Neither any Loan Party nor any of its Subsidiaries is undertaking, and none of them has completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law; the liabilities and costs associated with which action, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, and all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries have been disposed of in a manner not reasonably expected to result in a Material Adverse Effect to any Loan Party or any of its Subsidiaries.

(r)Tax Matters. (i)  Neither any Loan Party nor any of its Subsidiaries is party to any tax sharing agreement other than a tax sharing agreement approved by the Required Lenders.

(ii)Each Loan Party and each of its Subsidiaries has filed, has caused to be filed or has been included in all Federal and other material state, local and foreign tax returns required to be filed and has paid all taxes shown thereon to be then due, together with applicable interest and penalties (other than those taxes which are being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained in accordance with generally accepted accounting principles).

(iii)Set forth on Schedule 4.01(r) hereto is a complete and accurate list, as of the date hereof, of each Open Year of each Loan Party and each of its Subsidiaries.

(iv)The aggregate unpaid amount, as of the date hereof, of adjustments to the Federal income tax liability of each Loan Party and each of its Subsidiaries proposed by the Internal Revenue Service (or comparable agency with respect to non-U.S. Persons) with respect to Open Years does not exceed $5,000,000.  Set forth on Schedule 4.01(r) hereto is a complete and accurate description, as of the date hereof, of each such item that separately, for all such Open Years, together with applicable interest and penalties, exceeds $5,000,000.  No issues have been raised by the Internal Revenue Service (or any such comparable agency) in respect of Open Years that, in the aggregate, could be reasonably likely to have a Material Adverse Effect.

(v)The aggregate unpaid amount, as of the date hereof, of adjustments to the state, local and foreign tax liability of each Loan Party and its Subsidiaries proposed by all state, local and foreign taxing authorities (other than amounts arising from adjustments to federal income tax returns) does not exceed $5,000,000.  No issues have been raised by such taxing authorities that, in the aggregate, could be reasonably likely to have a Material Adverse Effect.

(vi)Neither the Acquisition, the Reorganization nor the Asset Transfer will be taxable to any Loan Party or the Target or any of its Subsidiaries.

(vii)No "ownership change" as defined in Section 382(g) of the Internal Revenue Code, and no event that would result in the application of the "separate return limitation year" or "consolidated return change of ownership" limitations under the Federal income tax consolidated return regulations, has occurred with respect to any Loan Party since January 1, 1999.

(s)Casualty and Similar Events. Neither the business nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that could be reasonably like to have a Material Adverse Effect.

(t)Existing Debt. Set forth on Schedule 4.01(t) hereto is a complete and accurate list of all Existing Debt (other than Surviving Debt) on the date hereof, showing as of the date hereof the obligor and the principal amount outstanding thereunder.

(u)Surviving Debt. Set forth on Schedule 4.01(u) hereto is a complete and accurate list of all Surviving Debt on the date hereof, showing as of the date hereof the obligor and the principal amount outstanding thereunder, the maturity date thereof and the amortization schedule therefor.

(v)Existing Liens. Set forth on Schedule 4.01(v) hereto is a complete and accurate list of all Liens on the property or assets of any Loan Party (other than Permitted Liens) on the date hereof, showing as of the date hereof the lienholder thereof, the principal amount of the obligations secured thereby and the property or assets of such Loan Party or such Subsidiary subject thereto.

(w)Owned Real Property. Set forth on Schedule 4.01(w) hereto is a complete and accurate list of all real property owned by any Loan Party on the date hereof, showing as of the date hereof the street address, county or other relevant jurisdiction, state, record owner and book and good faith estimates of the fair value of each thereof.  As of the date hereof, each Loan Party has good, marketable and insurable fee simple (or comparable) title to such real property, free and clear of all Liens, other than Liens created or permitted by the Loan Documents.

(x)Leased Real Property. Set forth on Schedule 4.01(x) hereto is a complete and accurate list of all leases of real property under which any Loan Party is the lessee on the date hereof, showing as of the date hereof the street address, county or other relevant jurisdiction, state, lessor, lessee, expiration date and annual rental cost thereof.  To the best knowledge of each Loan Party, each such lease is the legal, valid and binding obligation of the lessor thereof, and each such lease is enforceable in accordance with its terms (subject to all insolvency, bankruptcy or similar laws affecting creditors' rights generally).

(y)Investments. Set forth on Schedule 4.01(y) hereto is a complete and accurate list of all Investments held by any Loan Party on the date hereof, showing as of the date hereof the amount, obligor or issuer and maturity, if any, thereof (other than equity Investments made by any Loan Party in any of its Subsidiaries).

	

COVENANTS OF THE BORROWERS AND HOLDINGS

	Affirmative Covenants

.  So long as any Advance or any other Payment Obligation of any Loan Party under any Loan Document has not been Fully Paid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, Holdings will:

(a)Compliance with Laws, Etc.  Comply, and cause each of its Subsidiaries to comply with all applicable Requirements of Law, such compliance to include, without limitation, compliance with ERISA and the Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970, other than any non-compliance the consequences of which could not adversely affect in any material respect the business, assets or operations of any Loan Party  as now conducted or reasonably likely to be conducted.

(b)Payment of Taxes, Etc.  Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, all material (i) taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) lawful claims that, if unpaid, might by law become a Lien upon its property; provided, however, that no Loan Party nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors.

(c)Compliance with Environmental Laws.  Except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, comply, and cause each of its Subsidiaries and all lessees and other Persons operating or occupying its properties to comply, with all applicable Environmental Laws and Environmental Permits; obtain and renew and cause each of its Subsidiaries to obtain and renew all Environmental Permits necessary for its operations and properties; and conduct, and cause each of its Subsidiaries to conduct, any investigation, study, sampling and testing, and undertake any cleanup, removal, or remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties where required to do so by applicable Environmental Laws; provided, however, that no Loan Party nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, or remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained in compliance with generally accepted accounting practices with respect to such circumstances.

(d)Maintenance of Insurance.  Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts, with such deductibles and self-insurance and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which any Loan Party or such Subsidiary operates.

(e)Preservation of Corporate Existence, Etc.  Preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, its existence, legal structure, legal name, rights (charter and statutory) and franchises and its Governmental Authorizations; provided, however, that Holdings and its Subsidiaries may consummate any merger or consolidation permitted under Section 5.02(d) and provided further that no (i) Loan Party nor any of its Subsidiaries shall be  required to preserve any right, permit, license, approval, privilege or franchise or (ii) Subsidiary which is not a Loan Party shall be prevented from winding-up or dissolving; if in either case the Board of Directors (or equivalent) of such Person shall determine that such non-preservation thereof, or such winding-up or dissolution, as applicable, is not disadvantageous in any material respect to any Loan Party or the Lender Parties.

(f)Visitation Rights.  At any reasonable time during business hours and from time to time, upon reasonable prior notice to Holdings, permit any of the Agents or any of the Lender Parties, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, any Loan Party or any of its Subsidiaries, and to discuss the affairs, finances and accounts of any Loan Party or any of its Subsidiaries with any of their officers or directors and, in the presence of any officer or director of Holdings or any of its Subsidiaries, with their independent certified public accountants.

(g)Keeping of Books.  Keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of each Loan Party and each such Subsidiary in accordance with generally accepted accounting principles in effect from time to time.

(h)Maintenance of Properties, Etc.  Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted (it being understood that the transactions specified in Section 5.02(e) shall be permitted to be made in accordance with such Section).

(i)Transactions with Affiliates.  Conduct, and cause each of its Subsidiaries to conduct, all transactions otherwise permitted under the Loan Documents with any of their Affiliates on terms that are fair and reasonable and no less favorable to any Loan Party or such Subsidiary than it would obtain in a comparable arm's-length transaction with a Person not an Affiliate (it being understood that the transactions specified in Section 5.02(d), (e) and (f) shall be permitted to be made in accordance with such Section).

(j)Covenant to Guarantee Obligations and Give Security.  Upon (x) the request of the Administrative Agent following the occurrence and during the continuance of an Event of Default, (y) the formation or acquisition of any new direct or indirect Subsidiaries by any Loan Party or (z) the acquisition by any Loan Party of any property, intercompany debt (which is owed to such Loan Party) or assets (real or personal), and such property, assets or intercompany debt, in the judgment of the Administrative Agent, shall not already be subject to a perfected first priority security interest in favor of the Administrative Agent for the benefit of the Secured Parties, then cause such Loan Party to, in each case at its own expense:

(i)in connection with the formation or acquisition of a Subsidiary (other than any such Subsidiary which is either (A) a "Controlled Foreign Corporation" (as defined from time to time under Section 957 of the Internal Revenue Code) or a Subsidiary of a "Controlled Foreign Corporation" that is not treated as a corporation under the Internal Revenue Code or (B) an Immaterial Subsidiary (provided that if any such Subsidiary shall at any time cease to be an Immaterial Subsidiary, this paragraph (j) shall apply to such Subsidiary), within 10 Business Days after such formation or acquisition, unless prohibited by applicable law, cause each such Subsidiary, and cause each direct and indirect parent of such Subsidiary (if it has not already done so), to duly execute and deliver to the Administrative Agent a guaranty or guaranty supplement, in form and substance reasonably satisfactory to the Administrative Agent, guaranteeing the other Loan Parties' obligations under the Loan Documents,

(ii)within 10 Business Days after such request, formation or acquisition, furnish to the Administrative Agent a description of the real and personal properties of the Loan Parties and their respective Subsidiaries in detail reasonably satisfactory to the Administrative Agent,

(iii)within 15 Business Days after such request, formation or acquisition, unless prohibited by applicable law, duly execute and deliver, and cause each such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to duly execute and deliver, to the Administrative Agent mortgages on material real properties (as determined by the Administrative Agent; provided that nothing in this clause (iii) shall require Holdings or any of its Subsidiaries to provide a mortgage over any land acquired within 12 months of the Closing Date, located in Australia (other than the Australian Capital Territory)), pledges, assignments, Security Agreement Supplements, IP Security Agreement Supplements and other security agreements, as specified by and in form and substance reasonably satisfactory to the Administrative Agent, securing payment of all the Obligations of the applicable Loan Party, such Subsidiary or such parent, as the case may be, under the Loan Documents and constituting Liens on all such properties, provided that the Administrative Agent may extend the 15 Business Day time period specified in this clause (iii) by up to an additional 15 Business Days if requested by the Company.

(iv)within 30 days after such request, formation or acquisition, take, and cause such Subsidiary or such parent to take, whatever action (including, without limitation, the recording of mortgages, the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) may be necessary in the opinion of the Administrative Agent to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on the properties purported to be subject to the mortgages, pledges, assignments, Security Agreement Supplements, IP Security Agreement Supplements and security agreements delivered pursuant to this Section 5.01(j), enforceable against all third parties in accordance with their terms, provided that the Administrative Agent may extend the 30 day time period specified in this clause (iv) by up to an additional 30 days if requested by the Company,

(v)within 30 days after such request, formation or acquisition, deliver to the Administrative Agent, upon the request of the Administrative Agent in its sole discretion, a signed copy of a legal opinion satisfactory to the Administrative Agent, addressed to the Administrative Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Administrative Agent as to the matters contained in clauses (i), (iii) and (iv) above, as to such guaranties, guaranty supplements, mortgages, deeds of trust, pledges, assignments, Security Agreement Supplements, IP Security Agreement Supplements and security agreements being legal, valid and binding obligations of each Loan Party party thereto enforceable in accordance with their terms, as to the matters contained in clause (iv) above, as to such recordings, filings, notices, endorsements and other actions being sufficient to create valid perfected Liens on such properties, and as to such other matters as the Administrative Agent may reasonably request,

(vi)as promptly as practicable after such request, formation or acquisition, deliver, upon the request of the Administrative Agent in its sole discretion, to the Administrative Agent with respect to each parcel of real property owned or held by the entity that is the subject of such request, formation or acquisition title reports, surveys and engineering, soils and other reports, and environmental assessment reports, each in scope, form and substance reasonably satisfactory to the Administrative Agent, provided, however, that, to the extent that any Loan Party or any of its Subsidiaries shall have otherwise received any of the foregoing items with respect to such real property, such items shall, promptly after the receipt thereof, be delivered to the Administrative Agent, and

(vii)upon the occurrence and during the continuance of an Event of Default,  promptly cause to be deposited any and all cash dividends paid or payable to it, to the fullest extent permitted by applicable law, or to any of its Subsidiaries from any of its Subsidiaries from time to time into the Collateral Account, and with respect to all other dividends paid or payable to it or to any of its Subsidiaries from time to time, promptly execute and deliver or cause such Subsidiary to promptly execute and deliver, as the case may be, any and all further instruments and take or cause any such Subsidiary which is a U.S. Subsidiary to take, as the case may be, all such other action as the Administrative Agent may determine necessary in order to obtain and maintain from and after the time such dividend is paid or payable a perfected, first priority lien on and security interest in such dividends.

(k)Further Assurances.  (i)  Promptly upon request by any Agent, or any Lender Party through the Administrative Agent, correct, and cause each of its Subsidiaries promptly to correct, any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and

(ii)promptly upon request by any Agent, or any Lender Party through the Administrative Agent, do, execute, acknowledge, deliver, record, rerecord, file, refile, register and reregister any and all such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of trust, trust deeds, assignments, financing statements and continuations thereof, termination statements, notices of assignment, transfers, certificates, assurances and other instruments as any Agent, or any Lender Party through the Administrative Agent, may reasonably require from time to time in order to (A) carry out more effectively the purposes of the Loan Documents, (B) to the fullest extent permitted by applicable law, subject any Loan Party's or any of its Subsidiaries' properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (C) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (D) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.

(l)Preparation of Environmental Reports.  At the request of the Administrative Agent from time to time upon a reasonable belief that any Loan Party has breached any representation or covenant herein regarding environmental matters, or that any of the environmental matters set forth on Schedule 4.01(q) have changed in a manner that could reasonably be expected to result in a Material Adverse Effect, provide to the Lender Parties within 60 days after such request, at the expense of Holdings, an environmental site assessment report with respect to the subject matter of such actual or potential breach, prepared by an environmental consulting firm acceptable to the Administrative Agent, indicating, as relevant under the circumstances, the presence or absence of Hazardous Materials and the estimated cost of any compliance, removal or remedial action in connection with any Hazardous Materials; or without limiting the generality of the foregoing, if the Administrative Agent reasonably determines at any time that a material risk exists that any such report will not be provided within the time referred to above, the Administrative Agent may retain an environmental consulting firm to prepare such report at the expense of Holdings, and Holdings hereby grants and agrees to cause any Subsidiary that owns any property described in such request to grant at the time of such request to the Agents, the Lender Parties, such firm and any agents or representatives thereof an irrevocable nonexclusive license, subject to the rights of tenants, to enter onto their respective properties to undertake such an assessment.

(m)Compliance with Terms of Leaseholds.  Make all payments and otherwise perform all material obligations in respect of all material leases of real property to which any Loan Party or any of its Subsidiaries is a party, keep such leases in full force and effect (to the extent it can do so) and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled (except where such lapse, termination, forfeiture or cancellation could not reasonably be expected to result in a Material Adverse Effect), notify the Administrative Agent of any default by any party with respect to such leases and cooperate with the Administrative Agent in all respects to cure any such default, and cause each of its Subsidiaries to do so.

(n)Acknowledgment Copy of Financing Statements.  Promptly following receipt of the acknowledgment copy of any UCC financing statement filed in any applicable jurisdiction by or on behalf of the Secured Parties, deliver such acknowledgment copy to the Administrative Agent.

(o)Collateral Accounts.  Maintain the Collateral Account and the L/C Cash Collateral Account with Bank of America or another commercial bank acceptable to the Administrative Agent located in the United States which has accepted the assignment of such accounts to the Administrative Agent for the benefit of the Secured Parties pursuant to the Security Agreement.

(p)Interest Rate Hedging.  Enter into within 90 days after the Closing Date, and maintain at all times thereafter, interest rate Hedge Agreements with Persons acceptable to the Administrative Agent, with an initial average life of at least three years, such that the interest rate of a notional principal amount of debt at least equal to 50% of the aggregate amount of monies borrowed by Holdings and its Subsidiaries has been set at a fixed rate.

(q)Performance and Compliance with Related Agreements.  Perform and comply with all the material terms and conditions of the Related Agreements.

(r)Certain Post-Closing Matters.  (A)  As soon as practicable and in any case within 90 days after the Closing Date, take any and all necessary action and execute all documents and instruments and make all necessary filings in order to ensure that BidCo makes a U.S. tax "check the box election" such that the Administrative Agent is satisfied that BidCo will be treated as tax resident for U.S. tax purposes.

(B)As soon as practicable and in any case within 30 days after the Asset Transfer has occurred in accordance with the Put and Call Option Agreement, (i) ensure that (a) each U.S. Subsidiary of the Company constituting part of the Acquired Business has executed and delivered a Subsidiary Guaranty and (b) a fully perfected first priority security interest is granted in favor of the Administrative Agent for the benefit of the Secured Parties over those U.S. assets of the Acquired Business not then subject to a first priority Lien in favor the Administrative Agent for the benefit of the Secured Parties in a manner set out in, and in accordance with, Section 5.01(j), in each case at the expense of Holdings or (ii) take one or more of the following steps: (x) provide, and cause each of its applicable Subsidiaries (including non-U.S. Subsidiaries) to provide, such guarantees, mortgages, pledges, assignments and other collateral security documents, (y) procure from Affiliates or other Persons such letters of credit, bankers' acceptances, surety bonds or similar instruments or (z) agree to such other changes to pricing, structure, tenor and other terms of the Loan Documents (including, without limitation, such changes to the leverage and debt covenants, and related definitions, as may be necessary to accommodate certain Contingent Obligations of the Acquired Business), in each case, at Holding's expense, as the Administrative Agent and the Required Lenders may determine, in consultation with Holdings (taking into account cost-efficiency considerations and other parameters to be agreed) are necessary to provide additional or increased financial benefits to the Agents and Lender Parties, which when combined with improvements to the credit profile of Holdings and considered in the aggregate are substantially equivalent, on a commercial basis, to the documents and actions specified in clause (i) above.

(C)As soon as practicable and in any case within 90 days after the Closing Date, take any and all necessary action and execute all documents and instruments and make all necessary filings with the patent and trademark office or comparable filing office or agency, in each case where a filing must be made or notice given or other action taken in order to allow for the perfection of a Lien (where applicable) on patents and trademarks owned by any Loan Party and registered locally under the laws of the Included Foreign Jurisdictions, other than, in any case, where the Administrative Agent determines that compliance with such requirements is not practicable to be completed by such time or at all.

(D)As soon as practicable and in any case within 45 days after the industrial revenue bonds issued with respect to the respective properties located in Baltimore, Maryland and Lincolnton, North Carolina have been paid in full, execute and deliver to the Administrative Agent a mortgage in each case with respect to each such property, along with such other documents and instruments as the Administrative Agent may reasonably request in connection therewith in order to create and perfect a valid and subsisting first priority Lien on such property, including those of the type specified in Section 3.01(a)(iv) and satisfactory legal opinions, in each case in form and substance reasonably satisfactory to the Administrative Agent. 

(E)As soon as practicable and in any case within 45 days after the plant owned by Alpharma Animal Health Company located in Lowell, Arkansas, is repaired or rebuilt sufficiently to permit normal business operations to resume at such facility, execute and deliver to the Administrative Agent a mortgage with respect to such property, along with such other documents and instruments as the Administrative Agent may reasonably request in connection therewith in order to create and perfect a valid and subsisting first priority Lien on such property, including those of the type specified in Section 3.01(a)(iv), satisfactory legal opinions and environmental reports, in each case in form and substance reasonably satisfactory to the Administrative Agent.

(F)As soon as practicable and in any case (1) by October 31, 2001, deliver audited Consolidated financial statements of each of the Acquired Business and Holdings and its Subsidiaries for the two and three year periods, respectively, prior to the Closing Date and (with respect to the Acquired Business) unaudited financial statements for the six month period ended December 31, 2000 and (2) within 15 days after the Closing Date, deliver a written certification by its Chief Financial Officer or Treasurer to the Administrative Agent stating that the Total Leverage Ratio as of the end of the fiscal quarter ended June 30, 2001, as calculated on a rolling four-quarter basis, using audited financial statements of Holdings and its Subsidiaries and the Acquired Business for the two year period prior to the Closing Date and giving effect to all Advances made under the Facilities on the Closing Date, is less than or equal to 4.75:1.00. If the certification in the preceding clause (2) can not be made because the Total Leverage Ratio calculated as aforesaid exceeds 4.75:1.00, Holdings shall, within 30 days after the Closing Date, take such action as shall be necessary (including, without limitation, through the underwritten or privately placed sale for cash of common stock of Holdings, the conversion into Holdings common stock of the Existing Notes, the sale of assets or other deleveraging actions) to reduce the amount of consolidated Indebtedness of Holdings and its Subsidiaries such that the Total Leverage Ratio for such four quarter period is less than or equal to 4.75:1.00. 

(G)As soon as practicable and in any case within 45 days after the Closing Date, either (i) cause each of Alpharma de Argentina S.R.L., Alpharma do Brazil Ltda. and Alpharma U.S. Inc. Y Compania Limitada, to become direct or indirect subsidiaries of Alpharma Bermuda G.P. or (ii) execute and deliver to the Administrative Agent a stock pledge covering 66% of the capital stock of each such subsidiary which has not been reorganized in such manner, along with such other documents and instruments as the Administrative Agent may reasonably request in connection therewith in order to create and perfect a first priority lien in such capital stock, including those of the type specified in Section 3.01(a)(ii) and satisfactory legal opinions (including local law opinions), in each case in form and substance reasonably satisfactory to the Administrative Agent.

(H)With respect to landlords consents required in connection with leasehold mortgages for the real properties located in Palmyra, Missouri and Willow Island, West Virginia, use commercially reasonable efforts to obtain landlord consents to leasehold mortgages with respect to such properties, and as soon as practicable after the time that such consents are obtained, execute and deliver to the Administrative Agent a leasehold mortgage with respect to each such property, along with such other documents and instruments as the Administrative Agent may reasonably request in connection therewith in order to create and perfect a valid and subsisting first priority Lien on such leasehold, including those of the type specified in Section 3.01(a)(iv) and satisfactory legal opinions, in each case in form and substance reasonably satisfactory to the Administrative Agent.

(I)With respect to the trademark "FEVERALL", which is owned by Alpharma USPD Inc., use commercially reasonable efforts to obtain a release of the lien on such trademark by Upsher-Smith Laboratories, Inc. as soon as practicable after the Closing Date. 

(J)As soon as practicable and in any case within 120 days after the Closing Date, take any and all necessary action and execute all documents and instruments and make all necessary filings as may be required by any Governmental Authority such that the Administrative Agent is reasonably satisfied that the property located at 400 State Street, Chicago Heights, Illinois will be assessed and taxed separately from all other realty as of the 2003 real estate tax year.

	Negative Covenants

.  So long as any Advance or any other Payment Obligation of any Loan Party under any Loan Document has not been Fully Paid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, neither Holdings nor any Borrower shall, at any time:
(a)Liens, Etc.  Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any of its properties of any character (including, without limitation, accounts) whether now owned or hereafter acquired, or sign or file or suffer to exist, or permit any of its Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial Code of any jurisdiction, a financing statement that names any Loan Party or any of its Subsidiaries as debtor, or sign or suffer to exist, or permit any of its Subsidiaries to sign or suffer to exist, any security agreement authorizing any secured party thereunder to file such financing statement, or assign, or permit any of its Subsidiaries to assign, any accounts or other right to receive income, except:
(i)Liens created under the Loan Documents;

(ii)Permitted Liens;

(iii)Liens existing on the date hereof and described on Schedule 4.01(v) hereto; 

(iv)purchase money Liens upon or in real property or equipment acquired or held by any Loan Party or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such property or equipment or to secure Debt incurred solely for the purpose of financing the acquisition, construction or improvement of any such property or equipment to be subject to such Liens, or Liens existing on any such property or equipment at the time of acquisition (other than any such Liens created in contemplation of such acquisition that do not secure the purchase price), or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount; provided, however, that no such Lien shall extend to or cover any property other than the property or equipment being acquired, constructed or improved, and no such extension, renewal or replacement shall extend to or cover any property not theretofore subject to the Lien being extended, renewed or replaced; and provided further that the aggregate principal amount of the Debt secured by Liens permitted by this clause (iv) shall not exceed the amount permitted under Section 5.02(b)(iii)(B) at any time outstanding;

(v)Liens arising in connection with Capitalized Leases permitted under Section 5.02(b)(iii)(C); provided that no such Lien shall extend to or cover any Collateral or assets other than the assets subject to such Capitalized Leases;

(vi)other Liens securing Debt outstanding in an aggregate principal amount not to exceed $20,000,000, provided that no such Lien shall extend to or cover any Collateral; 

(vii)the replacement, extension or renewal of any Lien permitted by clauses (iii) through (vi) above upon or in the same property theretofore subject thereto or the replacement, extension or renewal (without increase in the amount or change in any direct or contingent obligor) of the Debt secured thereby; 

(viii)Liens on the proceeds of the Debt Securities, provided that such proceeds are deposited with a collateral trustee and held in an escrow account constituting cash collateral as specified in Section 2.03(c)(iii); and

(ix)Liens securing the Debt permitted under Section 5.02(b)(iii)(E); provided that no such Lien shall extend to or cover any Collateral.

(b)Debt.  Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt, except:
(i)in the case of the Company,
(A)the Debt Securities; and

(B)Debt constituted by the Bridge Facility, any rollover loans thereunder and any Exchange Notes issued in connection therewith;

(ii)in the case of the Company or any Subsidiary of the Company,
(A)any Debt owing by any Guarantor to any other Guarantor or the Company;

(B)any Debt owing by the Company or any Guarantor to any other Subsidiary of Holdings;

(C)any Debt owing by any Subsidiary of Holdings that is not a Guarantor to any other Subsidiary of Holdings that is not a Guarantor;

(D)any Debt owing by any Subsidiary of Holdings that is not a Guarantor (or Contingent Obligations made in respect of the obligations of any such Person) to the Company or any Guarantor not to exceed an aggregate principal amount incurred of $20,000,000 in any Fiscal Year; provided that (1) all Net Cash Proceeds from the (i) issue and sale of Equity Interests by Holdings and (ii) incurrence of Debt pursuant to Section 5.02(b)(iii)(J) which are, in either case, invested or reinvested in assets used or useful in the business of Holdings and its Subsidiaries as provided in this Agreement in the nature of such Debt do not count towards the sub-limit specified in this clause (D), (2) the amount of any equity interests existing as of the Closing Date in Subsidiaries of Holdings that are not Guarantors which are reclassified after the Closing Date as Debt in accordance with local law or regulation do not count towards the sub-limit specified in this clause (D), (3) it is understood that the Debt permitted to be incurred under this clause (D) is in addition to any Debt forming part of Investments permitted under Section 5.02(f)(vii) and (4) no such Debt under this clause (D) shall be incurred (i) after the occurrence and during the continuance of a Default and (ii) for purposes of funding, directly or indirectly, the purchase or other acquisition of property and assets of the type referred to in Section 5.02(f)(viii), in an amount which, individually or when aggregated with any other amounts invested for such purpose pursuant to Section 5.02(f)(vii), is in excess of the applicable amount otherwise permitted to be expended for such purpose pursuant to Section 5.02(f)(viii)(D); and

(E)in addition to any Debt otherwise permitted under clause (D) above, any Debt owing by any Subsidiary of Holdings that is not a Guarantor to the Company or any Guarantor consisting of intercompany accounts receivable of the Company or such Guarantor representing in each case the bona fide sale and delivery of product inventory to such Subsidiary in the ordinary course of business, and which receivables have been reclassified as Debt owing to the Company or such Guarantor in accordance with generally accepted accounting principles consistent with prior practice.  

(iii)in the case of each Loan Party and its Subsidiaries, and without duplication of clauses (i) and (ii):
(A)Debt under the Loan Documents;

(B)Debt secured by Liens permitted by Section 5.02(a)(iv) not to exceed in the aggregate $20,000,000 at any time outstanding;

(C)Capitalized Leases not to exceed in the aggregate $20,000,000 at any time outstanding;

(D)the Surviving Debt, and any Debt extending the maturity of, or refunding or refinancing, in whole or in part, any Surviving Debt, provided that the terms of any such extending, refunding or refinancing Debt, and of any agreement entered into and of any instrument issued in connection therewith, are otherwise permitted by the Loan Documents, provided further that the principal amount of such Surviving Debt shall not be increased above the principal amount thereof outstanding immediately prior to such extension, refunding or refinancing, and the direct and contingent obligors therefor shall not be changed, as a result of or in connection with such extension, refunding or refinancing, provided still further that the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such extending, refunding or refinancing Debt, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Loan Parties or the Lender Parties than the terms of any agreement or instrument governing the Surviving Debt being extended, refunded or refinanced and the interest rate applicable to any such extending, refunding or refinancing Debt does not exceed the then applicable market interest rate;

(E)Debt constituting local loans or other credit extensions from local lenders in jurisdictions outside the United States; provided that the sum of the aggregate principal amount of such Debt and all Surviving Debt of such type (including any Debt extending the maturity of, or refunding or refinancing, in whole or in part, any such Surviving Debt) does not exceed $60,000,000 at any time outstanding;

(F)Debt, not to exceed in the aggregate $20,000,000 at any time outstanding, incurred as a result of the issue of guarantees issued in support of local overdraft lines;

(G)Debt of the type secured by Liens permitted by Section 5.02(a)(vi) or unsecured Debt incurred in the ordinary course of business for borrowed money in an aggregate amount under this clause (G) not more than $20,000,000 at any one time outstanding; 

(H)Debt in respect of the Secured Hedge Agreements; 

(I)Debt in connection with any intercompany loans entered into for the purpose of funding the Parent Loan by Holdings; and

(J)in addition to any Debt otherwise permitted under this Section 5.02(b), at any time after which all of the December Convertible Notes and all of the October Convertible Notes have been converted into common stock of Holdings, Debt consisting of (i) local loans or other credit extensions from local lenders in jurisdictions outside the United States or (ii) an additional amount of Debt Securities issued as may be specified in the Notes Indenture or (iii) a Designated Capital Markets Transaction which is approved by the Administrative Agent (and the Required Lenders, as applicable) in accordance with Section 7.01(d) hereof; in any case under this clause (J) not to exceed a principal amount of $150,000,000.

(c)Change in Nature of Business.  Make, or permit any of its Subsidiaries to make, any material change in the nature of the business of the Company and its Subsidiaries taken as a whole as carried on at the date hereof.

(d)Mergers, Etc.  Merge into or consolidate with any Person or permit any Person to merge into it, or permit any of its Subsidiaries to do so, except that:
(i)any Subsidiary of any Loan Party may merge into or consolidate with any other Subsidiary of that Loan Party, provided that, in the case of any such merger or consolidation, the Person formed by such merger or consolidation shall be a wholly owned Subsidiary of that Loan Party, provided further that, in the case of any such merger or consolidation to which a Guarantor is a party, the Person formed by such merger or consolidation shall be a Guarantor;

(ii)in connection with any acquisition permitted under Section 5.02(f)(viii), any Subsidiary of any Loan Party may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that the Person surviving such merger shall be a wholly owned Subsidiary of the relevant Loan Party; and

(iii)any of a Loan Party's Subsidiaries may merge into that Loan Party.

(e)Sales, Etc., of Assets.  Sell, lease, transfer or otherwise dispose of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets, or grant any option or other right to purchase, lease or otherwise acquire any assets, except:
(i)sales of Inventory in the ordinary course of its business;

(ii)sales, transfers, licenses, leases or other dispositions of assets made by (A) one Loan Party or a Subsidiary of Holdings which is not a Loan Party to, in either case, a Loan Party  or (B) a Subsidiary of Holdings which is not a Loan Party  to another  Subsidiary of Holdings which is not a Loan Party;

(iii)sales of assets for cash made by one Loan Party to a Subsidiary of Holdings which is not a Loan Party so long as (A) the aggregate purchase price paid to that Loan Party for such asset disposal (whether as a single transaction or as a series of transactions and whether related or not) shall not at any time exceed $5,000,000 and (B) the aggregate purchase price paid to that Loan Party for such asset, when aggregated with the purchase price paid to all Loan Parties for other assets sold pursuant to this clause (iii), shall not at any time exceed $10,000,000;

(iv)sales of assets for cash identified on Schedule 5.02(e) hereto for prices no less than the fair market value of such asset at the time of such sale;

(v)the sale or lease of any asset by any Loan Party or any of its Subsidiaries (other than a bulk sale of Inventory and a sale of Receivables other than delinquent accounts for collection purposes only) so long as (A) the purchase price paid to that Loan Party or such Subsidiary for such asset (or the net present value of the lease payments, as applicable) shall be no less than the fair market value of such asset at the time of such sale or lease, (B) the purchase price (or lease payments, as applicable) for such asset shall be paid to such Loan Party or such Subsidiary solely in cash, (C) (1) immediately before and immediately after giving pro forma effect to any sale or lease of any such asset, no Default shall have occurred and be continuing and (2) immediately after giving effect to such sale or lease, Holdings and its Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 5.04, such compliance to be determined on the basis of the Required Financial Information most recently delivered to the Administrative Agent and the Lender Parties as though such sale or lease had been consummated as of the first day of the fiscal period covered thereby, and (D) the aggregate purchase price  (or the net present value of the lease payments, as applicable) paid to any Loan Party or any of its Subsidiaries for such asset and all other assets sold or leased by any Loan Party or any of its Subsidiaries pursuant to this clause (v) shall not exceed $5,000,000 in any Fiscal Year and shall not exceed $10,000,000 in the aggregate for all such asset sales and leases made pursuant to this clause (v);

(vi)sales, transfers or other dispositions of assets no longer used or useful in the business (including exchanges of such assets for like-kind assets, and disposals of such assets to insurers in respect of casualty or condemnation);

(vii)disposals of assets to any Governmental Authority in exchange for compensation in respect of condemnation actions;

(viii)mergers permitted under Section 5.02(d); and

(ix)the licensing of intellectual property in the ordinary course of business, provided such licensing (other than any licensing to a Loan Party) takes place on an arm's length basis consistent with past practice;

provided that in the case of sales of assets other than pursuant to clause (i), (ii), (vi) and (viii) above, the Company shall, on the date of receipt by any Loan Party or any of its Subsidiaries of the Net Cash Proceeds from such sale apply such Net Cash Proceeds pursuant to, and in accordance with Section 2.06(b)(ii).

(f)Investments in Other Persons.  Make or hold, or permit any of its Subsidiaries to make or hold, any Investment in any Person, except:
(i)equity Investments by (A) Holdings and its Subsidiaries in their Subsidiaries outstanding on the date hereof and any other additional investments in Guarantors and (B) Subsidiaries of Holdings which are not Loan Parties in other Subsidiaries of Holdings which are not Loan Parties;

(ii)loans and advances to employees in the ordinary course of the business in an aggregate principal amount not to exceed $1,000,000 at any time outstanding;

(iii)Investments by any Loan Party and its Subsidiaries in Cash Equivalents;

(iv)Investments existing on the date hereof and described on Schedule 4.01(y) hereto;

(v)Investments in the Secured Hedge Agreements permitted under this Agreement;

(vi)Investments consisting of intercompany Debt permitted under Section 5.02(b)(ii);

(vii)Investments by any Loan Party in Subsidiaries which are not Guarantors not to exceed $20,000,000 in any Fiscal Year; provided that (1) all Net Cash Proceeds from the issue and sale of Equity Interests by Holdings which are either invested or reinvested in assets used or useful in the business of Holdings and its Subsidiaries as provided in this Agreement in the nature of such Investments do not count towards the sub-limit specified in this clause (vii), (2) the amount of any Debt existing as of the Closing Date owing by Subsidiaries of Holdings that are not Guarantors to the Company or any Guarantor which are reclassified after the Closing Date as equity in accordance with local law or regulation do not count towards the sub-limit specified in this clause (vii),  (3) it is understood that the debt permitted to be incurred under this clause (vii) is in addition to any Debt permitted under Section 5.02(b)(ii)(D) and (4) no such Investments under this clause (vii) shall be incurred (i) after the occurrence and during the continuance of a Default and (ii) for purposes of funding, directly or indirectly, the purchase or other acquisition of property and assets of the type referred to in Section 5.02(f)(viii), in an amount which, individually or when aggregated with any other amounts provided for such purpose pursuant to Section 5.02(b)(ii)(D), is in excess of the applicable amount otherwise permitted to be expended for such purpose pursuant to Section 5.02(f)(viii)(D);

(viii)the purchase or other acquisition of the property and assets comprising a division or business unit, or all or a substantial part of the business of, or all of the Equity Interests in, or all or substantially all of the property and assets of, any Person that, upon the consummation thereof, will be wholly owned directly by a Loan Party or one or more of its wholly owned Subsidiaries (including, without limitation, as a result of a merger or consolidation); provided that, with respect to each purchase or other acquisition made pursuant to this clause (viii):
(A)any such newly created or acquired Subsidiary shall comply with the requirements of Sections 5.01(j) applicable to it;

(B)the lines of business of the Person to be (or the property and assets of which are to be) so purchased or otherwise acquired shall be substantially the same lines of business as one or more of the principal businesses of Holdings and its Subsidiaries in the ordinary course;

(C)such purchase or other acquisition shall not include or result in any contingent liabilities that could be reasonably be expected to result in a Material Adverse Effect (as determined in good faith by the board of directors (or the persons performing similar functions) of Holdings or such Subsidiary if the board of directors is otherwise approving such transaction and, in each other case, by a Responsible Officer);

(D)the total cash consideration paid by or on behalf of a Loan Party or any of its Subsidiaries for all such purchases and acquisitions made pursuant to this clause (viii) at any time at which (1) any of the December Convertible Notes or any of the October Convertible Notes are still outstanding, shall not exceed the amount in any Fiscal Year as set forth in column I below or (2) all of the December Convertible Notes and all of the October Convertible Notes have been converted into common stock of Holdings, shall not exceed the amount in any Fiscal Year as set forth in column II below; it being understood that (i) all indemnities, earnouts and other similar contingent purchase price payment obligations to, and the aggregate amounts paid or to be paid under noncompete, consulting and other affiliated agreements with, the sellers thereof, all write-downs of property and assets and reserves for liabilities with respect thereto and all assumptions of Debt in connection therewith count towards the amounts set forth below, (ii) all Net Cash Proceeds from Asset Dispositions by Holdings or any of its Subsidiaries or the issue and sale of Equity Interests by Holdings which are either invested or reinvested in assets used or useful in the business of Holdings and its Subsidiaries as provided in this Agreement do not count towards the amounts set forth below and (iii) the Asset Transfer shall be deemed (and permitted) to occur in Fiscal Year 2001 for purposes of the table below:

	
Fiscal Year      Ending In
	
Column I             (Any Existing     Notes Outstanding)
	
Column II               (No Existing       Notes Outstanding)

	
2001
	
$0
	
$0

	
2002
	
$50,000,000
	
$75,000,000

	
2003
	
$60,000,000
	
$100,000,000

	
2004
	
$70,000,000
	
$125,000,000

	
2005
	
$80,000,000
	
$150,000,000

	
2006
	
$90,000,000
	
$150,000,000

	
2007
	
N/A
	
$150,000,000

	
2008
	
N/A
	
$150,000,000

provided, however that if, for any Fiscal Year, the amount specified above for such Fiscal Year in column I exceeds the aggregate cash consideration paid by or on behalf of a Loan Party and its Subsidiaries for such purchases and acquisitions during such Fiscal Year (the amount of such excess being the "Excess Amount"), Holdings and its Subsidiaries shall be entitled to make additional purchases and acquisitions in cash in the immediately succeeding Fiscal Year in an amount (such amount being referred to herein as the "Carryover Amount") equal to the lesser of (i) the Excess Amount and (ii) 50% of the amount specified above for such immediately preceding Fiscal Year in column I, 

(E)(1) immediately before and immediately after giving pro forma effect to any such purchase or other acquisition, no Default shall have occurred and be continuing and (2) immediately after giving effect to such purchase or other acquisition, Holdings and its Subsidiaries shall be in pro forma compliance with all of the covenants set forth in Section 5.04, such compliance to be determined on the basis of the Required Financial Information most recently delivered to the Administrative Agent and the Lender Parties as though such purchase or other acquisition had been consummated as of the first day of the fiscal period covered thereby; and

(F)Holdings shall have delivered to the Administrative Agent, on behalf of the Lender Parties, at least five Business Days prior to the date on which any such purchase or other acquisition is to be consummated, a certificate of a Responsible Officer, in form and substance reasonably satisfactory to the Administrative Agent, certifying that all of the requirements set forth in this clause (vii) have been satisfied or will be satisfied on or prior to the consummation of such purchase or other acquisition;

(ix)Investments made in accordance with the Related Documents (including, without limitation, the Parent Loan (and intercompany loans or investments necessary to accommodate the Parent Loan by Holdings) and payments made by or on behalf of Holdings to the Acquired Business in accordance with the Management Agreement);  and

	Investments in other Persons not to exceed $7,500,000 in the aggregate. 

(g)Restricted Payments.  In the case of each of Holdings and the Company, declare or pay any dividends, purchase, redeem, retire, defease or otherwise acquire for value any of its Equity Interests now or hereafter outstanding, return any capital to its stockholders, partners or members (or the equivalent Persons thereof) as such, make any distribution of assets, Equity Interests, obligations or securities to its stockholders, partners or members (or the equivalent Persons thereof) as such or issue or sell any Equity Interests (except that, in the case of Holdings, Equity Interests of Holdings may be issued and sold (1) for the purposes of financing Investments permitted under this Agreement provided that the Net Cash Proceeds of any such issuances are applied pursuant to, and in accordance with, Section 2.06(b)(ii), (2) for the purposes of satisfying obligations referred to in sub-clause (iv) below and (3) in accordance with the provisions of this Agreement, so long as the Net Cash Proceeds thereof are otherwise applied pursuant to, and in accordance with, the provisions of Section 2.06(b)(ii)) or accept any capital contributions, or permit any of its Subsidiaries to do any of the foregoing in respect of the Equity Interests of Holdings or the Company, or permit any of its Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value any Equity Interests in Holdings or the Company or to issue or sell any Equity Interests therein, except that, so long as no Default or Event of Default shall have occurred and be continuing at the time of any action described below or would result therefrom:
(i)Holdings may declare and pay dividends and distributions payable only in its common stock,

(ii)Holdings may declare and pay cash dividends to its stockholders in an amount not to exceed, for the period (i) from the Closing Date through December 31, 2002, $0.045 per share in any Fiscal Quarter and (ii) thereafter, $0.045 per share (as adjusted for stock splits or similar transactions after the Closing Date) in any Fiscal Quarter plus an increased amount (the amount of such increase being the "Increased Dividend Amount"), provided that the Increased Dividend Amount (A) paid in any Fiscal Year shall reduce on a dollar-for-dollar basis the $10,000,000 amount specified in clause (vi) below for such Fiscal Year and (B) will not exceed $5,000,000 in the aggregate,

(iii)Holdings may issue capital stock in connection with the conversion of the Existing Notes provided that the aggregate amount of the cash component of such conversions does not exceed $5,000,000,

(iv)Holdings may purchase, redeem, retire or otherwise acquire shares of its own outstanding capital stock that have been issued to employees, directors or consultants or issued in connection with employee stock options or stock purchase plans (including such plans for the benefit of directors and consultants) in an amount not to exceed $5,000,000 in any Fiscal Year (excluding, for the purposes of calculating this sub-limit, funds provided by employees and directors of, and consultants to, Holdings to effect such purchases, redemptions or other acquisitions),

(v)The Company may make payments in respect of the Exchange Notes and Debt Securities, and

(vi)Holdings may purchase, redeem, retire or otherwise acquire shares of its own outstanding capital stock in an amount not to exceed $10,000,000 in any Fiscal Year (as such amount is reduced pursuant to clause (ii) above in any Fiscal Year by the Increased Dividend Amount in such Fiscal Year).

(h)Amendments of Constitutive Documents.  Amend, or permit any of its Subsidiaries to amend, any of its Constitutive Documents in a manner which would impair the rights or interests of any Agent or any Lender Party.

(i)Accounting Changes.  Make or permit, or permit any of its Subsidiaries to make or permit, any change in (i) accounting policies or reporting practices, except as required by generally accepted accounting principles or applicable law, or (ii) Fiscal Year.

(j)Prepayments, Etc., of Debt.  Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any Debt, except (i) the prepayment of the Advances in accordance with the terms of this Agreement, (ii) regularly scheduled or required repayments or redemptions of Surviving Debt, (iii) repayment or replacement of the Bridge Facility or then-outstanding Debt Securities with the Debt Securities, (iv) prepayment of the Debt Securities required pursuant to any redemption provisions resulting from the failure of the Asset Transfer to occur by a specified date, (v) repayment or prepayment of intercompany debt permitted to exist under Section 5.02(b)(ii)(A), (C) or (D) and (vi) repayment or prepayment of intercompany debt permitted to exist under Section 5.02(b)(ii)(B) provided that such Debt under this clause (vi) must be expressly subordinated to the prior payment in full in cash of all Obligations under the Loan Documents; or amend, modify or change in any manner any term or condition of any Surviving Debt or the Notes Indenture in any manner materially adverse to the Lenders, or permit any of its Subsidiaries to do any of the foregoing.

(k)Amendment, Etc., of Related Documents.  Cancel or terminate any Related Document or consent to or accept any cancellation or termination thereof (other than in accordance with their terms), amend, modify or change in any manner any term or condition of any Related Document or give any consent, waiver or approval thereunder, waive any default under or any breach of any term or condition of any Related Document, agree in any manner to any other amendment, modification or change of any term or condition of any Related Document or take any other action in connection with any Related Document that would impair the value of the interest or rights of any Loan Party thereunder or that would impair the rights or interests of any Agent or any Lender Party, or permit any of its Subsidiaries to do any of the foregoing.

(l)Negative Pledge.  Enter into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon any of its property or assets except (i) in favor of the Secured Parties; (ii) in connection with any of the Bridge Facility; the Debt Securities; or the Existing Notes (which in each case shall expressly permit Liens granted under the Loan Documents); (iii) any Capitalized Lease permitted by Section 5.02(b)(iii)(C) solely to the extent that such Capitalized Lease prohibits a Lien on the property subject thereto, (iv) restrictions consisting of customary non-assignment provisions that are entered into in the ordinary course of business consistent with prior practice to the extent that such provisions restrict the transfer or assignment of such contract and (v) restrictions under any purchase money financing permitted by Section 5.02(b)(iii)(B) solely to the extent that such purchase money financing prohibits a Lien on the property subject thereto.

(m)Partnerships, Etc.  Become a general partner in any general or limited partnership or joint venture, or permit any of its Subsidiaries to do so, other than (i) to the extent permitted by Section 5.02(f)(vii) and (x), (ii) partnerships or joint ventures where all the partners or members, as applicable, are either Loan Parties or non-Loan Parties but not a combination of both and (iii) WYNCO and the Foshan partnership which is part of the Acquired Business.

(n)Speculative Transactions.  Engage, or permit any of its Subsidiaries to engage, in any transaction involving commodity options or futures contracts or any similar speculative transactions.

(o)Capital Expenditures.  Make, or permit any of its Subsidiaries to make, any Capital Expenditures that would cause the aggregate of all such Capital Expenditures made by any Loan Party or any of its Subsidiaries in any period set forth below to exceed the amount set forth below for such period (it being understood that such amounts set forth below do not include amounts expended for acquisitions permitted under Section 5.02(f)):

	
Fiscal Year Ending In
	
Amount

	
2001
	
$145,000,000

	
2002
	
$130,000,000

	
2003
	
$105,000,000

	
2004
	
$100,000,000

	
2005
	
$100,000,000

	
2006
	
$100,000,000

	
2007
	
$100,000,000

	
2008
	
$100,000,000

provided, however that (A) if, for any Fiscal Year set forth above, the amount specified above for such Fiscal Year exceeds the aggregate amount of Capital Expenditures made by Holdings and its Subsidiaries during such Fiscal Year (the amount of such excess being the "Excess Amount"), Holdings and its Subsidiaries shall be entitled to make additional Capital Expenditures in the immediately succeeding Fiscal Year in an amount (such amount being referred to herein as the "Carryover Amount") equal to the lesser of (i) the Excess Amount and (ii) 25% of the amount specified above for such immediately preceding Fiscal Year and (B) any amounts expended in respect of the acquisition of project registration files or intellectual property made in each case in connection with the PST Project, up to an aggregate amount expended after the Closing Date not in excess of $45,000,000, will not be included in the amounts specified above for such Fiscal Year.

(p)Formation of Subsidiaries.  Organize or invest, or permit any Subsidiary to organize or invest, in any new Subsidiary except as permitted under Section 5.02(f)(i), (vi) and (vii).

(q)Payment Restrictions Affecting Subsidiaries.  Directly or indirectly, enter into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to exist, any agreement or arrangement limiting the ability of any of its Subsidiaries to declare or pay dividends or other distributions in respect of its Equity Interests or repay or prepay any Debt owed to, make loans or advances to, or otherwise transfer assets to or invest in, any Loan Party or any of its Subsidiaries (whether through a covenant restricting dividends, loans, asset transfers or investments, a financial covenant or otherwise), except (i) the Existing Notes, (ii) the Exchange Notes, (iii) the Debt Securities, (iv) the Loan Documents, (v) any agreement or instrument evidencing Surviving Debt, (vi) any agreement in effect at the time such Subsidiary becomes a Subsidiary of a Loan Party, so long as such agreement was not entered into solely in contemplation of such Person becoming a Subsidiary of a Loan Party, (viii) any Capitalized Lease permitted by Section 5.02(b)(iii)(C) solely to the extent that such Capitalized Lease prohibits a Lien on the property subject thereto, (ix) restrictions consisting of customary non-assignment provisions that are entered into in the ordinary course of business consistent with prior practice to the extent that such provisions restrict the transfer or assignment of such contract and (x) restrictions under any purchase money financing permitted by Section 5.02(b)(iii)(B) solely to the extent that such purchase money financing prohibits a Lien on the property subject thereto.

(r)Ownership Change.  Take, or permit any of its Subsidiaries to take, any action that would result in an "ownership change" (as defined in Section 382 of the Internal Revenue Code) with respect to any Loan Party or any of its Subsidiaries except to the extent otherwise permitted under Section 5.02(e) or the application of the "separate return limitation year" or "consolidated return change of ownership" limitations under the Federal income tax consolidated return regulations with respect to any Loan Party or any of its Subsidiaries.

(s)Designation of Senior Debt.  Take, or permit any of its Subsidiaries to take, any action that would or might result in any Debt (other than each Loan Party's obligations under the Loan Documents) becoming "Designated Senior Debt" (or similar term describing Debt under which a default may have the effect of blocking payments in respect of the Debt Securities) as that term may be defined from time to time in the Notes Indenture, and Holdings will not, and will not permit any of its Subsidiaries to, amend, supplement or modify (or agree to amend, supplement or modify) the definition of "Designated Senior Debt" (or similar term, as aforesaid) in the Notes Indenture as in effect from time to time.

(t)Sale and Leaseback Transactions.  Directly or indirectly, enter into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to exist, any agreement or arrangement with any Person whereby it shall sell or transfer any property, real or personal, or mixed, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property for substantially the same purpose or purposes as the property being transferred; provided that any sales of assets which were purchased to accommodate or facilitate a leasing arrangement with respect to such assets shall be permitted so long as the leasing arrangement is commenced within 180 days of the purchase of such assets.

	Reporting Requirements

.  So long as any Advance or any other Payment Obligation of any Loan Party under any Loan Document has not been Fully Paid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, each Loan Party will furnish to the Agents and the Lender Parties:

(a)Default Notice.  As soon as possible and in any event within two Business Days after the occurrence of each Default or any event, development or occurrence reasonably likely to have a Material Adverse Effect continuing on the date of such statement, a statement of such Loan Party executed by a Responsible Officer of that Loan Party setting forth details of such Default and the action that such Loan Party has taken and proposes to take with respect thereto.

(b)Annual Financials.  As soon as available and in any event within 90 days after the end of each Fiscal Year, a copy of the annual audit report for such year for Holdings and its Subsidiaries, including therein a Consolidated and consolidating balance sheet of Holdings and its Subsidiaries as of the end of such Fiscal Year and a Consolidated and consolidating statement of income and a Consolidated and consolidating statement of cash flows of Holdings and its Subsidiaries for such Fiscal Year, in each case accompanied by an opinion acceptable to the Administrative Agent of PricewaterhouseCoopers LLP or other independent public accountants of recognized standing acceptable to the Required Lenders, together with (i) a certificate of such accounting firm to the Lender Parties stating that in the course of the regular audit of the business of Holdings and its Subsidiaries, which audit was conducted by such accounting firm in accordance with generally accepted auditing standards, such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement as to the nature thereof, (ii) a schedule in form reasonably satisfactory to the Administrative Agent of the computations used by such accountants in determining, as of the end of such Fiscal Year, compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements, each Loan Party shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP and (iii) a Compliance Certificate of Holdings executed by a Responsible Officer.

(c)Quarterly Financials.  As soon as available and in any event within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year, a Consolidated and consolidating balance sheet of Holdings and its Subsidiaries as of the end of such quarter and a Consolidated and consolidating statement of income and a Consolidated and consolidating statement of cash flows of Holdings and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter and a Consolidated and consolidating statement of income and a Consolidated and consolidating statement of cash flows of Holdings and its Subsidiaries for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding Fiscal Year, all in reasonable detail and duly certified (subject to the absence of footnotes and normal year-end audit adjustments) on behalf of Holdings by the Chief Financial Officer of Holdings as having been prepared in accordance with generally accepted accounting principles together with (i) a Compliance Certificate of a Responsible Officer and (ii) a schedule in form satisfactory to the Administrative Agent of the computations used by each Loan Party in determining compliance with the covenants contained in Section 5.04, provided that in the event of any change in generally accepted accounting principles used in the preparation of such financial statements from GAAP, Holdings shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP.

(d)Annual Forecasts.  As soon as available and in any event no later than the end of each Fiscal Year, forecasts prepared by management of Holdings, in form satisfactory to the Administrative Agent, of Consolidated balance sheets, income statements and cash flow statements of Holdings and its Subsidiaries on a quarterly basis for the Fiscal Year following such Fiscal Year and on an annual basis for each of three Fiscal Years thereafter.

(e)Litigation.  Promptly after the commencement thereof, notice of all actions, suits, investigations, litigation and proceedings before any Governmental Authority or arbitrator, affecting any Loan Party or any of its Subsidiaries of the type described in Section 4.01(f), and promptly after the occurrence thereof, notice of any material adverse change in the status or the financial effect on any Loan Party or any of its Subsidiaries of the Disclosed Litigation from that described on Schedule 4.01(f) hereto.

(f)Securities Reports.  Promptly after the sending or filing thereof, copies of all proxy statements, financial statements and reports that any Loan Party or any of its Subsidiaries sends to its stockholders, and copies of all regular, periodic and special reports, and all registration statements, that any Loan Party or any of its Subsidiaries files with the Securities and Exchange Commission or any governmental authority that may be substituted therefor, or with any national securities exchange.

(g)Creditor Reports.  Promptly after the furnishing thereof, copies of any statement or report furnished to any holder of Debt securities of any Loan Party or of any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lender Parties pursuant to any other clause of this Section 5.03.

(h)Agreement Notices.  Promptly upon receipt thereof, copies of all notices, requests and other documents received by any Loan Party or any of its Subsidiaries under or pursuant to any Related Document or indenture, loan or credit or similar agreement regarding or related to any breach or default by any party thereto or any other event that could materially impair the value of the interests or the rights of any Loan Party or otherwise have a Material Adverse Effect, and promptly upon execution thereof, notice of any amendment, modification or waiver of any provision of any Related Document or indenture, loan or credit or similar agreement and, upon request by the Administrative Agent, copies of any such amendment, modification or waiver, and from time to time such other information and reports regarding the Related Documents and indentures and loan and credit and similar agreements as the Administrative Agent may reasonably request.

(i)Revenue Agent Reports.  Within 10 days after receipt, copies of all Revenue Agent Reports (Internal Revenue Service Form 886), or other written proposals of the Internal Revenue Service, that propose, determine or otherwise set forth positive adjustments to the Federal income tax liability of the affiliated group (within the meaning of Section 1504(a)(1) of the Internal Revenue Code) of which any Loan Party is a member aggregating $1,000,000 or more.

(j)Tax Certificates.  Promptly, and in any event within five Business Days after the due date (with extensions) for filing the final Federal income tax return in respect of each taxable year, a certificate (a "Tax Certificate"), signed by a Responsible Officer of Holdings, stating that the common parent of the affiliated group (within the meaning of Section 1504(a)(1) of the Internal Revenue Code) of which Holdings is a member has paid to the Internal Revenue Service or other taxing authority, the full amount that Holdings has determined in good faith such affiliated group is required to pay in respect of Federal income tax for such year and that Holdings has received any amounts payable to them, and have not paid amounts in respect of taxes (Federal, state, local or foreign) in excess of the amount that Holdings has determined in good faith they are required to pay, under the Tax Agreement in respect of such taxable year.

(k)ERISA.  (i)  ERISA Events and ERISA Reports.  (A) Promptly and in any event within 10 Business Days after any Loan Party knows or has reason to know that any ERISA Event has occurred, a statement of the Chief Financial Officer of Holdings describing such ERISA Event and the action, if any, that such Loan Party has taken and proposes to take with respect thereto and (B) on the date any records, documents or other information must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of such records, documents and information.

(ii)Plan Terminations.  Promptly and in any event within 10 Business Days after receipt thereof by any Loan Party, copies of each notice from the PBGC stating its intention to terminate any Plan or to have a trustee appointed to administer any Plan.

(iii)Plan Annual Reports.  Promptly and in any event within 10 Business Days after the filing thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each Plan.

(iv)Multiemployer Plan Notices.  Promptly and in any event within 10 Business Days after receipt thereof by any Loan Party or any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each notice concerning (A) the imposition of Withdrawal Liability by any such Multiemployer Plan, (B) the reorganization or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the amount of liability incurred, or that may be incurred, by such Loan Party or any ERISA Affiliate in connection with any event described in clause (A) or (B).

(l)Environmental Conditions.  Promptly after the occurrence (of which Holdings or any of its Subsidiaries had knowledge of, or should have had knowledge of) or assertion thereof, notice of any Environmental Action against or of any noncompliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that could (i) reasonably be expected to have a Material Adverse Effect or (ii) cause any property described in the Mortgages to be subject to any material restrictions on ownership, occupancy, use or transferability under any Environmental Law.

(m)Real Property.  As soon as available and in any event within 60 days after the end of each Fiscal Year, a report supplementing Schedules 4.01(w) and 4.01(x) hereto, including an identification of all owned and leased real property disposed of by any Loan Party or any of its Subsidiaries during such Fiscal Year, a list and description (including the street address, county or other relevant jurisdiction, state, record owner, book value thereof and, in the case of leases of property, lessor, lessee, expiration date and annual rental cost thereof) of all real property acquired or leased during such Fiscal Year and a description of such other changes in the information included in such Schedules as may be necessary for such Schedules to be accurate and complete.

(n)Insurance.  As soon as available and in any event within 60 days after the end of each Fiscal Year, a report summarizing the insurance coverage (specifying type, amount and carrier) in effect for each Loan Party and its Subsidiaries and containing such additional information as any Agent, or any Lender Party through the Administrative Agent, may reasonably specify.

(o)Certain Events.  As soon as available and in any event (A) within 5 Business Days after the industrial revenue bonds issued with respect to the respective properties located in Baltimore, Maryland and Lincolnton, North Carolina have been paid in full and (B) within 5 Business Days after normal business operations have resumed at the plant owned by Alpharma Animal Health Company located in Lowell, Arkansas.

(p)Other  Information.  Such other information respecting the business, condition (financial or otherwise), operations, performance, properties or prospects of any Loan Party or any of its Subsidiaries as any Agent, or any Lender Party through the Administrative Agent, may from time to time reasonably request.

	Financial Covenants

.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document has not been Fully Paid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, Holdings and its Subsidiaries will:
(a)Total Leverage Ratio.  Maintain at the end of each Fiscal Quarter of Holdings a Total Leverage Ratio of not more than the amount set forth below for each period set forth below:

	
Measurement Period 
	
Ratio

	
December 31, 2001 to September 30, 2002

December 31, 2002 to September 30, 2003

December 31, 2003 to September 30, 2004

December 31, 2004 and thereafter 
	
5.25:1.0

4.50:1.0

3.75:1.0

3.50:1.0

(b)Senior Leverage Ratio.  Maintain at the end of each Fiscal Quarter of Holdings a Senior Leverage Ratio of not more than the amount set forth below for each period set forth below:

	
Measurement Period 
	
Ratio

	
December 31, 2001 to September 30, 2002

December 31, 2002 to September 30, 2003

December 31, 2003 to September 30, 2004 

December 31, 2004 and thereafter
	
3.25:1.0

2.75:1.0

2.25:1.0

2.00:1.0

(c)Fixed Charge Coverage Ratio.  Maintain at the end of each Fiscal Quarter of Holdings (commencing December 31, 2001) a Fixed Charge Coverage Ratio of not less than 1.75:1.0. 

(d)Interest Coverage Ratio.  Maintain at the end of each Fiscal Quarter of Holdings an Interest Coverage Ratio of not less than the amount set forth below for each Measurement Period set forth below:

	
Measurement Period 
	
Ratio

	
December 31, 2001 to September 30, 2002

December 31, 2002 to September 30, 2003

December 31, 2003 and thereafter 
	
2.50:1.0

3.00:1.0

3.50:1.0

(e)Net Worth.  Maintain at the end of each Fiscal Quarter of Holdings (commencing December 31, 2001) an excess of Consolidated total assets over Consolidated total liabilities, in each case, of Holdings and its Subsidiaries of not less than the amount equal to the sum of (i) 80% of Consolidated net worth of Holdings and its Subsidiaries as of the Closing Date (as determined by the Administrative Agent in accordance with GAAP on the basis of the financial statements then available to it) plus (ii) 80% of Consolidated Net Income (with no deductions for net losses) since the Closing Date plus (iii) the fair market value (as determined as of the date of such sale or issuance) of all Equity Interests issued or sold by Holdings after the Closing Date.

	

EVENTS OF DEFAULT

	Events of Default

.  If any of the following events ("Events of Default") shall occur and be continuing:

(a)(i) any Borrower shall fail to pay any principal of any Advance when the same shall become due and payable, whether by scheduled maturity or at a date fixed for prepayment or by acceleration, demand or otherwise, or (ii) any Borrower shall fail to pay any interest on any Advance or any fee owing under or in respect of this Agreement, or any Loan Party shall fail to make any other payment under or in respect of any Loan Document, whether by scheduled maturity or at a date fixed for payment or prepayment or by acceleration, demand or otherwise, in each case under this clause (ii) within 3 Business Days after the same becomes due and payable; or

(b)any representation or warranty made by any Loan Party (or any of its officers) under or in connection with any Loan Document shall prove to have been incorrect in any material respect when made or deemed made; or

(c)(i) any Loan Party shall fail to perform or observe any term, covenant or agreement contained in Section 2.14, 5.01(e), 5.01(f), 5.01(p), 5.01(q), 5.01(r), 5.02, 5.03 or 5.04, (ii) any of the Guarantors shall fail to perform or observe any term, covenant or agreement contained in Section 1 of the Guaranties or (iii) any of the Loan Parties shall fail to perform or observe any term, covenant or agreement contained in Section 6 of the Security Agreement; or

(d)any Loan Party shall fail to perform or observe any term, covenant or agreement contained in any of the Loan Documents on its part to be performed or observed that is not otherwise referred to in this Section 6.01 if such failure shall remain unremedied for at least 30 days after the earlier of the date on which (i) a Responsible Officer of any of the Loan Parties first becomes aware of such failure and (ii) written notice thereof shall have been given to Holdings by the Administrative Agent or any of the Lenders Parties; or

(e)(i) any Loan Party or any of its Subsidiaries shall fail to pay any principal of, premium or interest on, or any other amount payable in respect of, one or more items of Debt of the Loan Parties and their Subsidiaries (excluding Debt outstanding hereunder) that is outstanding in an aggregate principal amount (or, in the case of any Hedge Agreement, that has an Agreement Value) of at least $5,000,000 when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreements or instruments relating to all such Debt; or (ii) any other event shall occur or condition shall exist under the agreements or instruments relating to one or more items of Debt of the Loan Parties and their Subsidiaries (excluding Debt outstanding hereunder) that is outstanding (or under which one or more Persons have a commitment to extend credit) in an aggregate principal amount (or, in the case of any Hedge Agreement, that has an Agreement Value) of at least $5,000,000, and such other event or condition shall continue after the applicable grace period, if any, specified in all such agreements or instruments, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt or otherwise to cause, or to permit the holder thereof to cause, such Debt to mature; or (iii) one or more items of Debt of the Loan Parties and their Subsidiaries (excluding Debt outstanding hereunder) that is outstanding (or under which one or more Persons have a commitment to extend credit) in an aggregate principal amount (or, in the case of any Hedge Agreement, that has an Agreement Value) of at least $5,000,000 shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled or required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or

(f)any Loan Party or any of its Subsidiaries (other than Immaterial Subsidiaries) shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Loan Party or any of its Subsidiaries (other than Immaterial Subsidiaries) seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it) that is being diligently contested by it in good faith, either such proceeding shall remain undismissed or unstayed for a period of at least 60 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or any substantial part of its property) shall occur; or any event or action analogous to or having a substantially similar effect to any of the events or actions set forth above in this Section 6.01(f) (other than a solvent reorganization) shall occur under the Requirements of Law of any jurisdiction applicable to any Loan Party or any of such Subsidiaries; or any Loan Party or any of such Subsidiaries shall take any corporate, partnership, limited liability company or other similar action to authorize any of the actions set forth above in this Section 6.01(f); or

(g)one or more judgments or orders for the payment of money in excess of $5,000,000 in the aggregate shall be rendered against one or more of the Loan Parties and their Subsidiaries and shall remain unsatisfied and either (i) enforcement proceedings shall have been commenced by any creditor upon any such judgment or order or (ii) there shall be any period of at least 30 days during which a stay of enforcement of any such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; provided, however, that any such judgment or order shall not give rise to an Event of Default under this Section 6.01(g) if and for so long as (A) the amount of such judgment or order is covered by a valid and binding policy of insurance between the defendant and the insurer, which shall be rated at least "A" by A.M. Best Company (or, with respect to insurance provided by non-U.S. insurers, having a comparable credit rating, as determined by the Administrative Agent), covering full payment thereof and (B) such insurer has been notified, and has not disputed (which term shall not include such insurer's standard reservation of rights provision) the claim made for payment, of the amount of such judgment or order; or

(h)one or more nonmonetary judgments or orders (including, without limitation, writs or warrants of attachment, garnishment, execution, distraint or similar process) shall be rendered against any Loan Party or any of its Subsidiaries that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, and there shall be any period of at least 30 days during which a stay of enforcement of any such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(i)any provision of any Loan Document after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason (other than pursuant to the terms thereof) cease to be valid and binding on or enforceable against any Loan Party intended to be a party thereto, or any such Loan Party shall so state in writing; or

(j)any Collateral Document after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority lien on and security interest in the Collateral purported to be covered thereby (subject to the liens permitted by Section 5.02(a)); or

(k)any ERISA Event shall have occurred with respect to a Plan and the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to which an ERISA Event shall have occurred and then exist (or the liability of the Loan Parties and the ERISA Affiliates related to such ERISA Event) exceeds $5,000,000; or

(l)any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined as of the date of such notification), exceeds $5,000,000 or requires payments exceeding $1,000,000 per annum; or

(m)any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, and as a result of such reorganization or termination the aggregate annual contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years of such Multiemployer Plans immediately preceding the plan year in which such reorganization or termination occurs by an amount exceeding $5,000,000; or

(n)a Change of Control shall occur; or

(o)if on or prior to the date that the Asset Transfer has occurred (and the Debt Securities have not been issued and sold by such date), the Bridge Facility (and all related documents) has not been executed and delivered by the Company and the Loan Parties party thereto;

then, and in any such event, the Administrative Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to Holdings, declare the Commitments of each Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by the Issuing Bank or a Lender pursuant to Section 2.03(c) and Swing Line Advances by a Lender pursuant to Section 2.02(b)) and of the Issuing Bank to issue Letters of Credit to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, (A) by notice to Holdings, declare the Notes, all interest thereon and all other amounts payable under this Agreement and the other Loan Documents to be forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party and (B) by notice to each party required under the terms of any agreement in support of which a Standby Letter of Credit is issued, request that all Obligations under such agreement be declared to be due and payable; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to any Guarantor or any Borrower under the Federal Bankruptcy Code, (1)  the Commitments of each Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by the Issuing Bank or a Lender pursuant to Section 2.03(c) and Swing Line Advances by a Lender pursuant to Section 2.02(b)) and of the Issuing Bank to issue Letters of Credit shall automatically be terminated and (2) the Notes, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by each Borrower.

	Actions in Respect of the Letters of Credit upon Default

.  If any Event of Default shall have occurred and be continuing, the Administrative Agent may, or shall at the request of the Required Lenders, irrespective of whether it is taking any of the actions described in Section 6.01 or otherwise, make demand upon the Company to, and forthwith upon such demand the Company will, pay to the Administrative Agent on behalf of the Lender Parties in same day funds at the Administrative Agent's office designated in such demand, for deposit in the L/C Cash Collateral Account, an amount equal to the aggregate Available Amount of all Letters of Credit then outstanding.  If at any time the Administrative Agent reasonably determines that any funds held in the L/C Cash Collateral Account are subject to any right or claim of any Person other than the Administrative Agent and the Secured Parties or that the total amount of such funds is less than the aggregate Available Amount of all Letters of Credit, the Company will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited and held in the L/C Cash Collateral Account, an amount equal to the excess of (a) such aggregate Available Amount over (b) the total amount of funds, if any, then held in the L/C Cash Collateral Account that the Administrative Agent reasonably determines to be free and clear of any such right and claim.  Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account, such funds shall be applied, to the extent permitted under applicable law, to reimburse the Issuing Bank or the Lenders, as applicable.

	

THE AGENTS

	Appointment, Powers and Immunity

.  (a)  Each Lender Party (in its capacity as a Lender, the Swing Line Bank (if applicable), the Issuing Bank (if applicable) and on behalf of itself and its Affiliates as potential Hedge Banks) hereby appoints and authorizes the Administrative Agent to act as its agent under this Agreement and the other Loan Documents with such powers and discretion as are specifically delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto, including, without limitation, the power to approve a Designated Capital Markets Transaction, subject to and in accordance with clause (d) below.  The Administrative Agent (which term as used in this sentence and in Section 7.05(a) and the first sentence of Section 7.06 shall include its affiliates and its own and its affiliates' officers, directors, employees, and agents):  (i) shall not have any duties or responsibilities except those expressly set forth in this Agreement and shall not be a trustee or fiduciary for any Lender Party; (ii) shall not be responsible to the Lender Parties for any recital, statement, representation, or warranty (whether written or oral) made in or in connection with any Loan Document or any certificate or other document referred to or provided for in, or received by any of them under, any Loan Document, or for the value, validity, effectiveness, genuineness, enforceability, or sufficiency of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document, or any other document referred to or provided for therein or for any failure by any Loan Party or any other Person to perform any of its obligations thereunder; (iii) shall not be responsible for or have any duty to ascertain, inquire into, or verify the performance or observance of any covenants or agreements by any Loan Party or the satisfaction of any condition or to inspect the property (including the books and records) of any Loan Party or any of its Subsidiaries or Affiliates; (iv) shall not be required to initiate or conduct any litigation or collection proceedings under any Loan Document; and (v) shall not be responsible for any action taken or omitted to be taken by it or any of its directors, officers, agents or employees under or in connection with any Loan Document, except for its or their own gross negligence or willful misconduct.

(b)The Administrative Agent shall also act as the "collateral agent" under the Loan Documents, and each of the Lender Parties (in its capacities as a Lender, the Swing Line Bank (if applicable), the Issuing Bank (if applicable) and a potential Hedge Bank) hereby appoints and authorizes the Administrative Agent to act as the agent of such Lender Party for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto.  For the purposes of holding or enforcing Collateral located in a jurisdiction other than the United States, the Administrative Agent may from time to time in its discretion appoint any of the other Lender Parties or any of the affiliates of a Lender Party to act as its co-agent or sub-agent or its attorney-in-fact for any purpose, including for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents or of exercising any rights and remedies thereunder at the direction of the Administrative Agent, and the Administrative Agent shall not be responsible for the negligence or misconduct of any such co-agents, sub-agents or attorneys-in-fact selected by it with reasonable care.  In this connection, the Administrative Agent, as "collateral agent", and such co-agents, sub-agents and attorneys-in-fact shall be entitled to the benefits of all provisions of this Article VII (including, without limitation, Section 7.05, as though such co-agents, sub-agents and attorneys-in-fact were the "collateral agent" under the Loan Documents) as if set forth in full herein with respect thereto.

(c)Neither the Lead Arranger, the Syndication Agent nor the Co-Documentation Agents shall have any powers or discretion under this Agreement or any of the other Loan Documents other than those bestowed upon it as a co-agent or sub-agent from time to time by the Administrative Agent pursuant to subsection (b) of this Section 7.01, and each of the Lender Parties hereby acknowledges that (i) it has not relied on the Lead Arranger, the Syndication Agent or the Co-Documentation Agents in deciding whether to enter into this Agreement or in taking or not taking any action under the Agreement and (ii) neither the Lead Arranger, the Syndication Agent nor the Co-Documentation Agents shall have any liability under this Agreement or any of the other Loan Documents.

(d)A Designated Capital Markets Transaction may be approved by the Administrative Agent. Such approval will be given with respect to a Designated Capital Markets Transaction which meets the Specified Parameters, unless the Administrative Agent  determines in its discretion that any such Debt could reasonably be expected to have a Material Adverse Effect.  If the Administrative Agent  makes such a determination, or in the case where a proposed Designated Capital Markets Transaction does not otherwise, in the judgment of the Administrative Agent, meet the Specified Parameters, the Administrative Agent will deliver all material documentation with respect to such proposed facility to all of the Lender Parties, and such proposed new facility will in such case be subject to approval of the Required Lenders.  

	Reliance by Agent

.  The Administrative Agent shall be entitled to rely upon any certification, notice, instrument, writing, or other communication (including, without limitation, any thereof by telephone or telecopy) believed by it to be genuine and correct and to have been signed, sent or made by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel (including counsel for any Loan Party), independent accountants, and other experts selected by the Administrative Agent.  The Administrative Agent may deem and treat the payee of any Note as the holder thereof for all purposes hereof unless and until the Administrative Agent receives and accepts an Assignment and Acceptance executed in accordance with Section 8.07.  As to any matters not expressly provided for by this Agreement, the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding on all of the Lender Parties; provided, however, that the Administrative Agent shall not be required to take any action that exposes the Administrative Agent to personal liability or that is contrary to any Loan Document or applicable Requirements of Law or unless it shall first be indemnified to its satisfaction by the Lender Parties against any and all liability and expense which may be incurred by it by reason of taking any such action.

	Defaults

.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of a Default or Event of Default unless the Administrative Agent has received written notice from a Lender Party or a Borrower specifying such Default or Event of Default and stating that such notice is a "Notice of Default".  In the event that the Administrative Agent receives such a notice of the occurrence of a Default or Event of Default, the Administrative Agent shall give prompt notice thereof to the Lender Parties.  The Administrative Agent shall (subject to Section 7.02) take such action with respect to such Default or Event of Default as shall reasonably be directed by the Required Lenders; 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 interest of the Lender Parties.

	Bank of America, BAS, Fleet, DnB, UBN and Affiliates

.  With respect to its Commitments, the Advances made by it and the Note or Notes issued to it, each of Bank of America (and any successor acting as the Administrative Agent), Fleet, DnB and UBN in its capacity as a Lender Party hereunder shall have the same rights and powers under the Loan Documents as any other Lender Party and may exercise the same as though it were not acting as the Administrative Agent or an Issuing Bank (with respect to Bank of America), the Syndication Agent (with respect to Fleet) or Co-Documentation Agents (with respect to DnB and UBN); and the term "Lender Party" or "Lender Parties" shall, unless otherwise expressly indicated, include each of Bank of America, Fleet, DnB and UBN in its individual capacity.  Bank of America (and any successor acting as the Administrative Agent), BAS,  Fleet, DnB and UBN and their respective affiliates may (without having to account therefor to any Lender Party) accept deposits from, lend money to, make investments in, provide services to, and generally engage in any kind of lending, trust, or other business with any Loan Party or any of its Subsidiaries or Affiliates as if it were not acting as an Agent or an Issuing Bank, and Bank of America (and any successor acting as the Administrative Agent), BAS, Fleet, DnB and UBN and their respective affiliates may accept fees and other consideration from any Loan Party or any of its Subsidiaries or Affiliates, or any Person that may do business with or own securities of any Loan Party or any such Subsidiary or Affiliate, for services in connection with this Agreement or otherwise without having to account for the same to the Lender Parties.  Neither Bank of America (and any successor acting as the Administrative Agent), Fleet, DnB nor UBN shall have any duty to disclose any information obtained or received by it or any of its Affiliates relating to Holdings or any of its Subsidiaries to the extent such information was obtained or received in any capacity other than as an Agent.

	Indemnification

.  (a)  The Lenders severally agree to indemnify each Agent and each of their affiliates and their respective officers, directors, employees, agents, advisors and trustees (each, an "Indemnified Party") (to the extent not promptly reimbursed under Section 8.04, but without limiting the obligations of any Loan Party under such Section) in accordance with each such Lender's Pro-Rata Share, for any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) any Loan Document or the transactions contemplated thereby or any action taken or omitted by any Indemnified Party under any Loan Document (collectively, the "Indemnified Costs"); provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the Person to be indemnified.  In the case of any claim, investigation, litigation or proceeding for which indemnity under this Section 7.05(a) applies, such indemnity shall apply whether or not such claim, investigation, litigation or proceeding is brought by any Indemnified Party, any of the Lender Parties or a third party.  Without limitation of the foregoing, each Lender severally agrees to reimburse each Indemnified Party promptly upon demand for its Pro Rata Share of any costs or expenses payable by any Loan Party under Section 8.04, to the extent that such  Indemnified Party is not promptly reimbursed for such costs and expenses (including, without limitation, fees and expenses of counsel) by that Loan Party.  In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05 applies whether any such investigation, litigation or proceeding is brought by any Lender Party or any other Person.  The failure of any Lender Party to reimburse any Indemnified Party promptly upon demand for its Pro Rata Share of any amount required to be paid by the Lender Party to such Indemnified Party as provided herein shall not relieve any other Lender Party of its obligation hereunder to reimburse such Indemnified Party for its Pro Rata Share of such amount, but no Lender Party shall be responsible for the failure of any other Lender Party to reimburse any Indemnified Party for such other Lender Party's Pro Rata Share of such amount.  Without prejudice to the survival of any other agreement of any Lender Party hereunder, the agreement and obligations of each Lender contained in this Section 7.05(a) shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the other Loan Documents.

(b)The Lenders having a Revolving Credit Commitment severally agree to indemnify the Issuing Bank (to the extent not promptly reimbursed under Section 8.04, but without limiting the obligations of any Loan Party under such Section) for such Lender's Pro Rata Share of any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against the Issuing Bank, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) any Loan Document; provided, however, that no such Lender shall be liable for any portion of such claims, damages, losses, liabilities and expenses resulting from the Issuing Bank's gross negligence or willful misconduct.  In the case of any claim, investigation, litigation or proceeding for which indemnity under this Section 7.05(b) applies, such indemnity shall apply whether or not such claim, investigation, litigation or proceeding is brought by the Issuing Bank, any of the other Lender Parties or a third party.  Without limitation of the foregoing, each Lender having a Revolving Credit Commitment severally agrees to reimburse the Issuing Bank promptly upon demand for its Pro Rata Share of any costs and expenses (including, without limitation, fees and expenses of counsel) payable by any Loan Party under Section 8.04, to the extent that the Issuing Bank is not promptly reimbursed for such costs and expenses by such Loan Party.  The failure of any Lender having a Revolving Credit Commitment to reimburse the Issuing Bank promptly upon demand for its Pro Rata Share of any amount required to be paid by the Lenders having a Revolving Credit Commitment to the Issuing Bank as provided herein shall not relieve any other such Lender of its obligation hereunder to reimburse the Issuing Bank for its Pro Rata Share of such amount, but no such Lender shall be responsible for the failure of any other Lender to reimburse the Issuing Bank for such other Lender's Pro Rata Share of such amount.  Without prejudice to the survival of any other agreement of any Lender hereunder, the agreement and obligations of each Lender contained in this Section 7.05(b) shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the other Loan Documents.

	Non-Reliance on Agent and Other Lender Parties

.  Each Lender Party agrees that it has, independently and without reliance on any Agent or any other Lender Party, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Loan Parties and their Subsidiaries and decision to enter into this Agreement and that it will, independently and without reliance upon any Agent or any other Lender Party, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under the Loan Documents.  Except for notices, reports, and other documents and information expressly required to be furnished to the Lender Parties by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender Party with any credit or other information concerning the affairs, financial condition, or business of any Loan Party or any of its Subsidiaries or Affiliates that may come into the possession of the Administrative Agent or any of its affiliates.

	Resignation of Administrative Agent

.  The Administrative Agent may resign at any time by giving notice thereof to the Lender Parties and Holdings.  Upon any such resignation, the Required Lenders shall have the right (with, so long as no Default has occurred and is continuing, the prior consent of Holdings, such consent not to be unreasonably withheld or delayed) to appoint a successor Administrative Agent.  If no successor Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent's giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lender Parties (with, so long as no Default has occurred and is continuing, the prior consent of Holdings, such consent not to be unreasonably withheld or delayed), appoint a successor Administrative Agent which shall be a commercial bank organized under the laws of the United States of America or of any state thereof and having combined capital and surplus of at least $100,000,000.  If within 45 days after written notice is given of the retiring Administrative Agent's resignation under this Section 7.07 no successor Administrative Agent shall have been appointed and shall have accepted such appointment, then on such 45th day (a) the retiring Administrative Agent's resignation shall become effective, (b) the retiring Administrative Agent shall thereupon be discharged from its duties and obligations under the Loan Documents and (c) the Required Lenders shall thereafter perform all duties and obligations of the retiring Administrative Agent under the Loan Documents until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above in this Section 7.07.  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor and upon the execution and filing or recording of such financing statements, or amendments thereto, and such amendments or supplements to the Mortgages, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to continue the perfection of the Liens granted or purported to be granted by the Collateral Documents, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges, and duties of the retiring Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan Documents.  After any retiring Agent's  resignation hereunder as Administrative Agent, the provisions of this Article VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

	

MISCELLANEOUS

	Amendments, Etc

.  No amendment or waiver of any provision of this Agreement, the Notes or any other Loan Document, nor consent to any departure by any of the Loan Parties therefrom, shall in any event be effective unless the same shall be in writing and signed (or, in the case of the Collateral Documents, consented to) by the Required Lenders (and, to the extent that any of the rights or obligations of any of the Loan Parties is being changed, Holdings), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all of the Lender Parties (other than any Lender Party that is, at such time, a Defaulting Lender, and, to the extent that any of the rights or obligations of any of the Loan Parties is being changed, Holdings), do any of the following at any time:  (i) waive any of the conditions specified in Section 3.01 or, in the case of the Initial Extension of Credit, Section 3.02; (ii) change the number of Lenders or the percentage of the Commitments or the aggregate outstanding principal amount of Advances or the aggregate Available Amount of outstanding Letters of Credit that, in each case, shall be required for the Lender Parties or any of them to take any action hereunder or thereunder; (iii) release all or substantially all of the value of the guarantees of the Guarantors under the Guaranties; (iv) release all or substantially all of the Collateral in any transaction or series of related transactions; (v) amend Section 2.13 or this Section 8.01; (vi) increase the Commitments or the Pro Rata Shares of the Lenders (other than the Incremental Commitments); (vii) reduce the principal of, or stated rate of interest on, the Notes or any fees or other amounts stated to be payable hereunder; or (viii) postpone any date scheduled for any payment of principal of, or interest on, the Notes pursuant to Section 2.04 or 2.07 (including the Conversion Date, if applicable) or any date fixed for any payment of fees hereunder or any Guaranteed Obligations payable under the Guaranties; provided, further, that no amendment, waiver or consent shall, unless in writing and signed by the Requisite Class Lenders of each affected Facility (and, to the extent that any of the rights or obligations of any of the Loan Parties is being changed, Holdings), change the order of application of any reduction in Commitments or any prepayment of Advances from that set forth in the applicable provisions of Sections 2.05 and 2.06, as applicable; provided further that no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Bank or the Issuing Bank, as the case may be, in addition to the Lenders required above to take such action, and Holdings, affect the rights or obligations of the Swing Line Bank or of the Issuing Bank, as the case may be, under this Agreement; and provided further that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above to take such action (and, to the extent that any of the rights or obligations of any of the Loan Parties is being changed, Holdings), affect the rights or duties of the Administrative Agent under this Agreement and the other Loan Documents.  Notwithstanding any of the foregoing provisions of this Section 8.01, none of the defined terms set forth in Section 1.01 shall be amended, supplemented or otherwise modified in any manner that would change the meaning, purpose or effect of this Section 8.01 or any section referred to herein unless such amendment, supplement or modification is agreed to in writing by the number and percentage of Lenders (and the Swing Line Bank, the Issuing Bank and the Administrative Agent, if applicable) otherwise required to amend such section under the terms of this Section 8.01.

	Notices, Etc

.  All notices and other communications provided for hereunder shall be in writing (including telecopy communication) and mailed, telecopied, or delivered, if to any Borrower, at the address at c/o Alpharma Inc., One Executive Drive, Fort Lee, New Jersey, 07024, Attention: Chief Financial Officer, with a copy to each of the Treasurer and the Chief Legal Officer; if to any Initial Lender, the Swing Line Bank or the Initial Issuing Bank, at its Base Rate Lending Office specified opposite its name on Schedule I hereto; if to any other Lender Party, at its Base Rate Lending Office specified in the Assignment and Acceptance pursuant to which it became a Lender Party; and if to the Administrative Agent or Collateral Agent, with respect to (i) financial statements, compliance certificates, any notices with respect to Collateral, and notices other than borrowing repayments to: Bank of America, N.A., 1455 Market Street, 5th Floor, CA5-704-05-19, San Francisco, California 94801, Attn: Aamir Saleem, Telephone: 415-436-2769; Telecopy: 415-503-5089; and (ii) borrowing notices, repayments and other operational matters to: Bank of America, N.A., Independence Center, 15th Floor, NC1-001-15-04, 101 North Tryon Street, Charlotte, North Carolina 28255, Attn: Elizabeth Garver, Telephone: 704-386-8451; Telecopy: 704-409-0004; or, as to any party, at such other address as shall be designated by such party in a written notice to the other parties.  All such notices and other communications shall, when mailed or telecopied or be effective when deposited in the mails or transmitted by telecopier, respectively, except that notices and communications to any Agent pursuant to Article II, III or VII shall not be effective until received by such Agent.  Delivery by telecopier of an executed counterpart of a signature page to any amendment or waiver of any provision of this Agreement or the Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of an original executed counterpart thereof.

	No Waiver; Remedies

.  No failure on the part of any Lender Party or any Agent to exercise, and no delay in exercising, any right hereunder or under any Note or any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

	Costs and Expenses

.  (a)  Each Loan Party agrees, jointly and severally, to pay on demand (i) all reasonable costs and expenses of each Agent in connection with the syndication, preparation, execution, delivery, administration, modification and amendment of, or any consent or waiver under, the Loan Documents and the other documents to be delivered thereunder (including, without limitation, (A) all due diligence, collateral review, syndication, transportation, computer, duplication, appraisal, audit, insurance, consultant, search, filing and recording fees and expenses and (B) the reasonable fees and expenses of external counsel for each Agent with respect thereto, with respect to advising such Agent as to its rights and responsibilities, or the perfection, protection or preservation of rights or interests, under the Loan Documents, with respect to negotiations with any Loan Party or with other creditors of any Loan Party or any of its Subsidiaries arising out of any Default or any events or circumstances that may give rise to a Default and with respect to presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors' rights generally and any proceeding ancillary thereto) and (ii) all costs and expenses of each Agent and each Lender Party in connection with the enforcement of and preservation of rights under the Loan Documents and the other documents to be delivered thereunder, whether in any action, suit or litigation, or any bankruptcy, insolvency or other similar proceeding affecting creditors' rights generally, or any consensual "workout", restructuring or similar arrangement (including, without limitation, the reasonable fees and expenses of counsel (including the cost of internal counsel) for the Administrative Agent and each Lender Party with respect thereto).

(b)Each Loan Party agrees, jointly and severally, to indemnify, defend and save and hold harmless each Agent, each Lender Party and each of their affiliates and their respective officers, directors, employees, agents, advisors and trustees (each, an "Indemnified Party") from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (i) the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit, the Loan Documents, the Related Documents or any of the transactions contemplated thereby, including, without limitation, any acquisition or proposed acquisition (including, without limitation, the Transaction) by Holdings or the Company or (ii) the actual or alleged presence of Hazardous Materials on any property of any Loan Party or any of its Subsidiaries or any Environmental Action relating in any way to any Loan Party or any of its Subsidiaries, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct.  In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 8.04(b) applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, shareholders or creditors or an Indemnified Party or any other Person, whether or not any Indemnified Party is otherwise a party thereto and whether or not the Transaction is consummated.  Each Loan Party also agrees not to assert any claim against any Agent, any Lender Party or any of their Affiliates, or any of their respective officers, directors, employees, agents and advisors, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit, the Loan Documents, the Related Documents or any of the transactions contemplated thereby.

(c)If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by any Borrower to or for the account of a Lender Party other than on the last day of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or 2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or for any other reason, or by an Eligible Assignee to a Lender Party other than on the last day of the Interest Period for such Advance upon an assignment of rights and obligations under this Agreement pursuant to Section 8.07 as a result of a demand by the Company pursuant to Section 8.07(a), or if any Borrower fails to make any payment or prepayment of an Advance for which a notice of prepayment has been given or that is otherwise required to be made, whether pursuant to Section 2.04, 2.06 or 6.01 or otherwise, such Borrower shall, upon demand by such Lender Party (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender Party any amounts required to compensate such Lender Party for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion or such failure to pay or prepay, as the case may be, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender Party to fund or maintain such Advance.

(d)If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it under any Loan Document, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of such Loan Party by the Administrative Agent or any Lender Party, in its sole discretion.

(e)Without prejudice to the survival of any other agreement of any Loan Party hereunder or under any other Loan Document, the agreements and obligations of each Borrower contained in Sections 2.10 and 2.12 and this Section 8.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under any of the other Loan Documents.

	Right of Set-off

.  Upon the occurrence and during the continuance of any Event of Default, each Agent and each Lender Party and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and otherwise apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Agent, such Lender Party or such Affiliate to or for the credit or the account of any Borrower against any and all of the Obligations of any Borrower now or hereafter existing under the Loan Documents, irrespective of whether such Agent or such Lender Party shall have made any demand under this Agreement or such Note or Notes and although such Obligations may be unmatured.  Each Agent and each Lender Party agrees promptly to notify any affected Borrower after any such setoff and application; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application.  The rights of each Agent and each Lender Party and their respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of setoff) that such Agent, such Lender Party and their respective Affiliates may have.

	Binding Effect

.  This Agreement shall become effective when it shall have been executed by each Borrower and each Agent and the Administrative Agent shall have been notified by each Initial Lender, the Swing Line Bank and the Initial Issuing Bank that such Initial Lender, the Swing Line Bank or the Initial Issuing Bank has executed it and thereafter shall be binding upon and inure to the benefit of each Borrower, each Agent and each Lender Party and their respective successors and assigns, except that no Borrower shall have the right to assign its rights hereunder or any interest herein without the prior written consent of all of the Lender Parties.

	Assignments and Participations

.  (a)  Each Lender may and, so long as no Default shall have occurred and be continuing, if demanded by the Company (following a demand by such Lender pursuant to Section 2.10 or 2.12) upon at least five Business Days' notice to such Lender and the Administrative Agent, will assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment or Commitments, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) each such assignment shall be of a uniform, and not a varying, percentage of all rights and obligations under and in respect of any or all of the Facilities, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender, an Affiliate of any Lender or an Approved Fund of any Lender or an assignment of all of a Lender's rights and obligations under this Agreement, the aggregate amount of the Commitments being assigned to such Eligible Assignee pursuant to such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $1,000,000 (or such lesser amount as shall be approved by the Administrative Agent and, so long as no Default shall have occurred and be continuing at the time of effectiveness of such assignment, Holdings) under each Facility, (iii) each such assignment shall be to an Eligible Assignee, (iv) each such assignment made as a result of a demand by the Company pursuant to this Section 8.07(a) shall be arranged by the Company after consultation with the Administrative Agent and shall be either an assignment of all of the rights and obligations of the assigning Lender under this Agreement or an assignment of a portion of such rights and obligations made concurrently with another such assignment or other such assignments that together cover all of the rights and obligations of the assigning Lender under this Agreement, (v) no Lender shall be obligated to make any such assignment as a result of a demand by the Company pursuant to this Section 8.07(a) unless and until such Lender shall have received one or more payments from either the Company or one or more Eligible Assignees in an aggregate amount at least equal to the aggregate outstanding principal amount of the Advances owing to such Lender, together with accrued interest thereon to the date of payment of such principal amount and all other amounts then payable to such Lender under this Agreement, (vi) no such assignments shall be permitted without the consent of the Administrative Agent until the Administrative Agent shall have notified the Lender Parties that syndication of the Commitments hereunder has been completed and (vii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with any Note or Notes held by the assigning Lender subject to such assignment and a processing and recordation fee of $3,500; provided, however, that for each such assignment made as a result of a demand by the Company pursuant to this Section 8.07(a), the Company shall pay to the Administrative Agent the applicable processing and recordation fee; provided, further, that no such processing and recordation fee shall be payable in the case of an assigning Lender which is already a Lender, an Affiliate of such Lender or an Approved Fund of any Lender and in the case of contemporaneous assignments by a Lender to more than one fund managed or advised by the same investment advisor (which funds are not then Lenders hereunder), only a single $3,500 fee shall be payable for all such assignments by such Lender to such funds).

(b)Upon such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the case may be, hereunder and (ii) the Lender or Issuing Bank assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (other than its rights under Sections 2.10, 2.12 and 8.04 to the extent any claim thereunder relates to an event arising prior to such assignment) and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the remaining portion of an assigning Lender's or Issuing Bank's rights and obligations under this Agreement, such Lender or Issuing Bank shall cease to be a party hereto).  If the assignee is not incorporated under the laws of the United States of America or a state thereof, it shall deliver to Holdings and the Administrative Agent certification as to exemption from deduction or withholding of Taxes in accordance with Section 2.12.

(c)By executing and delivering an Assignment and Acceptance, each Lender Party assignor thereunder and each assignee thereunder confirm to and agree with each other and the other parties thereto and hereto as follows:  (i) other than as provided in such Assignment and Acceptance, such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto; (ii) such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of such documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon any Agent, such assigning Lender Party or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Loan Documents as are delegated to such Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender or Issuing Bank, as the case may be.

(d)The Administrative Agent shall maintain at its address referred to in Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the Lender Parties and the Commitment under each Facility of, and principal amount of the Advances owing under each Facility to, each Lender Party from time to time (the "Register").  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrowers, the Agents and the Lender Parties shall treat each Person whose name is recorded in the Register as a Lender Party hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Company or any Agent or any Lender Party at any reasonable time and from time to time upon reasonable prior notice.

(e)Upon its receipt of an Assignment and Acceptance executed by an assigning Lender Party and an assignee, together with any Note or Notes subject to such assignment, the Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to Holdings and each other Agent.  In the case of any assignment by a Lender, promptly after its receipt of such notice, each Borrower, at its own expense, shall execute and deliver to the Administrative Agent in exchange for the surrendered Note or Notes a new Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it under each Facility pursuant to such Assignment and Acceptance and, if any assigning Lender has retained a Commitment hereunder under such Facility, a new Note to the order of such assigning Lender in an amount equal to the Commitment retained by it hereunder.  Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit A-1 or A-2 hereto, as the case may be.

(f)The Issuing Bank may assign to an Eligible Assignee all of its rights and obligations under the undrawn portion of its Letter of Credit Commitment at any time; provided, however, that (i) except in the case of an assignment to a Person that immediately prior to such assignment was an Issuing Bank or an assignment of all of an Issuing Bank's rights and obligations under this Agreement, the amount of the Letter of Credit Commitment of the assigning Issuing Bank being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event be less than $1,000,000 and shall be in an integral multiple of $1,000,000 in excess thereof, (ii) each such assignment shall be to an Eligible Assignee and (iii) the parties to each such assignment shall execute and deliver to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with a processing and recordation fee of $3,500.

(g)Each Lender Party may, without notice to or consent of Holdings or the Administrative Agent, sell participations to one or more Persons (other than any Loan Party or any of its Affiliates) in or to all or a portion of its rights, obligations or rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it and the Note or Notes (if any) held by it); provided, however, that (i) such Lender Party's obligations under this Agreement (including, without limitation, its Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender Party shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrowers, the Agents and the other Lender Parties shall continue to deal solely and directly with such Lender Party in connection with such Lender Party's rights and obligations under this Agreement, (v) the participant shall be entitled to the benefit of the yield protection provisions contained in Sections 2.10, 2.12 (but only to the extent such Lender Party would have been entitled to the benefit of such provisions in the absence of such participation) and 8.04(c) and the right of set-off contained in Section 8.05, (vi) no participant under any such participation shall 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 reduce the principal of, or stated rate of interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, postpone any date scheduled for any payment of principal of, or interest on, the Notes pursuant to Section 2.04 or 2.07 or any date fixed for any payment of fees hereunder or any Guaranteed Obligations payable under the Guaranties, in each case to the extent subject to such participation, or release all or substantially all of the Collateral and (vii) in the case where such Lender Party is organized under the laws of a jurisdiction other than the United States, such Lender Party shall comply with any certification requirements relating to intermediaries that are applicable under the Internal Revenue Code in order to obtain a reduction in or exemption from withholding on payments made by a Borrower to such Lender Party.

(h)Any Lender Party may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 8.07, disclose to the assignee or participant or proposed assignee or participant any information relating to Holdings or any of its Subsidiaries furnished to such Lender Party by or on behalf of Holdings or any of its Subsidiaries; provided, however, that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any Confidential Information received by it from such Lender Party.

(i)Notwithstanding any other provision set forth in this Agreement, any Lender Party may at any time create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the Advances owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank.  No such assignment shall release the assigning Lender from its obligations hereunder.

(j)Notwithstanding anything to the contrary contained herein, any Lender that is a fund that invests in bank loans may, without notice to or consent of Holdings or the Administrative Agent, assign or pledge all or any portion of the Advances owing to it and the Note or Notes held by it to any holder of, the trustee for or other representative of holders of obligations owed, or securities issued, by such fund as security for such obligations or securities, provided that unless and until such trustee actually becomes a Lender in compliance with the other provisions of this Section 8.07, (i) no such pledge shall release the pledging Lender from any of its obligations under the Loan Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender under the Loan Documents even though such trustee may have acquired ownership rights with respect to the pledged interest through foreclosure or otherwise.

(k)Notwithstanding anything to the contrary contained herein, any Lender Party (a "Granting Lender") may grant to a special purpose funding vehicle identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrowers (an "SPC") the option to provide all or any part of any Advance that such Granting Lender would otherwise be obligated to make pursuant to this Agreement, provided that (i) nothing herein shall constitute a commitment by any SPC to fund any Advance, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Advance, the Granting Lender shall be obligated to make such Advance pursuant to the terms hereof. The making of an Advance by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Advance were made by such Granting Lender.  Each party hereto hereby agrees that (i) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender Party would be liable, (ii) no SPC (or any person receiving a payment through such SPC) shall be entitled to the benefits of Sections 2.10 and 2.12 (or any other increased costs protection provision) and (iii) the Granting Lender shall for all purposes, including, without limitation, the approval of any amendment or waiver of any provision of any Loan Document, remain the Lender Party of record hereunder.  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 senior Debt 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 proceeding under the laws of the United States or any State thereof.  Notwithstanding anything to the contrary contained in this Agreement, any SPC may (i) with notice to, but without prior consent of, the Borrowers and the Administrative Agent and with the payment of a processing fee of $500, assign all or any portion of its interest in any Advance to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Advances to any rating agency, commercial paper dealer or provider of any surety or guarantee or credit or liquidity enhancement to such SPC.  This subsection (k) may not be amended without the prior written consent of each Granting Lender, all or any part of whose Advances are being funded by the SPC at the time of such amendment.

	Execution in Counterparts

.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery by telecopier of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement.

	No Liability of the Issuing Bank

.  Each Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit.  Neither the Issuing Bank nor any of its officers or directors shall be liable or responsible for:  (a) the use that may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Bank against presentation of documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that the relevant Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall be liable to such Borrower, to the extent of any direct, but not consequential, damages suffered by that Borrower that such Borrower proves were caused by (i) the Issuing Bank's willful misconduct or gross negligence as determined in a final, non-appealable judgment by a court of competent jurisdiction in determining whether documents presented under any Letter of Credit comply with the terms of the Letter of Credit or (ii) the Issuing Bank's willful failure to make lawful payment under a Letter of Credit after the presentation to it of a draft and certificates strictly complying with the terms and conditions of the Letter of Credit.  In furtherance and not in limitation of the foregoing, the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary.

	Confidentiality

.  Neither any Agent nor any Lender Party shall disclose any Confidential Information to any Person without the consent of the Borrowers, other than (a) to such Agent's or such Lender Party's Affiliates and their officers, directors, employees, agents and advisors (including accountants), to other Lender Parties and to actual or prospective Eligible Assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process, (c) as requested or required by any state, Federal or foreign authority or examiner (including the National Association of Insurance Commissioners or any similar organization or quasi-regulatory authority) regulating such Lender Party, (d) to 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, (e) in connection with any litigation or proceeding to which such Agent or such Lender Party or any of its Affiliates may be a party, (f) in connection with the exercise of any remedy under this Agreement or any other Loan Document, (g) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to any such contractual counterparty's professional advisor), so long as such contractual counterparty (or such professional advisor) agrees to be bound by the provisions of this Section 8.10 or (h) as provided in Section 8.07(h).

	Release of Collateral

.  Upon the sale, lease, transfer or other disposition of any Loan Party or any item of Collateral of any Loan Party in each case in accordance with the terms of the Loan Documents, the Collateral Agent will, at the Company's expense, execute and deliver to such Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents in accordance with the terms of the Loan Documents.

	Jurisdiction, Etc

.  (a)  Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the fullest extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any of the other Loan Documents in the courts of any jurisdiction.

(b)Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party in any New York State or Federal court.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

	Governing Law

.  This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.

	Waiver of Jury Trial

.  Each of Holdings and the Borrowers, the Agents and the Lender Parties irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to any of the Loan Documents, the Advances, the Letters of Credit or the actions of any Agent or any Lender Party in the negotiation, administration, performance or enforcement thereof.

	Integration

.  This Agreement, together with all Exhibits and Schedules hereto, and the other Loan Documents represent the entire agreement of the Lender Parties, the Agents and the Loan Parties with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by any Lender Party, any Agent or any Loan Party relative to subject matter hereof or thereof not expressly set forth or referred to herein or in the other Exhibits, Schedules or Loan Documents.

	Interest Rate Limitation

.  Notwithstanding anything herein or in the Notes to the contrary, if any time the applicable interest rate, together with all fees and charges that are treated as interest under applicable law (collectively, the "Charges"), as provided for herein or in any other document executed in connection herewith, or otherwise contracted for, charged, received, taken or reserved by any Lender Party, shall exceed the maximum lawful rate (the "Maximum Rate") that may be contracted for, charged, taken, received or reserved by such Lender Party in accordance with applicable law, the rate of interest payable hereunder or under the Note held by such Lender Party, together with all Charges payable to such Lender Party, shall be limited to the Maximum Rate.

[remainder of this page intentionally left blank]

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

By: /s/ Albert N. Marchio, II

Title: Vice President

ALPHARMA USPD INC. 

By: /s/ Albert N. Marchio, II

Title: Vice President

ALPHARMA INC.

By: /s/ Albert N. Marchio, II

Title: Vice President

 

Agents

BANK OF AMERICA, N.A.,                                as Administrative Agent

By: /s/ Joseph L. Corah

Title: Principal

BANC OF AMERICA SECURITIES LLC,        as Lead Arranger and Book Manager

By: /s/ Geoffrey E. Ellis

Title: Vice President

FLEET NATIONAL BANK,                                  as Syndication Agent

By: /s/ G. Stolzenthaler

Title: Managing Director

DEN NORSKE BANK ASA,                                         as Co-Documentation Agent

By: /s/ Henrich Asland

Title: Senior Vice President

By: /s/ Philip F. Kurpiewski

Title: First Vice President

UNION BANK OF NORWAY,                           as Co-Documentation Agent

By: /s/ Sven Hove

Title: General Manager

Initial Lenders

	
BANK OF AMERICA, N.A., as Initial Lender,

 Initial Issuing Bank and Swing Line Bank

By: /s/ Joseph L. Corah

Title: Principal

FLEET NATIONAL BANK, as Lender

By: /s/ Ginger Stonzenhaler

Title: Managing Director

UNION BANK OF NORWAY, as Lender

By: /s/ Sven Hove

Title: General Manager

DEN NORSKE BANK ASA, as Lender

By: /s/ Henrik Asland

Title: Senior Vice President

By: /s/ Philip F. Kurpiewski

Title: First Vice President

CITICORP USA, INC., as Lender

By: /s/ Leland Richards

Title: Vice President

CIBC INC., as Lender 

By: /s/ Terence Moore

Title: Executive Director

LANDESBANK SCHLESWIG-HOLSTEIN

GIROZENTRALE, COPENHAGEN BRANCH as Lender

By: /s/ Steffen E. Andersen

Title: Senior Vice President

By: /s/ Finn Bergmann

Title: Vice President

KZH CNC LLC, as Lender 

By: /s/ Susan Lee

Title: Authorized Agent

KZH CYPRESSTREE-1 LLC, as Lender

By: /s/ Susan Lee

Title: Authorized Agent

KZH ING-1 LLC, as Lender

By: /s/ Susan Lee

Title: Authorized Agent

KZH ING-2 LLC, as Lender

By: /s/ Susan Lee

Title: Authorized Agent

KZH ING-3 LLC, as Lender

By: /s/ Susan Lee

Title: Authorized Agent

KZH RIVERSIDE LLC, as Lender

By: /s/ Susan Lee

Title: Authorized Agent

KZH SHOSHONE LLC, as Lender

By: /s/ Susan Lee

Title: Authorized Agent

KZH SOLEIL LLC, as Lender

By: /s/ Susan Lee

Title: Authorized Agent

 

 

KZH SOLEIL-2 LLC, as Lender

By: /s/ Susan Lee 

Title: Authorized Agent

SAWGRASS TRADING LLC, as Lender

By: /s/ Ann E. Morris

Title: Assistant Vice President

SCUDDER FLOATING RATE FUND, as Lender

By: /s/ Kenneth Weber

Title: Senior Vice President

STEIN ROE FLOATING RATE LIMITED 

LIABILITY COMPANY, as Lender

By: /s/ Brian W. Good

Title: Senior Vice President

 SUNAMERICA LIFE INSURANCE

 COMPANY, as Lender

By: /s/ John G. Lapham III

Title: Authorized Agent

THE TRAVELERS INSURANCE COMPANY, 

as Lender

By: /s/ Matthew J. McInerny

Title: Assistant Investment Officer

TRAVELERS CORPORATE LOAN FUND,

 INC., as Lender

By: Travelers Asset Management International Company, LLC

By: /s/ Matthew J. McInerny

Title: Assistant Investment Officer
	
BNP PARIBAS, as Lender

By: /s/ Duane Helkowski

Title: Director

By: /s/ Shayn March

Title: Vice President

BNP PARIBAS OSLO BRANCH, as Lender

By: /s/ Mikkel Andreas Vogt

Title: General Manager - Corporate

COOPERATIEVE CENTRALE RAIFFEISEN-

BOERENLEENBANK B.A.,

 "RABOBANK INTERNATIONAL", NEW 

YORK BRANCH, as Lender

By: /s/ J. David Thomas

Title: Vice President

By: /s/ Barbara A. Hyland

Title: Managing Director

IKB CAPITAL CORPORATION, as Lender

By: /s/ David Snyder

Title: President

NATIONAL CITY BANK, as Lender

By: /s/ Phillip R. Duryea

Title: Vice President

GALAXY CLO 1999-1, LTD., as Lender

By: SAI Investment Adviser, Inc.

       its Collateral Manager

By: /s/ John G. Lapham, III

Title: Authorized Agent

KZH STERLING LLC, as Lender

By: /s/ Susan Lee

Title: Authorized Agent

LIBERTY-STEIN ROE ADVISOR FLOATING 

RATE ADVANTAGE FUND, as Lender

By: Stein Roe & Farnham Incorporated,                     as Advisor

By: /s/ Brian W. Good

Title: Sr. Vice President & Portfolio Manager

METROPOLITAN LIFE INSURANCE

COMPANY, as Lender

By: /s/ James R. Dingler

Title: Director

MORGAN STANLEY PRIME INCOME 

TRUST, as Lender

By: /s/ Sheila A. Finnerty

Title: Executive Director

OPPENHEIMER SENIOR FLOATING 

RATE FUND, as Lender

By: /s/ Lisa Chaffee

Title: Manager

PROTECTIVE LIFE INSURANCE

 COMPANY, as Lender

By: /s/ Diane S. Griswold

Title: Assistant Vice President

RIVIERA FUNDING LLC, as Lender

By: /s/ Ann E. Morris

Title: Assistant Vice President

 

 

SCHEDULE I

COMMITMENTS AND APPLICABLE LENDING OFFICES

Commitments

	
Name of Initial Lender Party
	
Term A

Commitment
	
Term B

Commitment
	
Revolving

Credit

Commitment
	
Operational Letter of Credit Commitment
	
Tender Offer L/C Commitment

	
Bank of America, N.A.
	
$27,631,578.93
	
$302,400,000.00 
	
$47,368,421.07
	
$25,000,000.00
	
$260,000,000.00

	
Fleet National Bank
	
$22,105,263.16
	
$10,000,000.00
	
$37,894,736.84
	
	

	
Union Bank of Norway
	
$27,631,578.95
	
	
$47,368,421.05
	
	

	
Den norske Bank ASA
	
$27,631,578.95
	
$15,000,000.00
	
$47,368,421.05
	
	

	
Citicorp, USA, Inc.
	
$16,578,947.37
	
	
$28,421,052.63
	
	

	
CIBC Inc.
	
$12,894,736.84
	
	
$22,105,263.16
	
	

	
Landesbank Schleswig-Holstein Girozentrale
	
$12,894,736.84
	
	
$22,105,263.16
	
	

	
BNP Paribas
	
$5,000,000.00
	
$5,000,000.00
	
$2,500,000.00
	
	

	
BNP Paribas - Oslo Branch
	
$6,052,631.58
	
	
$16,447,368.42
	
	

	
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank International", New York Branch

	
$9,210,526.32
	
	
$15,789,473.68
	
	

	
IKB Capital Corporation
	
$3,684,210.53
	
$5,000,000.00
	
$6,315,789.47
	
	

	
National City Bank
	
$3,684,210.53
	
$5,000,000.00
	
$6,315,789.47
	
	

	
Galaxy CLO
	
	
$1,500,000.00
	
	
	

	
KZH CNC LLC
	
	
$4,000,000.00
	
	
	

	
KZH CypressTree-1 LLC
	
	
$3,000,000.00
	
	
	

	
KZH ING-1 LLC
	
	
$1,000,000.00
	
	
	

	
KZH ING-2 LLC
	
	
$4,000,000.00
	
	
	

	
KZH ING-3 LLC
	
	
$1,000,000.00
	
	
	

	
KZH Riverside LLC
	
	
$4,000,000.00
	
	
	

	
KZH Shoshone LLC
	
	
$2,500,000.00
	
	
	

	
KZH Soleil LLC
	
	
$1,500,000.00
	
	
	

	
KZH Soleil-2 LLC
	
	
$1,500,000.00
	
	
	

	
KZH Sterling LLC
	
	
$2,000,000.00
	
	
	

	
Liberty-Stein Roe Advisor Floating Rate Advantage Fund
	
	
$3,500,000.00
	
	
	

	
Metropolitan Life Insurance Company
	
	
$15,000,000.00
	
	
	

	
Morgan Stanley Prime Income-Trust
	
	
$5,000,000.00
	
	
	

	
Oppenheimer Senior Floating Rate Fund
	
	
$2,500,000.00
	
	
	

	
Protective Life Insurance Company
	
	
$6,000,000.00
	
	
	

	
Riviera Funding LLC
	
	
$5,000,000.00
	
	
	

	
Sawgrass Trading LLC

	
	
$2,000,000.00
	
	
	

	
Scudder Floating Rate Fund
	
	
$2,000,000.00
	
	
	

	
Stein Roe Floating Rate Limited Liability Company
	
	
$5,000,000.00
	
	
	

	
SunAmerica Life Insurance Company
	
	
$4,500,000.00
	
	
	

	
The Travelers Insurance Comapany  
	
	
$4,600,000.00
	
	
	

	
Travelers Corporate Loan Fund Inc.
	
	
$1,500,000.00
	
	
	

	
Total
	
$175,000,000.00
	
$425,000,000.00
	
$300,000,000.00
	
$25,000,000.00
	
$260,000,000.00

 

 

SCHEDULE I

COMMITMENTS AND APPLICABLE LENDING OFFICES

Applicable Lending Offices

	
Name of Initial Lender Party
	
Domestic Lending Office
	
Euro Lending Office
	
Credit Contact

	
Bank of America, N.A.
	
Bank of America, N.A.

Independence Center

15th Floor

NC1-001-15-04

101 North Tryon Street

Charlotte, North Carolina 28255

NC1-001-15-04

101 N. Tryon Street

Charlotte, North Caroline 28255

Elizabeth S. Garver 

Tel: (704) 386 8451

Fax: (704) 409 0004

1455 Market Street

San Francisco, CA 94801

Attn: Aamir Saleem, Additional Administrative Contact (for financial statements, compliance certificates, and notices other than borrowing, repayment, etc.)

CA5-704-05-19

Tel: (415) 436-2769

Fax: (415) 503-5089

	
Bank of America, N.A.

Independence Center

15th Floor

NC1-001-15-04

101 North Tryon Street

Charlotte, North Carolina 28255
	
Bank of America, N.A.

Independence Center

15th Floor

NC-007-17-11

101 North Tryon Street

Charlotte, North Carolina 28255-0001

Attention: Joseph Corah

Tel: (704) 386-5976

Fax: (704) 388-6002

	
Fleet National Bank
	
Fleet National Bank

301 Carnegie Center

Princeton, NJ 08543
	
Fleet National Bank

301 Carnegie Center

Princeton, NJ 08543
	
Fleet National Bank

301 Carnegie Center

Princeton, NJ 08543

Attn: Walter Trotman

Tel: (609) 987-3249

Fax: (609) 987-3341

	
Union Bank of Norway
	
Union Bank of Norway

Loan Administration

PO Box 1172 Sentrum

0107 Oslo, Norway

Tel: + 4722319929

Fax: + 4722318643
	
Union Bank of Norway

Loan Administration

PO Box 1172 Sentrum

0107 Oslo, Norway

Tel: + 4722319929

Fax: + 4722318643
	
Union Bank of Norway

 PO Box 1172 Sentrum

0107 Oslo, Norway

Attn: Sven Hove/Thomas Tangen

Tel: + 4722318668/18649

Fax: + 4722319022

	
Den norske Bank ASA
	
Den norske Bank ASA

New York Branch

200 Park Avenue

Floor 31

New York, NY 10166-0396

Attn: Theresa Rosu

Tel: (212) 681-3845

Fax: (212) 681-4123
	
Den norske Bank ASA

New York Branch

200 Park Avenue

Floor 31

New York, NY 10166-0396

Attn: Theresa Rosu

Tel: (212) 681-3845

Fax: (212) 681-4123
	
Den norske Bank ASA

Stranden 21

N-0021 Oslo

Norway

Attn: Lars Ellegard, Vice President

Tel: + 47 22 48 11 61

Fax: + 47 22 48 29 87 

	
Citicorp USA, Inc.
	
Citicorp USA, Inc.

Two Penns Way, Suite 200

New Castle, DE 19720

Attn: Mehment Durgun

Tel: (302) 894-6009

Fax: (302) 894-6120
	
Citicorp USA, Inc.

Two Penns Way, Suite 200

New Castle, DE 19720

Attn: Mehment Durgun

Tel: (302) 894-6009

Fax: (302) 894-6120
	
Citicorp USA, Inc.

390 Greenwich Street

New York, NY 10013

Attn: Allen Fisher

Tel: (212) 723-6708

Fax: (212) 723-8544

	
CIBC Inc.
	
CIBC INC.

Two Paces West

2727 Paces Perry Road

Suite 1200

Atlanta, GA 30339

Attn: Kathryn McGovern

Tel: (770) 319-4821

Fax: (770) 319-4955
	
CIBC INC.

Two Paces West

2727 Paces Perry Road

Suite 1200

Atlanta, GA 30339

Attn: Kathryn McGovern

Tel: (770) 319-4821

Fax: (770) 319-4955
	
CIBC INC.

425 Lexington Avenue

8th floor

New York, NY 10017 

Attn: Terence Moore

Tel: (212) 856-3528

Fax: (212) 856-3761

	
Landesbank Schleswig-Holstein Girozentrale
	
Landesbank Schleswig-Holstein Girozentrale

39-41 Kalvebod Brygge

DK 1560 Copenhagen V, Denmark

Attn: Loan Administration Department

Tel: + 45 33 44 99 00 x9920

Telex: 27228 kila dk

Fax: + 45 33 44 99 99
	
Landesbank Schleswig-Holstein Girozentrale

39-41 Kalvebod Brygge

DK 1560 Copenhagen V, Denmark

Attn: Loan Administration Department

Tel: + 45 33 44 99 00, x9902

Telex: 27228 kila dk

Fax: + 45 33 44 99 99
	
Landesbank Schleswig-Holstein Girozentrale

39-41 Kalvebod Brygge

DK 1560 Copenhagen V, Denmark

Attn: Finn Bergmann

Tel: + 45 33 44 99 00

Telex: 27228 kila dk

Fax: + 45 33 44 99 99

	
BNP Paribas
	
BNP Paribas

787 Seventh Avenue

New York, NY 10019
	
BNP Paribas

787 Seventh Avenue

New York, NY 10019
	
BNP Paribas

787 Seventh Avenue

New York, NY 10019

Attn: Shayn March

Tel: (212) 841-3938

Fax: (212) 841-3049

	
BNP Paribas - Oslo Branch
	
BNP Paribas - Oslo Branch

Postbox 106 Sentrum

0102 Oslo, Norway
	
BNP Paribas

787 Seventh Avenue

New York, NY 10019
	
BNP Paribas - Oslo Branch

Postbox 106 Sentrum

0102 Oslo, Norway

Attn: Rolf Vikan

Tel: + 47 22 82 95 35

Fax: + 47 22 41 08 44

	
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank International", New York Branch
	
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank International", New York Branch

245 Park Avenue

New York, NY 10167

Attn: Luz Alcantara

10 Exchange Place, 10th Floor

Jersey City, NJ 07302

Tel: (201) 499-5322

Fax: (201) 499-5326
	
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank International", New York Branch

245 Park Avenue

New York, NY 10167

Attn: Luz Alcantara

10 Exchange Place, 10th Floor

Jersey City, NJ 07302

Tel: (201) 499-5322

Fax: (201) 499-5326
	
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank International", New York Branch

13355 Noel Rd, #1000

Dallas, TX 75240

Attn: J. David Thomas, Vice President

Tel: (972) 419-5266

Fax: (972) 419-6315 

	
IKB Capital Corporation
	
IKB Capital Corporation

555 Madison Avenue

24th Floor

New York, NY 10022

Attn: Wolfgang Boeker/ April Greves

Tel: (212) 485-3600

Fax: (212) 644-9470
	
IKB Capital Corporation

555 Madison Avenue

24th Floor

New York, NY 10022

Attn: Wolfgang Boeker/ April Greves

Tel: (212) 485-3600

Fax: (212) 644-9470
	
IKB Capital Corporation

125 West 55th St.

New York, NY 10019

Attn: Thomas Bleher

Tel: (212) 485-3633

Fax: (212) 583-8833 

	
National City Bank
	
National City Bank

1900 East Ninth Street

Cleveland, OH 44114

Attn: Vernon Johnson

Tel: (216) 488-7099

Fax: (211) 488-7110
	
National City Bank

1900 East Ninth Street

Cleveland, OH 44114

Attn: Vernon Johnson

Tel: (216) 488-7099

Fax: (211) 488-7110
	
National City Bank

1900 East Ninth Street

Cleveland, OH 44114

Mail Locator: 2077

Attn: Phillip R. Duryea, Vice President

Tel: (216) 222-3629

Fax: (216) 222-0003 

	
Galaxy CLO 1999-1, Ltd.
	
SAI Investment Adviser, Inc.

1 SunAmerica Center, 34th Floor

Century City

Los Angeles, CA 90067-6022

Attn: Andrew Meissner

Tel: (310) 772-6467

Fax: (310) 772-6078 
	
SAI Investment Adviser, Inc.

1 SunAmerica Center, 34th Floor

Century City

Los Angeles, CA 90067-6022

Attn: Andrew Meissner

Tel: (310) 772-6467

Fax: (310) 772-6078 
	
SAI Investment Adviser, Inc.

1 SunAmerica Center, 34th Floor

Century City

Los Angeles, CA 90067-6022

Attn: Mimi Goldstein

Tel: (310) 772-6562

Fax: (310) 772-6078 

	
KZH CNC LLC
	
KZH CNC LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
KZH CNC LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
KZH CNC LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 

	
KZH CypressTree-1 LLC
	
KZH Cypress Tree-1 LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
KZH Cypress Tree-1 LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
KZH Cypress Tree-1 LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 

	
KZH ING-1 LLC
	
KZH ING-1 LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
KZH ING-1 LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
ING Capital Advisors LLC

333 S. Grand Ave., Suite 4100

Los Angeles, CA 90071

Attn: Karen Morgan

Tel: (213) 621-3773

Fax: (213) 621-3795 

	
KZH ING-2 LLC
	
KZH ING-2 LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
KZH ING-2 LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
ING Capital Advisors LLC

333 S. Grand Ave., Suite 4100

Los Angeles, CA 90071

Attn: Karen Morgan

Tel: (213) 621-3773

Fax: (213) 621-3795 

	
KZH ING-3 LLC
	
KZH ING-3 LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
KZH ING-3 LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
ING Capital Advisors LLC

333 S. Grand Ave., Suite 4100

Los Angeles, CA 90071

Attn: Karen Morgan

Tel: (213) 621-3773

Fax: (213) 621-3795 

	
KZH RiversideLLC
	
KZH Riverside LLC

c/o The Chase Manhattan Bank

450 West 33rd Street, 15th Floor

New York, NY 10001

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123
	
KZH Riverside LLC

c/o The Chase Manhattan Bank

450 West 33rd Street, 15th Floor

New York, NY 10001

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123
	
KZH Riverside LLC

c/o The Chase Manhattan Bank

450 West 33rd Street, 15th Floor

New York, NY 10001

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123

	
KZH Soleil LLC
	
KZH Soleil LLC

c/o The Chase Manhattan Bank

450 West 33rd Street, 15th Floor

New York, NY 10001

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123
	
KZH Soleil LLC

 c/o The Chase Manhattan Bank

450 West 33rd Street, 15th Floor

New York, NY 10001

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123
	
SAI Investment Adviser, Inc.

1 SunAmerica Center, 34th Floor

Century City

Los Angeles, CA 90067-6022

Attn: Mimi Goldstein

Tel: (310) 772-6562

Fax: (310) 772-6078 

	
KZH Soleil-2 LLC
	
KZH Soleil-2 LLC

 c/o The Chase Manhattan Bank

450 West 33rd Street, 15th Floor

New York, NY 10001

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123
	
KZH Soleil-2 LLC

 c/o The Chase Manhattan Bank

450 West 33rd Street, 15th Floor

New York, NY 10001

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123
	
SAI Investment Adviser, Inc.

1 SunAmerica Center, 34th Floor

Century City

Los Angeles, CA 90067-6022

Attn: Mimi Goldstein

Tel: (310) 772-6562

Fax: (310) 772-6078 

	
KZH Sterling LLC
	
KZH Sterling LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
KZH Sterling LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 
	
KZH Sterling LLC

c/o The Chase Manhattan Bank

140 East 45th Street, 11th Floor

New York, NY 10017

Attn: Virginia Conway

Tel: (212) 622-9353

Fax: (212) 622-0123 

	
Liberty-Stein Roe Advisor Floating Rate Advantage Fund
	
Stein, Roe & Farnham Incorporated

One South Wacker Drive, 33rd FL

Chicago, IL 60606-4685

Attn: Rhondda Colembarte

Tel: (312) 368-5618

Fax: (312) 368-3607
	
Stein, Roe & Farnham Incorporated

One South Wacker Drive, 33rd FL

Chicago, IL 60606-4685

Attn: Rhondda Colembarte

Tel: (312) 368-5618

Fax: (312) 368-3607
	
Stein, Roe & Farnham Incorporated

One South Wacker Drive, 33rd FL

Chicago, IL 60606-4685

Attn: Jeff Kovanda

Tel: (312) 368-8104

Fax: (312) 368-5607

	
Metropolitan Life Insurance Company
	
MetLife

4100 Boy Scout Boulevard

Tampa, FL 33607

Attn: Neil Fredricks

Tel: (813) 801-2455

Fax: (813) 801-2515
	
MetLife

4100 Boy Scout Boulevard

Tampa, FL 33607

Attn: Neil Fredricks

Tel: (813) 801-2455

Fax: (813) 801-2515
	
MetLife

334 Madison Avenue

Convent Station, NJ 07961

Attn: Rick Richert

Tel: (973) 254-3207

Fax: (973) 254-3032 

	
Morgan Stanley Prime Income-Trust
	
Morgan Stanley Prime Income Trust

c/o Morgan Stanley Investment Management

1221 Avenue of the Americas, 22nd Floor

New York, NY 10020

Attn: Jinny Kim

Tel: (212) 762-4758

Fax: (212) 762-7428
	
Morgan Stanley Prime Income Trust

c/o Morgan Stanley Investment Management

1221 Avenue of the Americas, 22nd Floor

New York, NY 10020

Attn: Jinny Kim

Tel: (212) 762-4758

Fax: (212) 762-7428
	
Morgan Stanley Prime Income Trust

c/o Morgan Stanley Investment Management

1221 Avenue of the Americas, 22nd Floor

New York, NY 10020

Attn: Jinny Kim

Tel: (212) 762-4758

Fax: (212) 762-7428

	
Oppenheimer Senior Floating Rate Fund
	
BNY Asset Solutions, LLC

500 E. Las Colinas Blvd.

Suite 1300

Irving, TX 75039

Attn: Dyan Westfall/ Steve Jerard

Tel: (972) 401-8588/8600

Fax: (303) 645-0820
	
BNY Asset Solutions, LLC

500 E. Las Colinas Blvd.

Suite 1300

Irving, TX 75039

Attn: Dyan Westfall/ Steve Jerard

Tel: (972) 401-8588/8600

Fax: (303) 645-0820
	
OppenheimerFunds, Inc.

6803 South Tuscon Way

Englewood, CO 80112-3924

Attn: Myk Pleet

Tel: (303) 768-2260

Fax: (303) 645-0933 

	
Protective Life Insurance Company
	
Protective Life Insurance Company

2801 Highway 280 South

Birmingham, AL 35223

Attn: Dodie LeCren

Tel: (205) 868-3615

Fax: (205) 868-3642
	
Protective Life Insurance Company

2801 Highway 280 South

Birmingham, AL 35223

Attn: Dodie LeCren

Tel: (205) 868-3615

Fax: (205) 868-3642
	
Protective Life Insurance Company

2801 Highway 280 South

Birmingham, AL 35223

Attn: Diane Griswold, AVP, Investments

Tel: (205) 868-4427

Fax: (205) 868-3642 

	
Riviera Funding LLC
	
Bank of America, N.A.

101 N. Tryon Street

NC1-001-15-01

Charlotte, NC 28273

Attn: Sarah Harder

Tel: (704) 386-4538

Fax: (704) 409-0171
	
Bank of America, N.A.

101 N. Tryon Street

NC1-001-15-01

Charlotte, NC 28273

Attn: Sarah Harder

Tel: (704) 386-4538

Fax: (704) 409-0171
	
Bank of America Securities LLC

100 North Tryon Street

NC1-007-06-07

Charlotte, NC 28255

Attn: Annabet Morris/ Diana Mushill

Tel: (704) 387-1939/9951

Fax: (704) 388-0648 

	
Sawgrass Trading LLC
	
Bank of America, N.A.

101 N. Tryon Street

NC1-001-15-01

Charlotte, NC 28273

Attn: Farrah Brown

Tel: (704) 386-9417

Fax: (704) 386-6453
	
Bank of America, N.A.

101 N. Tryon Street

NC1-001-15-01

Charlotte, NC 28273

Attn: Farrah Brown

Tel: (704) 386-9417

Fax: (704) 386-6453
	
Bank of America Securities LLC

100 North Tryon Street

NC1-007-06-07

Charlotte, NC 28255

Attn: Annabet Morrs/ Dianan Mushill

Tel: (704) 387-1939

Fax: (704) 388-0648

	
Scudder Floating Rate Fund
	
Scudder Floating Rate Fund

Zurich Scudder Investments, Inc.

Two International Place, 14th Floor

Boston, MA 02110

Attn: Kelly Babson

Tony Borges

Tel: (617) 295-2426/2520

Fax: (617) 295-4059
	
Scudder Floating Rate Fund

Zurich Scudder Investments, Inc.

Two International Place, 14th Floor

Boston, MA 02110

Attn: Kelly Babson

Tony Borges

Tel: (617) 295-2426/2520

Fax: (617) 295-4059
	
Scudder Floating Rate Fund

Zurich Scudder Investments, Inc.

Two International Place, 14th Floor

Boston, MA 02110

Attn: Suzzane Smore

Tel: (617) 295-3225

Fax: (617) 443-2104 

	
Stein Roe Floating Rate Limited Liability Company
	
Stein, Roe & Fanaham Incorporated

One South Wacker Drive, 33rd FL

Chicago, IL 60606-4685

Attn: Rhondda Colembarte

Tel: (312) 368-5618

Fax: (312) 368-3607
	
Stein, Roe & Farnham Incorporated

One South Wacker Drive, 33rd FL

Chicago, IL 60606-4685

Attn: Rhondda Colembarte

Tel: (312) 368-5618

Fax: (312) 368-3607
	
Stein, Roe & Farnham Incorporated

One South Wacker Drive, 33rd FL

Chicago, IL 60606-4685

Attn: Jeff Kovanda

Tel: (312) 368-8104

Fax: (312) 368-5607

	
SunAmerica Life Insurance Company
	
SunAmerica Investments

1 SunAmerica Center

Los Angeles, CA 90067-6022

Attn: Lisa Moore, 34th Floor

Tel: (310) 772-6525

Fax: (310) 772-6078 
	
SunAmerica Investments

1 SunAmerica Center

Los Angeles, CA 90067-6022

Attn: Lisa Moore, 34th Floor

Tel: (310) 772-6525

Fax: (310) 772-6078 
	
SunAmerica Investments

1 SunAmerica Center

Los Angeles, CA 90067-6022

Attn: Tom Brandt, 34th Floor

Tel: (310) 772-6125

Fax: (310) 772-6078 

	
The Travelers Insurance Comapany  
	
The Travelers Ins. Co. c/o Citigroup Investments, Inc.

242 Trumbull Street

P.O. Box 150449, 5th Floor

Hartford, CT 06115-0449

Attn: James A. DeLuca

Tel: (860) 954-3834

Fax: (860) 277-7941 
	
The Travelers Ins. Co. c/o Citigroup Investments, Inc.

242 Trumbull Street

P.O. Box 150449, 5th Floor

Hartford, CT 06115-0449

Attn: James A. DeLuca

Tel: (860) 954-3834

Fax: (860) 277-7941 
	
The Travelers Ins. Co. c/o Citigroup Investments, Inc.

242 Trumbull Street

P.O. Box 150449, 5th Floor

Hartford, CT 06115-0449

Attn: Matt McInerny

Tel: (860) 954-5145

Fax: (860) 954-3730 

	
Travelers Corporate Loan Fund Inc.
	
Travelers Corporate Loan Fund c/o Citigroup Investments, Inc.

242 Trumbull Street

P.O. Box 150449, 5th Floor

Hartford, CT 06115-0449

Attn: James A. DeLuca

Tel: (860) 954-3834

Fax: (860) 277-7941 
	
Travelers Corporate Loan Fund c/o Citigroup Investments, Inc.

242 Trumbull Street

P.O. Box 150449, 5th Floor

Hartford, CT 06115-0449

Attn: James A. DeLuca

Tel: (860) 954-3834

Fax: (860) 277-7941 
	
Travelers Corporate Loan Fund c/o Citigroup Investments, Inc.

242 Trumbull Street

P.O. Box 150449, 5th Floor

Hartford, CT 06115-0449

Attn: Matt McInerny

Tel: (860) 954-5145

Fax: (860) 954-3730 

CONFORMED COPY

$900,000,000

CREDIT AGREEMENT

Dated as of October 5, 2001

Among

ALPHARMA OPERATING CORPORATION

AND CERTAIN U.S. SUBSIDIARIES

as Borrowers 

and

ALPHARMA INC.

as Holdings

and

BANK OF AMERICA, N.A.,

as an Initial Lender, Initial Issuing Bank and Swing Line Bank 

and

THE BANKS, FINANCIAL INSTITUTIONS, AND OTHER LENDERS PARTY HERETO,

as Lenders

and

BANK OF AMERICA, N.A.,

as Administrative Agent and as Collateral Agent

and

FLEET NATIONAL BANK,

as Syndication Agent 

and

DEN NORSKE BANK and UNION BANK OF NORWAY,

as Co-Documentation Agents

and

BANC OF AMERICA SECURITIES LLC

as Sole Lead Arranger and Sole Book Manager

TABLE OF CONTENTS
SectionPage

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms*

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions*

SECTION 1.03. Accounting Terms*

SECTION 1.04. Currency Equivalents Generally*

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances and the Letters of Credit; Subsidiary Borrowers*

SECTION 2.02. Making the Advances*

SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit*

SECTION 2.04. Repayment of Advances*

SECTION 2.05. Termination or Reduction of the Commitments*

SECTION 2.06. Prepayments*

SECTION 2.07. Interest*

SECTION 2.08. Fees*

SECTION 2.09. Conversion of Advances*

SECTION 2.10. Increased Costs, Etc*

SECTION 2.11. Payments and Computations*

SECTION 2.12. Taxes*

SECTION 2.13. Sharing of Payments, Etc*

SECTION 2.14. Use of Proceeds*

SECTION 2.15. Defaulting Lenders*

SECTION 2.16. Evidence of Debt*

SECTION 2.17. Incremental Facilities and Commitments*

ARTICLE III

CONDITIONS OF LENDING AND

ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Initial Extension of Credit*

SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance and Renewal*

SECTION 3.03. Determinations Under Section 3.01*

ARTICLE IV

REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of Holdings and the Borrowers*

ARTICLE V

COVENANTS OF THE BORROWERS AND HOLDINGS
SECTION 5.01. Affirmative Covenants*

SECTION 5.02. Negative Covenants*

SECTION 5.03. Reporting Requirements*

SECTION 5.04. Financial Covenants*

ARTICLE VI

EVENTS OF DEFAULT
SECTION 6.01. Events of Default*

SECTION 6.02. Actions in Respect of the Letters of Credit upon Default*

ARTICLE VII

THE AGENTS
SECTION 7.01. Appointment, Powers and Immunity*

SECTION 7.02. Reliance by Agent*

SECTION 7.03. Defaults*

SECTION 7.04. Bank of America, BAS, Fleet, DnB, UBN and Affiliates*

SECTION 7.05. Indemnification*

SECTION 7.06. Non-Reliance on Agent and Other Lender Parties*

SECTION 7.07. Resignation of Administrative Agent*

ARTICLE VIII

MISCELLANEOUS
SECTION 8.01. Amendments, Etc*

SECTION 8.02. Notices, Etc*

SECTION 8.03. No Waiver; Remedies*

SECTION 8.04. Costs and Expenses*

SECTION 8.05. Right of Set-off*

SECTION 8.06. Binding Effect*

SECTION 8.07. Assignments and Participations*

SECTION 8.08. Execution in Counterparts*

SECTION 8.09. No Liability of the Issuing Bank*

SECTION 8.10. Confidentiality*

SECTION 8.11. Release of Collateral*

SECTION 8.12. Jurisdiction, Etc*

SECTION 8.13. Governing Law*

SECTION 8.14. Waiver of Jury Trial*

SECTION 8.15. Integration*

SECTION 8.16. Interest Rate Limitation*

 

 

SCHEDULES

Schedule I-Commitments and Applicable Lending Offices

EXHIBITS

Exhibit A-1-Form of Term Note

Exhibit A-2-Form of Revolving Credit Note

Exhibit B-1-Form of Notice of Borrowing

Exhibit B-2-Form of Notice of Conversion

Exhibit C-Form of Assignment and Acceptance

Exhibit D-Form of Security Agreement

Exhibit E-1-Form of Subsidiary Guaranty

Exhibit E-2-Form of Parent Guaranty

Exhibit F-Form of Mortgage
Exhibit G-Form of Intellectual Property Security Agreement

Exhibit H-Form of Solvency Certificate

Exhibit I-1-Form of Opinion of Borrowers' Counsel

Exhibit I-2-Form of Opinion of Chief Legal Officer

Exhibit J-Form of Tender Offer L/C

Exhibit K-Form of Compliance Certificate

Exhibit L-Form of Subsidiary Borrowing Agreement

Exhibit M-Form of Australia Security Agreement

Exhibit N-Form of Bermuda Security Agreement

Exhibit O-Form of Barbados Stock PledgeNote Purchase Agreement

EXHIBIT 10.1

SEITEL, INC.

NOTE PURCHASE AGREEMENT

Dated as of October 15, 2001

$20,000,000 7.04% Series G Senior Notes due October 15, 2006

$50,000,000 7.19% Series H Senior Notes due October 15, 2008

$37,000,000 7.34% Series I Senior Notes due October 15, 2011

TABLE OF CONTENTS

	
1
	
AUTHORIZATION OF NOTES.
	
1

	
2
	
SALE AND PURCHASE OF NOTES.
	
2

	
3
	
CLOSINGS.
	
2

	
 
	
3.1.
	
First Closing.
	
2

	
 
	
3.2.
	
Notice of Second Closing; Second Closing
	
3

	
 
	
3.3.
	
Failure of the Company to Deliver.
	
3

	
 
	
3.4.
	
Failure by You to Deliver.
	
3

	
4
	
YOUR CONDITIONS TO CLOSINGS.
	
4

	
 
	
4.1.
	
Representations and Warranties.
	
4

	
 
	
4.2.
	
Performance; No Default.
	
4

	
 
	
4.3.
	
Compliance Certificates.
	
4

	
 
	
4.4.
	
Opinions of Counsel.
	
5

	
 
	
4.5.
	
Purchases Permitted By Applicable Law, etc.
	
5

	
 
	
4.6.
	
Sale of Other Notes.
	
5

	
 
	
4.7.
	
Payment of Special Counsel Fees.
	
5

	
 
	
4.8.
	
Private Placement Numbers.
	
6

	
 
	
4.9.
	
Changes in Corporate Structure.
	
6

	
 
	
4.10.
	
Subsidiary Guaranty.
	
6

	
 
	
4.11.
	
Proceedings and Documents.
	
6

	
5
	
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
	
6

	
 
	
5.1.
	
Organization; Power and Authority.
	
7

	
 
	
5.2.
	
Authorization, etc.
	
7

	
 
	
5.3.
	
Disclosure.
	
8

	
 
	
5.4.
	
Organization and Ownership of Shares of Subsidiaries; 
	
8

	
 
	
 
	
Affiliates.
	
 

	
 
	
5.5.
	
Financial Statements.
	
9

	
 
	
5.6.
	
Compliance with Laws, Other Instruments, etc.
	
9

	
 
	
5.7.
	
Governmental Authorizations, etc.
	
10

	
 
	
5.8.
	
Litigation; Observance of Agreements, Statutes and Orders.
	
10

	
 
	
5.9.
	
Taxes.
	
10

	
 
	
5.10.
	
Title to Property; Leases.
	
10

	
 
	
5.11.
	
Licenses, Permits, etc.
	
11

	
 
	
5.12.
	
Compliance with ERISA.
	
11

	
 
	
5.13.
	
Private Offering by the Company.
	
12

	
 
	
5.14.
	
Use of Proceeds; Margin Regulations.
	
13

	
 
	
5.15.
	
Existing Debt; Future Liens.
	
13

	
 
	
5.16.
	
Foreign Assets Control Regulations, etc.
	
13

	
 
	
5.17.
	
Status under Certain Statutes.
	
14

	
 
	
5.18.
	
Environmental Matters.
	
14

	
6
	
REPRESENTATIONS OF THE PURCHASER.
	
14

	
 
	
6.1.
	
Purchase for Investment.
	
14

	
 
	
6.2.
	
Legend.
	
15

	
 
	
6.3.
	
ERISA.
	
15

	
 
	
6.4.
	
Organization; Power and Authority; Compliance with Laws.
	
17

	
 
	
6.5.
	
Authorization, etc.
	
17

	
7
	
INFORMATION AS TO COMPANY.
	
17

	
 
	
7.1.
	
Financial and Business Information.
	
17

	
 
	
7.2.
	
Officer's Certificate.
	
21

	
 
	
7.3.
	
Inspection.
	
22

	
8
	
PREPAYMENT OF THE NOTES
	
22

	
 
	
8.1.
	
Required Prepayments.
	
22

	
 
	
8.2.
	
Optional Prepayments with Make-Whole Amount; 
	
23

	
 
	
 
	
Rescission.
	
 

	
 
	
8.3.
	
Allocation of Partial Prepayments.
	
24

	
 
	
8.4.
	
Maturity; Surrender, etc.
	
24

	
 
	
8.5.
	
Purchase of Notes.
	
24

	
 
	
8.6.
	
Make-Whole Amount.
	
25

	
9
	
AFFIRMATIVE COVENANTS.
	
26

	
 
	
9.1.
	
Compliance with Law.
	
26

	
 
	
9.2.
	
Insurance.
	
26

	
 
	
9.3.
	
Maintenance of Properties.
	
26

	
 
	
9.4.
	
Payment of Taxes and Claims.
	
27

	
 
	
9.5.
	
Corporate Existence, etc.
	
27

	
 
	
9.6.
	
Pari Passu.
	
28

	
 
	
9.7.
	
Subsidiary Guaranty.
	
28

	
10
	
NEGATIVE COVENANTS.
	
28

	
 
	
10.1.
	
Net Worth.
	
28

	
 
	
10.2.
	
Interest Coverage.
	
28

	
 
	
10.3.
	
Debt Incurrence.
	
29

	
 
	
10.4.
	
Liens.
	
29

	
 
	
10.5.
	
Mergers and Consolidations.
	
32

	
 
	
10.6.
	
Sale of Assets.
	
33

	
 
	
10.7.
	
Restricted Payments and Restricted Investments.
	
35

	
 
	
10.8.
	
Limitations on Certain Restricted Subsidiary Actions.
	
36

	
 
	
10.9.
	
Affiliate Transactions.
	
37

	
 
	
10.10.
	
Line of Business.
	
37

	
11
	
EVENTS OF DEFAULT.
	
38

	
12
	
REMEDIES ON DEFAULT, ETC.
	
39

	
 
	
12.1.
	
Acceleration.
	
39

	
 
	
12.2.
	
Other Remedies.
	
40

	
 
	
12.3.
	
Rescission.
	
40

	
 
	
12.4.
	
No Waivers or Election of Remedies, Expenses, etc.
	
41

	
13
	
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
	
41

	
 
	
13.1.
	
Registration of Notes.
	
41

	
 
	
13.2.
	
Transfer and Exchange of Notes.
	
41

	
 
	
13.3.
	
Replacement of Notes.
	
42

	
14
	
PAYMENTS ON NOTES.
	
42

	
 
	
14.1.
	
Place of Payment.
	
42

	
 
	
14.2.
	
Home Office Payment.
	
42

	
15
	
EXPENSES, ETC.
	
43

	
 
	
15.1.
	
Transaction Expenses.
	
43

	
 
	
15.2.
	
Survival.
	
43

	
16
	
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
	
43

	
 
	
AGREEMENT.
	
 

	
17
	
AMENDMENT AND WAIVER.
	
44

	
 
	
17.1.
	
Requirements.
	
44

	
 
	
17.2.
	
Solicitation of Holders.
	
44

	
 
	
17.3.
	
Binding Effect, etc.
	
45

	
 
	
17.4.
	
Notes held by Company, etc.
	
45

	
18
	
NOTICES.
	
45

	
19
	
REPRODUCTION OF DOCUMENTS.
	
46

	
20
	
CONFIDENTIAL INFORMATION.
	
46

	
21
	
SUBSTITUTION OF PURCHASER.
	
47

	
22
	
MISCELLANEOUS.
	
48

	
 
	
22.1.
	
Successors and Assigns.
	
48

	
 
	
22.2.
	
Payments Due on Non-Business Days.
	
48

	
 
	
22.3.
	
Severability.
	
48

	
 
	
22.4.
	
Construction.
	
48

	
 
	
22.5.
	
Counterparts.
	
48

	
 
	
22.6.
	
Governing Law.
	
49

	
 
	
22.7.
	
Consent to Jurisdiction; Appointment of Agent.
	
49

	
 
	
22.8.
	
Defeasance.
	
50

	
 
	
22.9.
	
GAAP.
	
52

	
 
	
22.10.
	
Usury.
	
53

 

 

SCHEDULES & EXHIBITS

	
SCHEDULE A
	
--
	
Information Relating To Purchasers

	
SCHEDULE B
	
--
	
Defined Terms

	
 
	
 
	
 

	
SCHEDULE 4.9
	
--
	
Changes in Corporate Structure

	
SCHEDULE 5.4
	
--
	
Subsidiaries of the Company and Ownership of Subsidiary Stock

	
SCHEDULE 5.5
	
--
	
Financial Statements

	
SCHEDULE 5.8
	
--
	
Certain Litigation

	
SCHEDULE 5.11
	
--
	
Patents, etc.

	
SCHEDULE 5.12
	
--
	
ERISA

	
SCHEDULE 5.15
	
--
	
Existing Debt

	
SCHEDULE 10.8
	
--
	
Certain Agreements by Restricted Subsidiaries

	
 
	
 
	
 

	
EXHIBIT A
	
--
	
Subordination Terms

	
 
	
 
	
 

	
EXHIBIT 1G
	
--
	
Form of 7.04% Series G Senior Note due October 15, 2006

	
EXHIBIT 1H
	
--
	
Form of 7.19% Series H Senior Note due October 15, 2008

	
EXHIBIT 1I
	
--
	
Form of 7.34% Series I Senior Note due October 15, 2011

	
 
	
 
	
 

	
EXHIBIT 4.4(a)
	
--
	
Form of Opinion of Special Counsel for the Company

	
EXHIBIT 4.4(b)
	
-- 
	
Form of Opinion of Special Counsel for the Purchasers

	
 
	
 
	
 

	
EXHIBIT 4.10 
	
--
	
Form of Subsidiary Guaranty

 

SEITEL, INC.

West Building, 7th Floor

50 Briar Hollow Lane

Houston, Texas 77027

$20,000,000 7.04% Series G Senior Notes Due October 15, 2006

$50,000,000 7.19% Series H Senior Notes Due October 15, 2008

$37,000,000 7.34 % Series I Senior Notes Due October 15, 2011

 

As of October 15, 2001

Separately Addressed to each of the 

Purchasers Listed on Schedule A hereto

Ladies and Gentlemen:

     SEITEL, INC., a Delaware corporation (together with any Person who succeeds to all, or substantially all, of the assets and business of Seitel, Inc., the "Company"), agrees with you as follows:

	
1.     
	
AUTHORIZATION OF NOTES.

	
 
	
 

	
 
	
The Company will authorize the issue and sale of

	
 
	
 
	
 

	
 
	
(a)
	
Twenty Million Dollars ($20,000,000) aggregate principal amount of its seven and four hundredths percent (7.04%) series g senior notes due october 15, 2006 (the "series g notes," such term to include any such notes issued in substitution therefor pursuant to section 13 of this agreement or the other agreements (as hereinafter defined)),

	
 
	
 
	
 

	
 
	
(b)
	
Fifty Million Dollars ($50,000,000) aggregate principal amount of its seven and nineteen hundredths percent (7.19%) Series H Senior Notes due October 15, 2008 (the "Series H Notes," such term to include any such notes issued in substitution therefor pursuant to Section 13 of this Agreement or the Other Agreements), and

	
 
	
 
	
 

	
 
	
(c)
	
Thirty-Seven Million Dollars ($37,000,000) aggregate principal amount of its seven and thirty-four hundredths percent (7.34%) Series I Senior Notes due October 15, 2011 (the "Series I Notes," such term to include any such notes issued in substitution therefor pursuant to Section 13 of this Agreement or the Other Agreements).

	
 
	
The Series G Notes shall be substantially in the form set out in Exhibit 1G, the Series H Notes shall be substantially in the form set out in Exhibit 1H, and the Series I Notes shall be substantially in the form set out in Exhibit 1I, in each case, with such changes therefrom, if any, as may be approved by you and the Company (the Series G Notes, the Series H Notes and the Series I Notes are herein referred to collectively as the "Notes," and each individually as a "Note"). Certain capitalized terms used in this Agreement are defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

	
 
	
 
	
 

	
2.
	
SALE AND PURCHASE OF NOTES.

	
 
	
 

	
 
	
Subject to the terms and conditions of this Agreement, the Company will issue and sell to you and you will purchase from the Company, in accordance with the provisions hereof, at the Closings provided for in Section 3, Notes of the Series and in the principal amounts specified opposite your name in Schedule A at the purchase price of one hundred percent (100%) of the principal amount thereof; provided, however, that you may change such information on Schedule A (other than the aggregate principal amount of your commitment) by written notice delivered to the Company prior to the applicable Closing (except that one or more (but not more than three) of your Affiliates shall be the purchaser or purchasers of the principal amount of the Notes specified opposite your name on Schedule A). Contemporaneously with entering into this Agreement, the Company is entering into separate Note Purchase Agreements (the "Other Agreements") identical with this Agreement with each of the other purchasers named in Schedule A (the "Other Purchasers"), providing for the sale at the Closings to each of the Other Purchasers of Notes of the Series and in the principal amounts specified opposite its name in Schedule A. Your obligation hereunder and the obligations of the Other Purchasers under the Other Agreements are several and not joint obligations and you shall have no obligation under any Other Agreement and no liability to any Person for the performance or non-performance by any Other Purchaser thereunder.

	
 
	
 

	
3.
	
CLOSINGS.

	
 
	
 

	
 
	
3.1
	
First Closing.

	
 
	
 
	
 

	
 
	
 
	
The sale and purchase of the Notes to be purchased by the purchasers listed on Schedule A hereto (the "Purchasers") shall occur at the offices of Bingham Dana LLP, One State Street, Hartford, Connecticut 06103, at 10:00 a.m., eastern standard time, at a closing (the "First Closing") on October 15, 2001 (the "First Closing Date"). At the First Closing the Company will deliver to each Purchaser the Notes to be purchased by it in the form of, respectively, a single Series G Note, Series H Note, or Series I Note, as the case may be (or such greater number of Series G Notes, Series H Notes, or Series I Notes, in denominations of at least Twenty-Five Thousand Dollars ($25,000) as such Purchaser may request), dated the First Closing Date and registered in its name (or in the name of its nominee) as indicated on Schedule A, against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number 314102 at Southwest Bank of Texas, 5 Post Oak Park, 4400 Post Oak Parkway, Houston, Texas 77027, ABA# 113011258.

	
 
	
 

	
 
	
3.2
	
Notice of Second Closing; Second Closing

	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Notice of Second Closing. Subsequent to the date hereof, the Company shall deliver to the Purchasers an irrevocable written notice specifying a date no later than December 27, 2001 as the date of purchase of $25,000,000 in aggregate amount of the Notes (the "Second Closing Date," the First Closing Date and the Second Closing Date being sometimes referred to herein, individually, as a "Closing Date"). Such notice shall be given not less than 15 nor more than 45 days prior to the Second Closing Date.

	
 
	
 
	
 

	
 
	
 
	
(b)
	
Second Closing. The sale and purchase of the Notes to be purchased by the Purchasers listed on Schedule A hereto on the Second Closing Date shall occur at the offices of Bingham Dana LLP, One State Street, Hartford, Connecticut 06103, at 10:00 a.m., eastern standard time, at a closing (the "Second Closing," the First Closing and the Second Closing being sometimes referred to herein collectively as the "Closings" and individually as a "Closing") on the Second Closing Date. At the Second Closing the Company will deliver to each Purchaser the Notes to be purchased by it in the form of, respectively, a Series G Note, Series H Note or Series I Note, as the case may be (or such greater number of Series G Notes, Series H Notes or Series I Notes in denominations of at least $25,000 as Purchaser may request), dated the Second Closing Date, and registered in its name (or in the name of its nominee), as indicated in Schedule A, against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number 314102 at Southwest Bank of Texas, 5 Post Oak Park, 4400 Post Oak Parkway, Houston, Texas 77027, ABA# 113011258.

	
 
	
 
	
 

	
 
	
3.3
	
Failure of the Company to Deliver.

	
 
	
 

	
 
	
 
	
If on either Closing Date the Company fails to tender to you the Notes to be acquired by you on such date or if the conditions specified in Section 4 have not been fulfilled to your satisfaction on either such Closing Date, you may thereupon elect to be relieved of all further obligations under this Agreement with respect to the Notes to be purchased by you on such date. In addition, if such tender shall not be made to you on the Second Closing Date, or if the conditions specified in Section 4 have not been fulfilled on such date, the Company shall pay to you a Make-Whole Amount with respect to the Notes to be purchased by you on such date, determined as if such Notes had been purchased and declared to be due and payable on such date. Nothing in this Section shall operate to relieve the Company from any of its obligations under this Agreement or to waive any of your rights against the Company.

	
 
	
 

	
 
	
3.4
	
Failure by You to Deliver.

	
 
	
 

	
 
	
 
	
If on either Closing Date you fail to deliver the full amount of funds to be delivered by you on such date or if the conditions specified in Section 4A have not been fulfilled on such date, the Company may thereupon elect to return immediately any funds delivered by you on such date and to be relieved of all further obligations under this Agreement with respect to the Notes to be purchased by you on such date. Except as described herein and in accordance with applicable law, nothing in this Section shall operate to relieve you from any of your obligations to the Company under this Agreement or to waive any of the Company's rights against you.

	
 
	
 

	
4.
	
YOUR CONDITIONS TO CLOSINGS.

	
 
	
 

	
 
	
Your obligation to purchase and pay for the Notes to be sold to you on each Closing Date is subject to the fulfillment to your satisfaction, prior to or on such Closing Date (except as otherwise specified), of the following conditions:

	
 
	
 
	
 

	
 
	
4.1.
	
Representations and Warranties.

	
 
	
 
	
 

	
 
	
 
	
The representations and warranties of the Company in this Agreement shall be true and correct when made and on such Closing Date.

	
 
	
 
	
 

	
 
	
4.2
	
Performance; No Default.

	
 
	
 
	
 

	
 
	
 
	
The Company shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or on such Closing Date and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Schedule 5.14), no Default or Event of Default shall have occurred and be continuing.

	
 
	
 
	
 

	
 
	
4.3
	
Compliance Certificates.

	
 
	
 
	
 

	
 
	
 
	
(a)
	
Officer's Certificate

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
The Company shall have delivered to you an Officer's Certificate, dated such Closing Date, certifying that the conditions specified in Sections 4.1 and 4.2 have been fulfilled.

	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Company Secretary's Certificate

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
The Company shall have delivered to you a certificate, dated such Closing Date, signed by the Secretary or an Assistant Secretary of the Company, and certifying as to the resolutions, the bylaws and the certificate of incorporation attached thereto and as to other corporate proceedings relating to the authorization, execution and delivery of the Notes, this Agreement and any other agreement or instrument related thereto.

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Secretary's Certificates of Restricted Subsidiaries.

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Each Restricted Subsidiary shall have delivered to you a certificate dated such Closing Date (separately executed or executed jointly by one or more Restricted Subsidiaries), signed by the Secretary or an Assistant Secretary of such Restricted Subsidiary, and certifying as to the resolutions, the bylaws and the certificate or articles of incorporation of such Restricted Subsidiary attached thereto and as to other corporate proceedings relating to the authorization, execution and delivery by such Restricted Subsidiary of the Subsidiary Guaranty.

	
 
	
 
	
 
	
 

	
 
	
4.4.
	
Opinions of Counsel.

	
 
	
 
	
 
	
 

	
 
	
 
	
You shall have received from

	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Andrews & Kurth Mayor Day Caldwell & Keeton, L.L.P., counsel for the Company and the Restricted Subsidiaries, and

	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Bingham Dana LLP, your special counsel,

	
 
	
 
	
 
	
 

	
closing opinions satisfactory to you in form, scope and substance, each dated as of such Closing Date, substantially in the respective forms set forth in Exhibits 4.4(a) and 4.4(b), and opining as to such other matters as you may reasonably request. This Section 4.4 shall constitute direction by the Company to such counsel named in the immediately preceding subsection (a) to deliver such closing opinion to you.

	
 
	
 
	
 
	
 

	
 
	
4.5.
	
Purchases Permitted By Applicable Law, etc.

	
 
	
 
	
 
	
 

	
 
	
 
	
On such Closing Date your purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which you are subject, without recourse to provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject you to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by you, you shall have received an Officer's Certificate certifying as to such matters of fact as you may reasonably specify to enable you to determine whether such purchase is so permitted.

	
 
	
 
	
 
	
 

	
 
	
4.6
	
Sale of Other Notes.

	
 
	
 
	
 
	
 

	
 
	
 
	
Contemporaneously with such Closing, the Company shall sell to the Other Purchasers and the Other Purchasers shall purchase the Notes to be purchased by them at such Closing as specified in Schedule A.

	
 
	
 
	
 
	
 

	
 
	
4.7.
	
Payment of Special Counsel Fees.

	
 
	
 
	
 
	
 

	
 
	
 
	
Without limiting the provisions of Section 15.1, the Company shall have paid on or before such Closing the fees, charges and disbursements of your special counsel referred to in Section 4.4(b) to the extent reflected in a statement of such counsel rendered to the Company at least one (1) Business Day prior to such Closing.

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
4.8.
	
Private Placement Numbers.

	
 
	
 
	
 

	
 
	
 
	
Private Placement numbers issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities Valuation Office of the National Association of Insurance Commissioners) shall have been obtained for each Series.

	
 
	
 
	
 
	
 

	
 
	
4.9
	
Changes in Corporate Structure.

	
 
	
 
	
 
	
 

	
 
	
 
	
Except as specified in Schedule 4.9, the Company shall not have changed its jurisdiction of incorporation or been a party to any merger or consolidation and shall not have succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.

	
 
	
 
	
 
	
 

	
 
	
4.10
	
Subsidiary Guaranty.

	
 
	
 
	
 
	
 

	
 
	
 
	
You shall have received the Guaranty, duly executed and delivered by each Restricted Subsidiary, substantially in the form of Exhibit 4.10 (the "Subsidiary Guaranty"), satisfactory to you in form and substance, which Guaranty shall be in full force and effect.

	
 
	
 
	
 
	
 

	
 
	
4.11.
	
Proceedings and Documents.

	
 
	
 
	
 
	
 

	
 
	
 
	
All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be reasonably satisfactory to you and your special counsel, and you and your special counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request.

	
 
	
 
	
 
	
 

	
4.A.
	
COMPANY'S CLOSING CONDITIONS.

	
 
	
 
	
 

	
 
	
The Company's obligation to sell the Notes to be purchased by you on each Closing Date is subject to the fulfillment to the Company's satisfaction, prior to or on such Closing Date (except as otherwise specified), of the following conditions:

	
 
	
 
	
 
	
 

	
 
	
4A.1.
	
Representations and Warranties.

	
 
	
 
	
 
	
 

	
 
	
 
	
The representations and warranties made by you in Section 6 shall be correct when made and on such Closing Date.

	
 
	
 
	
 
	
 

	
 
	
4A.2.
	
Sales Permitted by Applicable Law, etc.

	
 
	
 
	
On such Closing Date the Company's sale of the Notes and the granting of the Subsidiary Guaranty by the Restricted Subsidiaries shall (a) be permitted by the laws and regulations of each jurisdiction to which the Company and the Restricted Subsidiaries are subject, and (b) not violate any applicable law or regulation.

	
 
	
 
	
 
	
 

	
5.
	
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

	
 
	
 
	
 
	
 

	
The Company represents and warrants to you that:

	
 
	
 
	
 
	
 

	
 
	
5.1
	
Organization; Power and Authority.

	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
The Company

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware;

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
has the corporate power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the Other Agreements and the Notes and to perform the provisions hereof and thereof.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Each Subsidiary

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization;

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, and, in the case of the Restricted Subsidiaries, to execute and deliver the Subsidiary Guaranty and to perform the provisions hereof and thereof.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.2
	
Authorization, etc.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
This Agreement and the Other Agreements and the Notes have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
The Subsidiary Guaranty has been duly authorized by all necessary corporate, partnership or limited liability company action on the part of each Restricted Subsidiary and constitutes a legal, valid and binding obligation of each Restricted Subsidiary enforceable against such Restricted Subsidiary in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

	
 
	
 
	
 
	
 
	
 

	
 
	
5.3
	
Disclosure.

	
 
	
 
	
 
	
 
	
 

	
 
	
The Company, through its agent, Banc One Capital Markets, Inc., has delivered to you and each Other Purchaser a copy of a Confidential Private Placement Memorandum, dated August 2001 (the "Memorandum"), relating to the transactions contemplated hereby. The Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Company and the Subsidiaries. This Agreement, the Memorandum, the documents, certificates or other writings delivered to you by or on behalf of the Company in connection with the transactions contemplated hereby and the financial statements listed in Schedule 5.5, taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. All projections and forward-looking statements contained in the Memorandum are based upon assumptions that the Company believes to be reasonable and were made in good faith, although no assurances can be given that the results set forth in such projections or forward-looking statements will be achieved. Except as disclosed in the Memorandum or in the financial statements listed in Schedule 5.5, since December 31, 2000, there has been no change in the financial condition, operations, business, properties or prospects of the Company or any Subsidiary except changes that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Memorandum or in the other documents, certificates and other writings delivered to you by or on behalf of the Company specifically for use in connection with the transactions contemplated hereby.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.4
	
Organization and Ownership of Shares of Subsidiaries; Affiliates.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Schedule 5.4 contains (except as noted therein) complete and correct lists of (i) the Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the jurisdiction of its organization and the percentage of shares of each class of its outstanding capital stock or similar equity interests owned by the Company and each other Subsidiary, and whether such Subsidiary is a Restricted Subsidiary, and (ii) the Company's Affiliates (other than Subsidiaries).

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
All of the outstanding shares of capital stock or similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company and the Subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
No Restricted Subsidiary is a party to, or otherwise subject to any legal restriction or any agreement (other than this Agreement, the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law statutes) restricting the ability of such Restricted Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of the Restricted Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Restricted Subsidiary.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.5.
	
Financial Statements.

	
 
	
 
	
 
	
 
	
 

	
 
	
The Company has delivered to each Purchaser copies of the financial statements of the Company and the Subsidiaries listed on Schedule 5.5. All of said financial statements (including in each case the related schedules and notes) present fairly, in all material respects, the consolidated financial position of the Company and the Subsidiaries as of the respective dates specified in such Schedule and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments).

	
 
	
 
	
 
	
 
	
 

	
 
	
5.6
	
Compliance with Laws, Other Instruments, etc.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
Neither the execution, delivery and performance by the Company of this Agreement and the Notes, nor the execution, delivery and performance by any Restricted Subsidiary of the Subsidiary Guaranty, will (a) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Company or any Restricted Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which the Company or any Restricted Subsidiary is bound or by which the Company or any Restricted Subsidiary or any of their respective properties may be bound or affected, (b) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Company or any Restricted Subsidiary or (c) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Company or any Restricted Subsidiary.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.7
	
Governmental Authorizations, etc.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance (a) by the Company of this Agreement or the Notes or (b) by any Restricted Subsidiary of the Subsidiary Guaranty.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.8
	
Litigation; Observance of Agreements, Statutes and Orders.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Except as disclosed in Schedule 5.8, there are no actions, suits or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary or any property of the Company or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Neither the Company nor any Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.9
	
Taxes.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
The Company and the Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (a) the amount of which is not individually or in the aggregate Material or (b) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Company and the Subsidiaries in respect of Federal, state or other taxes for all fiscal periods are adequate. The Federal income tax liabilities of the Company and the Subsidiaries have been determined by the Internal Revenue Service and paid for all fiscal years up to and including the fiscal year ended December 31, 1996.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.10.
	
Title to Property; Leases.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
The Company and the Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by the Company or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.11.
	
Licenses, Permits, etc.

	
 
	
 
	
 
	
 
	
 

	
 
	
Except as disclosed in Schedule 5.11,

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
the Company and the Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, service marks, trademarks and trade names, or rights thereto, with respect to the business of the Company and/or any Subsidiary as currently conducted, that individually or in the aggregate are Material, without known conflict with the rights of others;

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
to the best knowledge of the Company, no product of the Company or any Subsidiary infringes in any material respect upon any license, permit, franchise, authorization, patent, copyright, service mark, trademark, trade name or other right owned by any other Person; and

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
to the best knowledge of the Company, there is no violation by any Person of any right of the Company or any Subsidiary with respect to any patent, copyright, service mark, trademark, trade name or other right owned or used by the Company or any Subsidiary which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.12.
	
Compliance with ERISA.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in Section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens as would not be individually or in the aggregate Material.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan's most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan's most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities. The term "benefit liabilities" has the meaning specified in section 4001 of ERISA and the terms "current value" and "present value" have the meaning specified in section 3 of ERISA.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
The expected postretirement benefit obligation (determined as of the last day of the Company's most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and the Restricted Subsidiaries is not Material.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(e)
	
The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of your representation in Section 6.3 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by you.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(f)
	
Schedule 5.12 lists all ERISA Affiliates that are Subsidiaries and that maintain one or more Plans and any employee organizations in respect of any Multiemployer Plan or Plan. Schedule 5.12 sets forth all ERISA Affiliates and all "employee benefit plans" with respect to which the Company or any "affiliate" of the Company is a "party-in-interest" or in respect of which the Notes could constitute an "employer security" ("employee benefit plan," "party-in-interest" and "employee organization" have the meanings specified in section 3 of ERISA, "affiliate" has the meaning specified in section 407(d) of ERISA and Section V of the Department of Labor Prohibited Transaction Exemption 95-60 (60 FR 35925, July 12, 1995) and "employer security" has the meaning specified in section 407(d) of ERISA)

	
 
	
 
	
 
	
 
	
 

	
 
	
5.13.
	
Private Offering by the Company

	
 
	
 
	
 
	
 
	
 

	
 
	
Neither the Company nor anyone acting on its behalf has offered the Notes or any similar Securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than you, the Other Purchasers and not more than 47 other Institutional Investors, each of which has been offered the Notes at a private sale for investment pursuant to a valid exemption from the registration requirements of Section 5 of the Securities Act. In reliance upon the accuracy of your representations and warranties and the representations and warranties of the Other Purchasers, neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.14.
	
Use of Proceeds; Margin Regulations.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
The Company will apply the proceeds of the sale of the Notes to refinance existing Debt and to fund capital expenditures primarily associated with the acquisition of seismic data and investment in working interests of exploration and production projects. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than one percent (1%) of the value of the consolidated assets of the Company and the Subsidiaries and the Company does not have any present intention that margin stock will constitute more than five percent (5%) of the value of such assets. As used in this Section, the terms "margin stock" and "purpose of buying or carrying" shall have the meanings assigned to them in said Regulation U.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.15.
	
Existing Debt; Future Liens.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Debt (in excess of $100,000 outstanding) of the Company and the Subsidiaries as of September 30, 2001, since which date there has been no material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Debt of the Company or the Subsidiaries. Neither the Company nor Subsidiary is in default, and no waiver of default is currently in effect, in the payment of any principal of or interest on any Debt of the Company or such Subsidiary and no event or condition exists with respect to any Debt of the Company or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Debt to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Except as disclosed in Schedule 5.15, neither the Company nor any Restricted Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by Section 10.4.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.16.
	
Foreign Assets Control Regulations, etc.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
Neither the sale of the Notes by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.17.
	
Status under Certain Statutes.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
Neither the Company nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Transportation Acts (49 U.S.C.), as amended, or the Federal Power Act, as amended.

	
 
	
 
	
 
	
 
	
 

	
 
	
5.18.
	
Environmental Matters.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no action or proceeding of any kind has been instituted raising any claim against the Company or any of the Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect. Except as otherwise disclosed to you in writing,

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
neither the Company nor any of the Subsidiaries has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect;

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
neither the Company nor any of the Subsidiaries has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them or has disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that could reasonably be expected to result in a Material Adverse Effect; and

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
all buildings on all real properties now owned, leased or operated by the Company or any of the Subsidiaries are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect.

	
 
	
 
	
 
	
 
	
 

	
6.
	
REPRESENTATIONS OF THE PURCHASER.

	
 
	
 
	
 
	
 
	
 

	
 
	
6.1.
	
Purchase for Investment.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
You represent that you are purchasing the Notes for your own account or for one or more separate accounts maintained by you or for the account of one or more pension or trust funds and not with a view to the distribution thereof or with any present intention of offering or selling any of the Notes in a transaction that would violate the Securities Act or the securities laws of any State of the United States or any other applicable jurisdiction, provided that the disposition of your or their property shall at all times be within your or their control. You represent and warrant that you and any Person for whose account you are purchasing the Notes are either a Qualified Institutional Buyer or an Accredited Institution, in either case with such knowledge and experience in financial and business matters as are necessary in order to evaluate the merits and risks of an investment in the Notes. You also understand that the Company and, for purposes of the opinions to be delivered to you pursuant to Section 4.4, counsel to the Company and your special counsel, will rely upon the accuracy and truth of the foregoing representations and you hereby consent to such reliance. You understand that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.

	
 
	
 
	
 
	
 
	
 

	
 
	
6.2.
	
Legend.

	
 
	
 
	
 
	
 
	
 

	
 
	
You agree that the Notes shall contain the following legend:

	
 
	
 
	
 
	
 
	
 

	
 
	
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY ONLY BE REOFFERED AND SOLD IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION THEREFROM."

	
 
	
 
	
 
	
 
	
 

	
The legend requirements imposed by this Section 6.2 shall cease and terminate as to any particular Note if the Notes represented thereby have been:

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
effectively registered under the Securities Act (the Company having no obligation to effect the registration of such Notes) and disposed of in accordance with the registration statement covering such Notes,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, or

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
otherwise transferred in accordance herewith and the subsequent disposition of such Notes shall not require the registration or qualification of such Notes under the Securities Act or any similar state law then in force.

	
 
	
 
	
 
	
 
	
 

	
Whenever such restrictions shall terminate as to any Notes, the holder thereof shall be entitled to receive from the Company, without expense to such holder (except for stamp taxes or governmental charges, if any, payable in connection with a transfer of such Notes, as required by Section 13.2), a new Note of like tenor not bearing the legend set forth in this Section 6.2.

	
 
	
 
	
 
	
 

	
 
	
6.3.
	
ERISA.

	
 
	
 
	
 

	
 
	
You represent:

	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
if you are acquiring the Notes for your own account with funds from or attributable to your general account, and in reliance upon the Company's representations set forth in Section 5.12 and the related disclosures set forth in Schedule 5.12, that the amount of the reserves and liabilities for the general account contracts (as defined by the annual statement for life insurance companies approved by the National Association of Insurance Commissioners (the "NAIC Annual Statement")) held by or on behalf of any Plan together with the amount of the reserves and liabilities for the general account contracts held by or on behalf of any other Plans maintained by the same employer (or affiliate thereof, as such term is defined in section V of DOL Prohibited Transaction Exemption 95-60 (60 FR 35925, July 12, 1995)) or by the same employee organization (as defined in ERISA) in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with the state of domicile of the insurance company; for purposes of the percentage limitation in this clause (a), the amount of reserves and liabilities for the general account contracts held by or on behalf of a Plan shall be determined before reduction for credits on account of any reinsurance ceded on a coinsurance basis; or

	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
if any part of the funds being used by you to purchase the Notes shall come from assets of an employee benefit plan (as defined in section 3 of ERISA) or a plan (as defined in section 4975(e)(1) of the Code), that:

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
if such funds are attributable to a "separate account" (as defined in section 3 of ERISA), then

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(A)
	
all requirements for an exemption under DOL Prohibited Transaction Exemption 90-1 (issued January 29, 1990) are met with respect to the use of such funds to purchase the Notes, or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(B)
	
the employee benefit plans with an interest in such separate account have been identified in a writing delivered by you to the Company;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
if such funds are attributable to a "separate account" (as defined in section 3 of ERISA) that is maintained solely in connection with fixed contracted obligations of an insurance company, any amounts payable, or credited, to any employee benefit plan having an interest in such account and to any participant or beneficiary of such plan (including an annuitant) are not affected in any manner by the investment performance of the separate account;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
if such funds are attributable to an "investment fund" managed by a "qualified plan asset manager" (as such terms are defined in Part V of DOL Prohibited Transaction Exemption 84-14, issued March 13, 1984), all requirements for an exemption under such Exemption are met with respect to the use of such funds to purchase the Notes; or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iv)
	
such employee benefit plan is excluded from the provisions of section 406 of ERISA by virtue of section 4(b) of ERISA.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
6.4.
	
Organization; Power and Authority; Compliance with Laws.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
You represent and warrant that:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
you are a corporation duly organized, validly existing, and in good standing under the laws of the state of your incorporation,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
you have the corporate power and authority to execute and deliver this Agreement and to perform the provisions hereof, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
the execution, delivery and performance of this Agreement by you will not violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to you.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
6.5.
	
Authorization, etc.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
You represent and warrant that this Agreement has been duly authorized by all necessary corporate action on your part, and this Agreement constitutes your legal, valid and binding obligation enforceable against you in accordance with its terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

	
 
	
 
	
 
	
 
	
 
	
 

	
7.
	
INFORMATION AS TO COMPANY.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
7.1.
	
Financial and Business Information.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
The Company shall deliver to each holder that is an Institutional Investor:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Quarterly Statements -- within forty-five (45) days after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
consolidated balance sheets of the Company and its consolidated Subsidiaries, and of the Company and its Restricted Subsidiaries, as at the end of such quarter, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
consolidated statements of operations, stockholders' equity and cash flows of the Company and its consolidated Subsidiaries, and of the Company and its Restricted Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,

	
 
	
 
	
 
	
 
	
 
	
 

	
setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that, so long as the Company shall not have any Unrestricted Subsidiaries, delivery within the time period specified above of copies of the Company's Quarterly Report on Form 10-Q prepared in compliance with the requirements therefor and filed with the Securities and Exchange Commission shall be deemed to satisfy the requirements of this Section 7.1(a);

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Annual Statements -- within ninety (90) days after the end of each fiscal year of the Company, duplicate copies of,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
a consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of such year,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
consolidated statements of operations, stockholders' equity and cash flows of the Company and its consolidated Subsidiaries for such year, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
a condensed consolidating balance sheet, and condensed consolidating statements of operations and cash flows of the Company and its Subsidiaries setting forth, in each case, consolidating information sufficient to show the financial position and results of operations and cash flows of the Company and the Restricted Subsidiaries,

	
 
	
 
	
 
	
 
	
 
	
 

	
setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(A)
	
in the case of the financial statements identified in the foregoing clauses (i) and (ii), an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(B)
	
a certificate of such accountants stating that they have reviewed this Agreement and stating further whether, in making their audit, they have become aware of any condition or event that then constitutes a Default or an Event of Default, and, if they are aware that any such condition or event then exists, specifying the nature and period of the existence thereof (it being understood that such accountants shall not be liable, directly or indirectly, for any failure to obtain knowledge of any Default or Event of Default unless such accountants should have obtained knowledge thereof in making an audit in accordance with generally accepted auditing standards or did not make such an audit),

	
 
	
 
	
 
	
 
	
 
	
 

	
provided that, so long as the Company shall not have any Unrestricted Subsidiaries, the delivery within the time period specified above of the Company's Annual Report on Form 10-K for such fiscal year (together with the Company's annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission, together with the accountants' certificates described in clauses (A) and (B) above, shall be deemed to satisfy the requirements of this Section 7.1(b);

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
SEC and Other Reports -- promptly upon their becoming available, one copy of

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
each financial statement, report, notice or proxy statement sent by the Company or any Restricted Subsidiary to public securities holders generally, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
(A)
	
each regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder), and each prospectus and all amendments thereto filed by the Company or any Restricted Subsidiary with the Securities and Exchange Commission; and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(B)
	
by facsimile or e-mail, all press releases and other statements made available generally by the Company or any Restricted Subsidiary to the public concerning developments that are Material;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
Audit Reports - as soon as practicable after receipt thereof by the Company or any Subsidiary, a copy of each other report submitted to the Company or any Subsidiary by its independent accountants in connection with any interim or special audit made by them of the books of the Company or any Subsidiary;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(e)
	
Litigation -- within five (5) days after the Company obtains knowledge thereof, written notice of any pending or threatened (in writing) (i) litigation not fully covered by insurance or as to which an insurance company has not accepted liability or (ii) governmental proceeding, in each case against the Company or any Restricted Subsidiary, in which the damages sought exceed One Million Dollars ($1,000,000), individually or in the aggregate, or which otherwise could reasonably be expected to have a Material Adverse Effect;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(f)
	
Notice of Default or Event of Default -- promptly, and in any event within five (5) days after a Responsible Officer shall become aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(g)
	
Oil and Gas Reserve Reports -- promptly, and in any event no later than April 1 in each year, engineering reports in form and substance reasonably satisfactory to the Required Holders, certified by Garb Grubb Harris & Associates, Inc. (or any other nationally or regionally recognized independent consulting petroleum engineers) as fairly and accurately setting forth

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
the proven and producing, shut-in, behind-pipe, and undeveloped oil and gas reserves (separately classified as such) of the Company and its Restricted Subsidiaries as of January 1 of the year for which such reserve reports are furnished,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
the aggregate present value of the future net income with respect to such reserves discounted at a stated per annum annual discount rate,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
projections of the annual rate of production, gross income, and net income with respect to such proven and producing reserves, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iv)
	
information with respect to the "take-or-pay," "prepayment," and gas-balancing liabilities of the Company and its Restricted Subsidiaries;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(h)
	
ERISA Matters -- promptly, and in any event within five (5) days after a Responsible Officer shall become aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
with respect to any Plan, any reportable event, as defined in section 4043(b) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, could reasonably be expected to have a Material Adverse Effect;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(i)
	
Notices from Governmental Authority -- promptly, and in any event within thirty (30) days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect; and

	
 
	
 
	
 
	
 

	
 
	
 
	
(j)
	
Audited Financial Statements for Restricted Group -- with respect to any fiscal year of the Company as to which both of the following conditions would be satisfied:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(i)
	
the assets of all Unrestricted Subsidiaries, determined on a combined basis as of the last day of such year, exceed 20% of the consolidated total assets of the Company and its consolidated Subsidiaries, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(ii)
	
the revenues of all Unrestricted Subsidiaries, determined on a combined basis for such fiscal year, exceed 20% of the consolidated revenues of the Company and its consolidated Subsidiaries,

	
 
	
 
	
 
	
 
	
 
	
 

	
upon the written request of the Required Holders, the Company will deliver to each holder that is an Institutional Investor the same financial statements and opinion with respect to the Company and its Restricted Subsidiaries as is provided pursuant to clauses (i) and (ii) of Section 7.1(b) with respect to the Company and its consolidated Subsidiaries (such delivery to be made no later than the later of (x) the time delivery is made of the financial statements referred to in such clauses, if such request is made at least 60 days before such time, or (y) 60 days after such request is made).

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(k)
	
Requested Information -- with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of the Restricted Subsidiaries or relating to the ability of the Company to perform its obligations hereunder and under the Notes as from time to time may be reasonably requested by any such holder including, without limitation, information required by 17 C.F.R. 230.144A, as amended from time to time.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
7.2.
	
Officer's Certificate.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
Each set of financial statements delivered to a holder pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of a Senior Financial Officer setting forth:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Covenant Compliance -- the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Sections 10.1 through 10.7, inclusive, during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence); and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Event of Default -- a statement that such officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and the Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.

	
 
	
7.3.
	
Inspection.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
The Company shall permit the representatives of each holder that is an Institutional Investor:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
No Default -- if no Default or Event of Default then exists, at the expense of such holder (with respect to its travel and other out-of-pocket costs and compensation expenses of its representatives) upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and the Subsidiaries with the Company's officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants and its independent petroleum engineers, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times as may be reasonably requested in writing, provided that you shall be permitted to make only two inspections per calendar year pursuant to the provisions of this subsection (a) (without limitation of the inspection rights of any Other Purchaser); and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Default -- if a Default or an Event of Default then exists, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers, independent public accountants and independent petroleum engineers (and by this provision the Company authorizes said accountants and engineers to discuss the affairs, finances and accounts of the Company and the Subsidiaries), all at such times and as often as may be requested

	
 
	
 
	
 
	
 
	
 
	
 

	
8.
	
PREPAYMENT OF THE NOTES

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
8.1.
	
Required Prepayments.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
Regardless of the amount of the Notes which may be outstanding from time to time, the Company shall prepay or, in the case of principal amounts due at the maturity of any Note, pay, and there shall become due and payable on the respective dates specified below, the respective aggregate principal amounts of each Series of Notes hereinafter set forth opposite such dates (or such lesser amount as would constitute payment in full of the Notes of such Series):

	
Date:
	
Principal Amount

of Series G Notes

to be prepaid or

paid:
	
Principal Amount

of Series H Notes

to be prepaid or

paid:
	
Principal Amount

of Series I Notes

to be prepaid or

paid:

	
October 15, 2006
	
$20,000,000
	
$0
	
$0

	
October 15, 2008
	
$0
	
$50,000,000
	
$0

	
October 15, 2011
	
$0
	
$0
	
$37,000,000

	
Totals
	
$20,000,000
	
$50,000,000
	
$37,000,000

	
The principal amount of any Note remaining outstanding at the maturity thereof shall be paid at such maturity. Each such prepayment or payment shall be at a price of 100% of the principal amount prepaid or paid, together with interest accrued thereon to (but not including) the date of prepayment or payment. No Make-Whole Amount shall be payable in connection with any mandatory prepayment or payment made pursuant to this Section 8.1.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
8.2.
	
Optional Prepayments with Make-Whole Amount; Rescission.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Optional Prepayments with Make-Whole Amount.  The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in a principal amount of not less than (i) in the case of a partial prepayment other than a Contingent Optional Prepayment, Five Million Dollars ($5,000,000), or (ii) in the case of a partial prepayment which is a Contingent Optional Prepayment, Two Million Dollars ($2,000,000), or, in either case, such lesser amount as shall then be outstanding, at one hundred percent (100%) of the principal amount so prepaid, plus the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each holder written notice (an "Optional Prepayment Notice") of each optional prepayment under this Section 8.2 not less than thirty (30) days and not more than sixty (60) days prior to the date fixed for such prepayment (the "Optional Prepayment Date"). Each such Optional Prepayment Notice shall

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
specify the Optional Prepayment Date,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
state whether such prepayment is contingent upon the completion of an asset disposition by the Company or a Restricted Subsidiary or the consummation of a new credit facility with another creditor or group of creditors (a "Contingent Optional Prepayment") and describe in reasonable detail the terms thereof,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
specify the aggregate principal amount of each Series to be prepaid on such date,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iv)
	
specify the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3),

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(v)
	
specify the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(vi)
	
be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.

	
 
	
 
	
 
	
 
	
 
	
 

	
Two (2) Business Days prior to such prepayment, the Company shall deliver to each holder a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Rescission.  In the event that the Company shall give an Optional Prepayment Notice of any Contingent Optional Prepayment pursuant to Section 8.2(a), the Company thereafter shall have the right to rescind such Optional Prepayment Notice by giving each holder written notice of such rescission (a "Rescission Notice") not less than ten (10) Business Days prior to the Optional Prepayment Date specified in such Optional Prepayment Notice. Upon delivery of such Rescission Notice in accordance with this Section 8.2(b), the Company shall be relieved of any obligation to make the Contingent Optional Prepayment on the Optional Prepayment Date in respect of which such Rescission Notice was delivered.

	
 
	
 
	
 
	
 
	
 
	
 

	
.
	
8.3
	
Allocation of Partial Prepayments.

	
 
	
 
	
 
	
 
	
 
	
 

	
All partial prepayments of the Series G Notes, the Series H Notes and the Series I Notes pursuant to Section 8.1 shall be allocated to all outstanding Notes of the relevant Series ratably in accordance with the unpaid principal amounts thereof. All partial prepayments of the Notes pursuant to Section 8.2 shall be allocated to all outstanding Notes (without distinguishing among the different Series) ratably in accordance with the unpaid principal amounts thereof. Any partial prepayment of the Series G Notes, the Series H Notes and the Series I Notes pursuant to Section 8.2 shall reduce the principal amount of each required prepayment of such Series becoming due under Section 8.1 on and after the date of such prepayment in the inverse order of the maturity thereof.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
8.4.
	
Maturity; Surrender, etc.

	
 
	
 
	
 
	
 
	
 
	
 

	
In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
8.5.
	
Purchase of Notes.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will not and will not permit any Restricted Subsidiary or Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Restricted Subsidiary or Affiliate pursuant to any payment or prepayment of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
8.6.
	
Make-Whole Amount.

	
 
	
 
	
 
	
 
	
 
	
 

	
The term "Make-Whole Amount" means, with respect to any Series G Note, Series H Note or Series I Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

"Called Principal" means, with respect to any Series G Note, Series H Note, or Series I Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

"Discounted Value" means, with respect to the Called Principal of any Series G Note, Series H Note, or Series I Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

"Reinvestment Yield" means, with respect to the Called Principal of any Series G Note, Series H Note, or Series I Note, the sum of one half percent (.5%) per annum plus the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York City time) on the second (2nd) Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as Bloomberg Financial Markets Govt PX (or such other display as may replace Bloomberg Financial Markets Govt PX) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second (2nd) Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with the constant maturity closest to and greater than the Remaining Average Life and (2) the actively traded U.S. Treasury security with the constant maturity closest to and less than the Remaining Average Life.

"Remaining Average Life" means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

"Remaining Scheduled Payments" means, with respect to the Called Principal of any Series G Note, Series H Note, or Series I Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes of such Series, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or 12.1.

"Settlement Date" means, with respect to the Called Principal of any Series G Note, Series H Note, or Series I Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

	
 
	
 
	
 
	
 
	
 
	
 

	
9.
	
AFFIRMATIVE COVENANTS.

	
 
	
 
	
 
	
 
	
 
	
 

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

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
9.1.
	
Compliance with Law.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will and will cause each of the Subsidiaries to comply with all laws, ordinances, rules or regulations of Governmental Authorities to which each of them is subject, including, without limitation, Environmental Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other authorizations of Governmental Authorities necessary to the ownership and operation of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other authorizations of Governmental Authorities could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
9.2.
	
Insurance.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will and will cause each of the Subsidiaries to maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated, except to the extent that the failure to maintain such insurance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
9.3.
	
Maintenance of Properties.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will and will cause each of the Subsidiaries to maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
no violation of this Section 9.3 shall be deemed to have occurred with respect to any property of the Company or any Subsidiary damaged or destroyed by a casualty occurrence, so long as the Company or such Restricted Subsidiary is proceeding diligently to repair or replace such property, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (which term shall not, for the purpose of this clause (b) only, include the discontinuance of the operation and maintenance of a Restricted Subsidiary's properties that would render such Restricted Subsidiary unable to perform its obligations under the Subsidiary Guaranty, and therefore result in a Material Adverse Effect only under clause (c) of the definition of such term).

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
9.4.
	
Payment of Taxes and Claims

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will and will cause each of the Subsidiaries to file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax or assessment or claims if (a) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or such Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (b) the nonpayment of all such taxes and assessments in the aggregate could not reasonably be expected to have a Material Adverse Effect.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
9.5.
	
Corporate Existence, etc.

	
 
	
 
	
 
	
 
	
 
	
 

	
Subject to Section 10.5, the Company will at all times preserve and keep in full force and effect its corporate existence. Subject to Sections 10.5 and 10.6, the Company will at all times preserve and keep in full force and effect the corporate or other legal entity existence of each of the Subsidiaries (unless merged into the Company or a Subsidiary) and all rights, franchises, licenses and permits of the Company and the Subsidiaries unless, in the good faith judgment of the Company, the termination of or failure to preserve and keep in full force and effect such corporate or other legal entity existence, right, franchise, license or permit could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect (which term shall not (for the purpose of this Section 9.5 only) include, with respect to any Restricted Subsidiary, the termination of or failure to preserve and keep in full force and effect such corporate or other legal entity existence, right, franchise, license or permit that would render such Restricted Subsidiary unable to perform its obligations under the Subsidiary Guaranty, and therefore result in a Material Adverse Effect only under clause (c) of the definition of such term).

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
9.6.
	
Pari Passu.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company covenants that its obligations under the Notes and under this Agreement and the Other Agreements do and will rank at least pari passu with all its other present and future unsecured Senior Debt.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
9.7.
	
Subsidiary Guaranty.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will cause each Subsidiary which becomes a Restricted Subsidiary after the First Closing Date to execute and deliver to the holders a copy of the Joinder Agreement in the form attached to the Subsidiary Guaranty as Annex 2, duly executed by such Subsidiary, together with an opinion of counsel satisfactory to the Required Holders addressing with respect to such Subsidiary the issues relating to Subsidiaries and the Subsidiary Guaranty in the form of opinion attached hereto as Exhibit 4.4(a).

	
 
	
 
	
 
	
 
	
 
	
 

	
10.
	
NEGATIVE COVENANTS.

	
 
	
 
	
 
	
 
	
 
	
 

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

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
10.1.
	
Net Worth.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will not, at any time, permit Consolidated Net Worth to be less than the sum of (a) One Hundred Eighty Million Dollars ($180,000,000), plus (b) an aggregate amount equal to fifty percent (50%) of Consolidated Net Income (but, in each case, only if a positive number) for each completed fiscal year of the Company beginning with the fiscal year ending December 31, 1999.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
10.2.
	
Interest Coverage.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will not, at any time, permit (a) EBITDA for the period of four consecutive fiscal quarters of the Company then most recently ended to be less than (b) five hundred percent (500%) of Consolidated Interest Expense for such period.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
10.3.
	
Debt Incurrence.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Company Debt. The Company will not, directly or indirectly, create, incur, assume, guarantee, or otherwise become directly or indirectly liable with respect to, any Debt (including, without limitation, any extension, renewal or refunding of Debt), unless on the date the Company becomes liable with respect to any such Debt and immediately after giving effect thereto and the concurrent retirement of any other Debt,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
no Default or Event of Default exists, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
Consolidated Debt does not exceed fifty-five percent (55%) of Total Capitalization.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Restricted Subsidiary Debt. The Company will not permit any of the Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, or otherwise become directly or indirectly liable with respect to, any Debt (including, without limitation, any extension, renewal or refunding of Debt), unless on the date such Restricted Subsidiary becomes liable with respect to any such Debt and immediately after giving effect thereto and the concurrent retirement of any Debt,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
no Default or Event of Default exists,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
the aggregate amount of Priority Debt does not exceed ten percent (10%) of Consolidated Tangible Assets, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
Consolidated Debt does not exceed fifty-five percent (55%) of Total Capitalization.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
Time of Incurrence of Debt. For the purposes of this Section 10.3, any Person becoming a Restricted Subsidiary after the date hereof shall be deemed, at the time it becomes a Restricted Subsidiary, to have incurred all of its then outstanding Debt, and any Person extending, renewing or refunding any Debt shall be deemed to have incurred such Debt at the time of such extension, renewal or refunding.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
10.4.
	
Liens.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company or any Restricted Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom (whether or not provision is made for the equal and ratable securing of the Notes in accordance with the last paragraph of this Section 10.4), or assign or otherwise convey any right to receive income or profits, except:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Liens for taxes, assessments or other governmental charges the payment of which is not at the time required by Section 9.4;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other similar Liens, in each case, incurred in the ordinary course of business for sums not yet due or the payment of which is being contested in accordance with the general procedures described in Section 9.4 relating to tax matters;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business (i) in connection with workers' compensation, unemployment insurance and other types of social security or retirement benefits, or (ii) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory obligations, surety bonds, appeal and supersedeas bonds (not in excess of Five Million Dollars ($5,000,000)), bids, leases (other than Capital Leases), performance bonds, purchase, construction or sales contracts and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
leases or subleases granted to others, easements, rights-of-way, restrictions and other similar charges or encumbrances, in each case incidental to, and not interfering with, the ordinary conduct of the business of the Company or any of the Restricted Subsidiaries, provided that such Liens do not, in the aggregate, materially detract from the value of such property with respect to its then current use;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(e)
	
Liens on property of the Company or any of the Restricted Subsidiaries securing Debt owing to the Company or to a Wholly-Owned Restricted Subsidiary;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(f)
	
Liens existing on the date of this Agreement and securing the Debt of the Company and the Restricted Subsidiaries identified as secured Debt in Schedule 5.15, but not any refinancing of such Debt;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(g)
	
Liens on property acquired or constructed by the Company or any Restricted Subsidiary after the date of this Agreement to secure Debt of the Company or such Restricted Subsidiary incurred in connection with or related to such acquisition or construction, and Liens existing on such property at the time of acquisition thereof, provided that

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
no such Lien shall extend to or cover any property other than the property being acquired or constructed (including contractual and other rights related thereto and proceeds thereof),

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
the amount of Debt secured by any such Lien shall not exceed an amount equal to the lesser of the total purchase or construction price or Fair Market Value (as determined in good faith by the Board of Directors or the board of directors of such Restricted Subsidiary) of the property being acquired or constructed, determined at the time of such acquisition or at the time of substantial completion of such construction,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
such Lien shall be created concurrently with or within twelve months after such acquisition or substantial completion of such construction, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iv)
	
no Default or Event of Default shall exist at the time of creation, incurrence or assumption of such Lien;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(h)
	
Liens existing on property of a corporation at the time it becomes a Restricted Subsidiary or is merged or consolidated with the Company or a Restricted Subsidiary, provided that

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
no such Lien shall extend to or cover any property other than the property subject to such Lien at the time of any such transaction,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
the amount of Debt secured by any such Lien shall not exceed the Fair Market Value (as determined in good faith by the Board of Directors or the board of directors of such Restricted Subsidiary) of the property subject thereto, determined at the time of such transaction,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
such Lien was not created in contemplation of any such transaction, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iv)
	
no Default or Event of Default shall exist at the time of any such transaction;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(i)
	
Liens incidental to the conduct of the business referred to in Section 10.10 (including, without limitation, licenses, participation rights, rebate or revenue sharing obligations, or similar encumbrances), provided that such Liens have not arisen in connection with the incurrence of Debt; and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(j)
	
Liens, not otherwise permitted by the provisions of this Section 10.4, on property of the Company or any Restricted Subsidiary, provided that on the date the Company or such Restricted Subsidiary becomes liable with respect to the Debt secured by such Liens, and immediately after giving effect thereto and the concurrent retirement of any other Debt constituting Priority Debt,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
no Default or Event of Default exists, and

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
the aggregate amount of Priority Debt does not exceed ten percent (10%) of Consolidated Tangible Assets.

	
 
	
 
	
 
	
 
	
 
	
 

	
In case any property shall be subjected to a Lien in violation of this Section 10.4, the Company will forthwith make or cause to be made, to the fullest extent permitted by applicable law, provision whereby the Notes will be secured equally and ratably as to such property with all other obligations secured thereby pursuant to such agreements and instruments as shall be approved by the Required Holders, and the Company will promptly cause to be delivered to each holder of a Note an opinion, reasonably satisfactory to the Required Holders, of Andrews & Kurth Mayor Day Caldwell & Keeton, L.L.P. or other independent counsel satisfactory to the Required Holders to the effect that such agreements and instruments are enforceable in accordance with their terms, and in any event the Notes shall have the benefit, to the full extent that, and with such priority as, the holders of Notes may be entitled under applicable law, of an equitable Lien on such property (and any proceeds thereof) securing the Notes. Such violation of this Section 10.4 will constitute an Event of Default hereunder, whether or not any such provision is made or any equitable Lien is created pursuant to this Section 10.4.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
10.5.
	
Mergers and Consolidations.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will not, and will not permit any of the Restricted Subsidiaries to, consolidate with or merge with any other corporation or convey, transfer, spin-off or lease substantially all of its assets in a single transaction or series of transactions to any Person (except that a Restricted Subsidiary may (x) consolidate with or merge with, or convey, transfer, spin-off or lease substantially all of its assets in a single transaction or series of transactions to, another Restricted Subsidiary or the Company and (y) convey, transfer, spin-off or lease all of its assets in compliance with the provisions of Section 10.6), provided that the foregoing restriction does not apply to the consolidation or merger of the Company with, or the conveyance, transfer, spin-off or lease of substantially all of the assets of the Company in a single transaction or series of transactions to, any Person so long as:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer, spin-off or lease substantially all of the assets of the Company as an entirety, as the case may be (the "Successor Corporation"), shall be a solvent corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and shall conduct substantially all of its business in one or more of such jurisdictions;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
if the Company is not the Successor Corporation, such corporation shall have executed and delivered to each holder its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes (pursuant to such agreements and instruments as shall be reasonably satisfactory to the Required Holders), and the Company shall have caused to be delivered to each holder an opinion, reasonably satisfactory to the Required Holders, of Andrews & Kurth Mayor Day Caldwell & Keeton, L.L.P. or other nationally recognized independent counsel satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
immediately prior to, and immediately after giving effect to, such transaction, no Default or Event of Default would exist; and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
immediately after giving effect to such transaction, the Successor Corporation would be permitted, pursuant to the provisions of Section 10.3, to incur at least One Dollar ($1) of additional Debt owing to a Person other than a Restricted Subsidiary of the Successor Corporation.

	
 
	
 
	
 
	
 
	
 
	
 

	
No such conveyance, transfer, spin-off or lease of substantially all of the assets of the Company shall have the effect of releasing the Company or any Successor Corporation from its liability under this Agreement or the Notes.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
10.6.
	
Sale of Assets.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Sale of Assets. The Company will not, and will not permit any of the Restricted Subsidiaries to, make any Transfer, provided that the foregoing restriction does not apply to a Transfer if:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
the property that is the subject of such Transfer constitutes either (A) inventory held for sale, or (B) equipment, fixtures, supplies or materials no longer required in the operation of the business of the Company or such Restricted Subsidiary or that is obsolete, and, in the case of any Transfer described in clause (A) or clause (B), such Transfer is in the ordinary course of business (an "Ordinary Course Transfer");

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
either

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(A)
	
such Transfer is from a Restricted Subsidiary to the Company or a Wholly-Owned Restricted Subsidiary, or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(B)
	
such Transfer is from the Company to a Wholly-Owned Restricted Subsidiary,

	
 
	
 
	
 
	
 
	
 
	
 

	
so long as immediately before and immediately after the consummation of such transaction, and after giving effect thereto, no Default or Event of Default exists or would exist (collectively with any Ordinary Course Transfers, "Excluded Transfers"); or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
such Transfer is not an Excluded Transfer and all of the following conditions shall have been satisfied with respect thereto:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(A)
	
such Transfer does not involve a Substantial Portion of the property of the Company and the Restricted Subsidiaries,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(B)
	
in the good faith opinion of the Company, the Transfer is in exchange for consideration with a Fair Market Value at least equal to that of the property exchanged, and is in the best interests of the Company, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(C)
	
immediately after giving effect to such transaction no Default or Event of Default would exist

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Debt Prepayment Transfers and Reinvested Transfers.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
Notwithstanding the provisions of Section 10.6(a), the determination of whether a Transfer involves a Substantial Portion of the property of the Company and the Restricted Subsidiaries, as provided in Section 10.6(a)(iii)(A), shall be made without taking into account the same proportion of the book value attributable to the property subject to such Transfer as shall be equal to the proportion of the Net Asset Sale Proceeds Amount (the "Designated Portion") to be applied to either (x) a prepayment of the Notes pursuant to Section 8.2 of this Agreement and a prepayment of the Old Notes pursuant to Section 8.2 of the Old Note Purchase Agreements, pro rata based on the then outstanding principal amount of and required Make-Whole Amount (with respect to the Old Notes, as defined in each of the Old Note Purchase Agreements) due with respect to the prepayment of each series of the Notes and the Old Notes (a "Prepayment Transfer") or (y) the acquisition of assets similar to the assets which were the subject of such Transfer (a "Reinvested Transfer") within one hundred eighty (180) days of the consummation of such Transfer, as specified in an Officer's Certificate delivered to each holder prior to, or contemporaneously with, the consummation of such Transfer.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
If, notwithstanding the certificate referred to in the foregoing clause (i), the Company shall fail to apply the entire amount of the Designated Portion as specified in such certificate within the period stated in Section 10.6(b)(i), the computation of whether such Transfer involved a Substantial Portion of the property of the Company and the Restricted Subsidiaries shall be recomputed, as of the date of such Transfer, by taking into account the same proportion of the book value attributable to the property subject to such Transfer as shall be equal to the proportion of the Net Asset Sale Proceeds Amount actually applied to either a Prepayment Transfer or a Reinvested Transfer within such period. If, upon the recomputation provided for in the preceding sentence, such Transfer involved a Substantial Portion of the property of the Company and the Restricted Subsidiaries, an Event of Default shall be deemed to have existed as of the expiration of such period.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
Certain Definitions. The following terms have the following meanings:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
Disposition Value -- means, at any time, with respect to any Transfer of property,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(A)
	
in the case of property that does not constitute capital stock of a Restricted Subsidiary, the book value thereof, valued at the amount taken into account (or which would be taken into account) in the consolidated balance sheet of the Company then most recently required to have been delivered to the holders pursuant to Section 7.1, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(B)
	
in the case of property that constitutes capital stock of a Restricted Subsidiary, an amount equal to that percentage of the book value of the assets of the Restricted Subsidiary that issued such capital stock as is equal to the percentage that the book value of such capital stock represents of the book value of all of the outstanding capital stock of such Restricted Subsidiary (assuming, in making such calculations, that all Securities convertible into such capital stock are so converted and giving full effect to all transactions that would occur or be required in connection with such conversion), determined as of the date of the balance sheet referred to in the foregoing clause (A)

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
Substantial Portion -- means, at any time, any property subject to a Transfer if

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(A)
	
the Disposition Value of such property, when added to the Disposition Value of all other property of the Company and the Restricted Subsidiaries that has been the subject of a Transfer (other than an Excluded Transfer and subject, with respect to both such property and all such other property, to the provisions of Section 10.6(b)) during the then current fiscal year of the Company, exceeds an amount equal to fifteen percent (15%) of Consolidated Total Assets as reflected (or as would be reflected) in the consolidated balance sheet of the Company then most recently required to have been delivered to the holders pursuant to Section 7.1, or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(B)
	
the Disposition Value of such property, when added to the Disposition Value of all other property of the Company and the Restricted Subsidiaries that has been the subject of a Transfer (other than an Excluded Transfer and subject, with respect to both such property and all such other property, to the provisions of Section 10.6(b)) during the period beginning on the First Closing Date and ending on and including the date of the consummation of such Transfer, exceeds an amount equal to twenty-five percent (25%) of Consolidated Total Assets as reflected (or as would be reflected) in the consolidated balance sheet of the Company then most recently required to have been delivered to the holders pursuant to Section 7.1 hereof.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
Transfer -- means, with respect to any Person, any transaction in which such Person sells, conveys, transfers or leases (as lessor) any of its property, including, without limitation, capital stock of any other Person.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
10.7.
	
Restricted Payments and Restricted Investments.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Limitation. The Company will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, declare, make or incur any liability to make any Restricted Payment or make or authorize any Restricted Investment unless immediately after giving effect to such action:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
the sum of (x) the aggregate amount of outstanding Restricted Investments (valued immediately after such action), plus (y) the aggregate amount of Restricted Payments of the Company and the Restricted Subsidiaries declared or made during the period commencing on the First Closing Date, and ending on the date such Restricted Payment or Restricted Investment is declared or made, inclusive, would not exceed the sum of

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(A)
	
Thirty-Five Million Dollars ($35,000,000), plus

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(B)
	
fifty percent (50%) of Consolidated Net Income for the period commencing January 1, 1999 and ending on the date such Restricted Payment or such Restricted Investment is declared or made (or minus 100% of Consolidated Net Income for such period if Consolidated Net Income for such period is a loss), plus

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(C)
	
the aggregate amount of Net Proceeds of Common Stock of the Company for such period; plus

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(D)
	
the aggregate amount of Net Proceeds of Qualified Capital for such period; and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
the Company could incur, pursuant to Section 10.3, at least One Dollar ($1) of additional Debt owing to a Person other than a Restricted Subsidiary; and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
no Default or Event of Default would exist.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Time of Payment. The Company will not, nor will it permit any of the Restricted Subsidiaries to, authorize a Restricted Payment that is not payable within sixty (60) days of authorization.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
Investments of Subsidiaries. Each Person which becomes a Restricted Subsidiary after the First Closing Date will be deemed to have made, on the date such Person becomes a Restricted Subsidiary, all Restricted Investments of such Person in existence on such date. Investments in any Person that ceases to be a Restricted Subsidiary after the First Closing Date (but in which the Company or another Restricted Subsidiary continues to maintain an Investment) will be deemed to have been made on the date on which such Person ceases to be a Restricted Subsidiary.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
10.8.
	
Limitations on Certain Restricted Subsidiary Actions.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will not, and will not permit any of the Restricted Subsidiaries to, enter into any agreement which would restrict any Restricted Subsidiary's legal ability or right to:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
pay dividends or make any other distributions on its common stock;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
pay any Debt owing to the Company or another Restricted Subsidiary (other than waivers of subrogation);

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
make any Investment in the Company or another Restricted Subsidiary;

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
transfer its property to the Company or another Restricted Subsidiary (except that any such agreement may (i) prohibit the assignment of contractual rights, (ii) include grants of contractual rights of first refusal, and (iii) include similar contractual obligations not unusual in the course of such Restricted Subsidiary's business); or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(e)
	
Guaranty the Notes or any renewals or refinancings thereof;

	
 
	
 
	
 
	
 
	
 
	
 

	
provided, however, that

	
 
	
 
	
 
	
(i)
	
the restrictions of this Section 10.8 shall not apply to

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(A)
	
any such agreement in existence on the First Closing Date and set forth in Schedule 10.8,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(B)
	
this Agreement, or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
(C)
	
other agreements relating to the creation of Senior Debt incurred in accordance with the terms of this Agreement, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
the restrictions of clause (d) of this Section 10.8 shall not apply to any agreement relating to the creation of Priority Debt or Debt of Restricted Subsidiaries secured by Liens permitted by Section 10.4(a) to Section 10.4(i), inclusive, to the extent that such restrictions limit the ability of any Restricted Subsidiary to transfer the Property that secures such Priority Debt or such other Debt;

	
 
	
 
	
 
	
 
	
 
	
 

	
provided further that, in the case of the foregoing clauses (i) and (ii), such agreement does not impose any limitations on any Restricted Subsidiary's ability to perform its obligations under the Subsidiary Guaranty.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
10.9
	
Affiliate Transactions.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, enter into any transaction (other than transactions among the Company and its wholly-owned Unrestricted Subsidiaries that are not, individually or in the aggregate, Material), including, without limitation, the purchase, sale or exchange of property or the rendering of any service, with any Affiliate of the Company or any of its Restricted Subsidiaries, except in the ordinary course of business of the Company or such Restricted Subsidiary and upon fair and reasonable terms no less favorable to the Company or such Restricted Subsidiary than it would obtain in a comparable arm's-length transaction with a Person not an Affiliate.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
10.10.
	
Line of Business.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will not, and will not permit any of the Subsidiaries to, engage in any business if, as a result, the Company and the Subsidiaries, taken as a whole, would not be engaged primarily in the provision of (a) seismic data services, (b) exploration for, and development and ownership of, gas and oil reserves, (c) gas marketing and (d) businesses related to the foregoing businesses.

	
 
	
 
	
 
	
 
	
 
	
 

	
11.
	
EVENTS OF DEFAULT.

	
 
	
 
	
 
	
 
	
 
	
 

	
An "Event of Default" shall exist if any of the following conditions or events shall occur and be continuing:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(a)
	
the Company defaults in the payment of any principal of or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(b)
	
the Company defaults in the payment of any interest on any Note for more than five (5) Business Days after the same becomes due and payable; or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(c)
	
the Company defaults in the performance of or compliance with any term contained in Sections 10.1 through 10.9, inclusive, except as set forth in paragraph 11(d) below with respect to paragraphs (a), (b) and (c) of Section 10.4 for obligations then due aggregating less than Five Million Dollars ($5,000,000); or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(d)
	
the Company defaults in the performance of or compliance with any term contained herein (other than those referred to in paragraphs (a), (b) and (c) of this Section 11) or incurs at any time Liens of the types described in paragraphs (a), (b) and (c) of Section 10.4 for obligations then due aggregating less than Five Million Dollars ($5,000,000), and such default is not remedied within thirty (30) days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder (any such written notice to be identified as a "notice of default" and to refer specifically to this Section 11(d)); or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(e)
	
any representation or warranty made in writing by or on behalf of the Company or any Restricted Subsidiary or by any officer of the Company or any Restricted Subsidiary in this Agreement or the Subsidiary Guaranty or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; o

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(f)
	
(i) the Company or any Restricted Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any one or more issues of outstanding Debt in an aggregate principal amount of at least Ten Million Dollars ($10,000,000) beyond any period of grace provided with respect thereto, or (ii) the Company or any Restricted Subsidiary is in default in the performance of or compliance with any term of any evidence of any one or more issues of Debt in an aggregate outstanding principal amount of at least Ten Million Dollars ($10,000,000) or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and the effect of such default or condition is to cause, or the holder or holders of such obligation (or a trustee on behalf of such holder or holders) as a result of such default or condition actually cause, such obligation to become due prior to any originally stated maturity, or to be repurchased by the Company or any Restricted Subsidiary prior to any originally scheduled maturity; or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(g)
	
the Company or any Restricted Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(h)
	
a court or governmental authority of competent jurisdiction enters an order appointing, without consent by the Company or any of the Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of the Subsidiaries, or any such petition shall be filed against the Company or any of the Subsidiaries and such petition shall not be dismissed within sixty (60) days; or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(i)
	
a final judgment or judgments for the payment of money aggregating in excess of Five Million Dollars ($5,000,000) are rendered against one or more of the Company and the Subsidiaries and such judgments are not, within forty-five (45) days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within forty-five (45) days after the expiration of such stay; or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(j)
	
(i)
	
the Subsidiary Guaranty shall cease to be in full force and effect or shall be declared by a court or Governmental Authority of competent jurisdiction to be void, voidable or unenforceable against any Restricted Subsidiary,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(ii)
	
the validity or enforceability of the Subsidiary Guaranty against any Restricted Subsidiary shall be contested by such Restricted Subsidiary, the Company or any Affiliate, or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(iii)
	
any Restricted Subsidiary, the Company or any Affiliate shall deny that such Restricted Subsidiary has any further liability or obligation under the Subsidiary Guaranty.

	
 
	
 
	
 
	
 
	
 
	
 

	
12.
	
REMEDIES ON DEFAULT, ETC.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
12.1
	
Acceleration.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
If an Event of Default with respect to the Company described in paragraph (g) or (h) of Section 11 (other than an Event of Default described in clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
If any Event of Default described in paragraph (a) or (b) of Section 11 has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.

	
 
	
 
	
 
	
 
	
 
	
 

	
Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default is intended to provide compensation for the deprivation of such right under such circumstances.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
12.2.
	
Other Remedies.

	
 
	
 
	
 
	
 
	
 
	
 

	
If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
12.3.
	
Rescission.

	
 
	
 
	
 
	
 
	
 
	
 

	
At any time after any Notes have been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (c) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
12.4
	
No Waivers or Election of Remedies, Expenses, etc.

	
 
	
 
	
 
	
 
	
 
	
 

	
No course of dealing and no delay on the part of any holder in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder's rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under Section 15, the Company will pay to each holder on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys' fees, expenses and disbursements.

	
 
	
 
	
 
	
 
	
 
	
 

	
13.
	
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
13.1.
	
Registration of Notes.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
13.2.
	
Transfer and Exchange of Notes.

	
 
	
 
	
 
	
 
	
 
	
 

	
Upon surrender of any Note at the principal executive office of the Company for registration of transfer or exchange (and in the case of a surrender for registration of transfer, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or his attorney duly authorized in writing and accompanied by the address for notices of each transferee of such Note or part thereof, and subject to compliance with all restrictions on transfer set forth herein and in such Note), the Company shall execute and deliver, at the Company's expense (except as provided below), promptly and, in any event, within ten (10) days of the surrender of such Note by the registered holder thereof, one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1G, Exhibit 1H or Exhibit 1I, as the case may be. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than Twenty-Five Thousand Dollars ($25,000), provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than Twenty-Five Thousand Dollars ($25,000). Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representations set forth in Section 6.1 (unless such transfer is effected pursuant to a transaction in which the representation set forth in such Section is not required in order to comply with the securities laws applicable to such transfer) and Section 6.3.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
13.3.
	
Replacement of Notes.

	
 
	
 
	
 
	
 
	
 
	
 

	
Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if an original Purchaser or another holder of Notes that is a Qualified Institutional Buyer is the holder of such Note, the unsecured agreement of indemnity of such holder shall be deemed to be satisfactory), or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
in the case of mutilation, upon surrender and cancellation thereof,

	
 
	
 
	
 
	
 
	
 
	
 

	
the Company at its own expense shall execute and, within ten (10) days after such receipt, deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

	
 
	
 
	
 
	
 
	
 
	
 

	
14.
	
PAYMENTS ON NOTES.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
14.1.
	
Place of Payment.

	
 
	
 
	
 
	
 
	
 
	
 

	
The Company will punctually pay, or cause to be paid, the principal of and interest (and Make-Whole Amount, if any) on the Notes, as and when the same shall become due and payable according to the terms hereof and of the Notes. Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made at the principal office of the Company in Texas. The Company may at any time, by notice to each holder, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
14.2.
	
Home Office Payment.

	
 
	
 
	
 
	
 
	
 
	
 

	
So long as you or your nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below your name in Schedule A, or by such other method or at such other address as you shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, you shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by you or your nominee you will, at your election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by you under this Agreement.

	
 
	
 
	
 
	
 
	
 
	
 

	
15.
	
EXPENSES, ETC.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
15.1.
	
Transaction Expenses.

	
 
	
 
	
 
	
 
	
 
	
 

	
Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable attorneys' fees of Bingham Dana LLP, special counsel to you and the Other Purchasers, in connection with such transactions, and will pay all costs and expenses (including reasonable attorneys' fees of a special counsel and, if reasonably required, local or other counsel) incurred by you and each Other Purchaser or holder in connection with the consideration, evaluation, analysis, assessment, negotiation, preparation and/or execution of any amendments, waivers or consents under or in respect of this Agreement or the Notes (whether or not any such amendment, waiver or consent becomes effective), or in connection with any controversy or potential controversy thereunder, including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the Notes, or by reason of being a holder, and (b) the costs and expenses, including financial advisors' fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes. The Company will pay, and will save you and each other holder harmless from, all claims in respect of any fees, costs or expenses if any, of brokers and finders (other than those retained by you).

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
15.2.
	
Survival.

	
 
	
 
	
 
	
 
	
 
	
 

	
The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.

	
 
	
 
	
 
	
 
	
 
	
 

	
16.
	
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

	
 
	
 
	
 
	
 
	
 
	
 

	
All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by you of any Note or portion thereof or interest therein and the payment of any Note (but not the payment in full of all of the Notes), and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of you or any other holder. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between you and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

	
 
	
 
	
 
	
 
	
 
	
 

	
17.
	
AMENDMENT AND WAIVER.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
17.1
	
Requirements.

	
 
	
 
	
 
	
 
	
 
	
 

	
This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1 to Section 6, inclusive, or Section 21, or any defined term as it is used therein, will be effective as to you unless consented to by you in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.

	
 
	
 
	
 

	
 
	
17.2.
	
Solicitation of Holders.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Solicitation. The Company will provide each holder (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security, to any holder as consideration for, as an inducement to, or otherwise in connection with the entering into by any holder of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted, on the same terms, ratably to each holder then outstanding even if such holder did not consent to such waiver or amendment.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
Scope of Consent. Any consent made pursuant to this Section 17.2 by a holder of Notes that has transferred or has agreed to transfer its Notes to the Company, any Subsidiary or any Affiliate and has provided or has agreed to provide such written consent as a condition to such transfer shall be void and of no force and effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force and effect, retroactive to the date such amendment or waiver initially took or takes effect, except solely as to such holder.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
17.3.
	
Binding Effect, etc.

	
 
	
 
	
 
	
 
	
 
	
 

	
Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders and is binding upon them and upon each future holder of any Notes and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term "this Agreement" and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
17.4.
	
Notes held by Company, etc.

	
 
	
 
	
 
	
 
	
 
	
 

	
Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding have approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company, any Wholly-Owned Restricted Subsidiary or any of the Company's Affiliates shall be deemed not to be outstanding.

	
 
	
 
	
 
	
 
	
 
	
 

	
18.
	
NOTICES.

	
 
	
 
	
 
	
 
	
 
	
 

	
All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(i)
	
if to you or your nominee, to you or it at the address specified for such communications in Schedule A, or at such other address as you or it shall have specified to the Company in writing,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(ii)
	
if to any other holder, to such holder at such address as such other holder shall have specified to the Company in writing, or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(iii)
	
if to the Company, to the Company at its address set forth at the beginning hereof to the attention of the Company's Chief Financial Officer, or at such other address as the Company shall have specified to each of the holders in writing.

	
 
	
 
	
 
	
 
	
 
	
 

	
Notices under this Section 18 will be deemed given only when actually received.

	
 
	
 
	
 
	
 
	
 
	
 

	
19.
	
REPRODUCTION OF DOCUMENTS.

	
 
	
 
	
 
	
 
	
 
	
 

	
This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by you at the Closings (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to you, may be reproduced by you by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and you may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by you in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other holder from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

	
 
	
 
	
 
	
 
	
 
	
 

	
20.
	
CONFIDENTIAL INFORMATION.

	
 
	
 
	
 
	
 
	
 
	
 

	
For the purposes of this Section 20, "Confidential Information" means information delivered to you by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by you as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to you prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by you or any Person acting on your behalf, (c) otherwise becomes known to you other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to you under Section 7.1 that are otherwise publicly available. You will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by you in good faith to protect confidential information of third parties delivered to you and will use such Confidential Information only for the purposes of evaluating and administering your investment in the Notes, provided that you may deliver or disclose Confidential Information to

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(i)
	
your directors, officers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by your Notes),

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(ii)
	
your financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(iii)
	
any other holder,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(iv)
	
any Institutional Investor to which you sell or offer to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20),

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(v)
	
any Institutional Investor from which you offer to purchase any Security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20),

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(vi)
	
any federal or state regulatory authority having jurisdiction over you,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(vii)
	
the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about your investment portfolio, or

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
(viii)
	
any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to you, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which you are a party or (z) if an Event of Default has occurred and is continuing, to the extent you may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under your Notes and this Agreement. 

	
 
	
 
	
 
	
 
	
 
	
 

	
Each holder, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.

	
 
	
 
	
 
	
 
	
 
	
 

	
21.
	
SUBSTITUTION OF PURCHASER.

	
 
	
 
	
 
	
 
	
 
	
 

	
You shall have the right to substitute any one of your Affiliates as the purchaser of the Notes that you have agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both you and such Affiliate, shall contain such Affiliate's agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, wherever the word "you" is used in this Agreement (other than in this Section 21), such word shall be deemed to refer to such Affiliate in lieu of you. In the event that such Affiliate is so substituted as a purchaser hereunder and such Affiliate thereafter transfers to you all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, wherever the word "you" is used in this Agreement (other than in this Section 21), such word shall no longer be deemed to refer to such Affiliate, but shall refer to you, and you shall have all the rights of an original holder under this Agreement.

	
 
	
 
	
 
	
 
	
 
	
 

	
22.
	
MISCELLANEOUS.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
22.1.
	
Successors and Assigns.

	
 
	
 
	
 
	
 
	
 
	
 

	
All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and permitted assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
22.2.
	
Payments Due on Non-Business Days.

	
 
	
 
	
 
	
 
	
 
	
 

	
If any payment due on, or with respect to, any Note shall fall due on a day other than a Business Day, then such payment shall be made on the first (1st) Business Day following the day on which such payment shall have so fallen due, provided that if all or any portion of such payment shall consist of a payment of interest, for purposes of calculating such interest, such payment shall be deemed to have been originally due on such first (1st) following Business Day, such interest shall accrue and be payable to (but not including) the actual date of payment and the amount of the next succeeding interest payment shall be adjusted accordingly.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
22.3.
	
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 (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
22.4.
	
Construction.

	
 
	
 
	
 
	
 
	
 
	
 

	
Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
22.5.
	
Counterparts.

	
 
	
 
	
 
	
 
	
 
	
 

	
This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
22.6.
	
Governing Law.

	
 
	
 
	
 
	
 
	
 
	
 

	
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
22.7.
	
Consent to Jurisdiction; Appointment of Agent.

	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Consent to Jurisdiction. THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES, OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH HEREUNDER OR THEREUNDER, BROUGHT BY ANY HOLDER OF NOTES AGAINST THE COMPANY OR ANY OF ITS PROPERTY, MAY BE BROUGHT BY SUCH HOLDER OF NOTES IN ANY FEDERAL DISTRICT COURT LOCATED IN NEW YORK CITY, NEW YORK OR ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY, NEW YORK, AS SUCH HOLDER OF NOTES MAY IN ITS SOLE DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE IN PERSONAM JURISDICTION OF EACH SUCH COURT, AND THE COMPANY IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT IN ANY PROCEEDING BEFORE ANY TRIBUNAL, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT IT IS NOT SUBJECT TO THE IN PERSONAM JURISDICTION OF ANY SUCH COURT. IN ADDITION, THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY BROUGHT IN ANY SUCH COURT, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OR RIGHT OF ANY HOLDER OF NOTES TO OBTAIN JURISDICTION OVER THE COMPANY IN SUCH OTHER JURISDICTION AS MAY BE PERMITTED BY APPLICABLE LAW.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Agent for Service of Process. THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT PROCESS SERVED EITHER PERSONALLY OR BY REGISTERED OR CERTIFIED MAIL WITH RETURN RECEIPT REQUESTED (POSTAGE PREPAID) SHALL CONSTITUTE, TO THE EXTENT PERMITTED BY LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES, OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH HEREUNDER OR THEREUNDER, BROUGHT BY ANY HOLDER OF NOTES AGAINST THE COMPANY OR ANY OF ITS PROPERTY. RECEIPT OF PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A DELIVERY RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY COMMERCIAL DELIVERY SERVICE. WITHOUT LIMITING THE FOREGOING, THE COMPANY HEREBY APPOINTS, IN THE CASE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN THE COURTS OF OR IN THE STATE OF NEW YORK:

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
CT CORPORATION SYSTEM

1633 BROADWAY

NEW YORK, NEW YORK 10019

	
 
	
 
	
 
	
 
	
 
	
 

	
TO RECEIVE, FOR IT AND ON ITS BEHALF, SERVICE OF PROCESS. THE COMPANY SHALL AT ALL TIMES MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN NEW YORK CITY, NEW YORK AND MAY FROM TIME TO TIME APPOINT SUCCEEDING AGENTS FOR SERVICE OF PROCESS BY NOTIFYING EACH HOLDER OF NOTES OF SUCH APPOINTMENT, WHICH AGENTS SHALL BE ATTORNEYS, OFFICERS OR DIRECTORS OF THE COMPANY, OR CORPORATIONS WHICH IN THE ORDINARY COURSE OF BUSINESS ACT AS AGENTS FOR SERVICE OF PROCESS. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OR RIGHT OF ANY HOLDER OF NOTES TO SERVE ANY WRITS, PROCESS OR SUMMONSES IN ANY MANNER PERMITTED BY APPLICABLE LAW.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
22.8.
	
Defeasance.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
Option of Company. Anything to the contrary contained herein notwithstanding, the Company may, in its sole discretion and at any time upon not less than thirty (30) days' prior written notice to all holders, elect to establish a trust (the "Trust"), solely in favor of all holders of the Notes then outstanding, and irrevocably and absolutely assign, transfer, and convey to, and deposit into, said Trust an amount of United States Governmental Securities having interest and principal payments sufficient to pay in full all remaining principal and interest payments and, if any principal is to be repaid on a date other than the date scheduled therefor in Section 8.1, together with the Make-Whole Amount, if any, as the same shall fall due, in respect of all Notes then outstanding.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
Discharge. Provided that

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(i)
	
the Trust, the trustee thereof, and the terms and conditions (as well as the form and substance) of the indenture whereby the Trust shall have been established shall be reasonably satisfactory to the Required Holders,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(ii)
	
the purchase price of the United States Governmental Securities to be deposited into the Trust shall have been fully paid by the Company, and such United States Governmental Securities shall have been so deposited into the Trust (and each holder shall have received written verification thereof by the trustee of the Trust) and shall, as so deposited, be unencumbered by any Lien and sufficient to pay all principal, interest and Make-Whole Amount, if any, to fall due on the Notes then outstanding as provided in Section 22.8(a) (and each holder shall have received written verification of such sufficiency by the independent certified public accountants of recognized national standing selected by the Company),

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iii)
	
the Company shall have (A) paid in full all fees, costs and expenses of the trustee of the Trust and of all holders incurred in connection with the preparation of the trust indenture and the establishment of the Trust, including, without limitation, all reasonable attorneys' fees and disbursements, and (B) prepaid in full any and all fees, costs and expenses of the trustee of the Trust for the entire term of the Trust (and the holders of the Notes shall have received written confirmation from the trustee confirming its receipt of the payments required to be made to it pursuant to this clause (iii)),

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(iv)
	
the Company shall have no continuing legal or equitable interest in the Trust or the United States Governmental Securities deposited into the Trust (other than a reversionary interest in any such United States Governmental Securities or the proceeds therefrom, remaining after the full, final and indefeasible payment of the principal amount of the Notes and all interest and Make-Whole Amount, if any, thereon) and shall have no right to direct or instruct the trustee of the Trust, or to remove such trustee, or otherwise to require such trustee to take any action with respect to such United States Governmental Securities or otherwise,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(v)
	
no Event of Default shall have occurred and be continuing at the time of such deposit,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(vi)
	
the Company shall have delivered the written notice referred to in Section 22.8(a) hereof to the holders and a legal opinion of Andrews & Kurth Mayor Day Caldwell & Keeton, L.L.P. or other independent counsel to the Company, reasonably satisfactory to the Required Holders stating, among other things which the Required Holders may reasonably request, that (A) the Trust is validly created and duly constituted and that the sole beneficiaries thereof are the holders, (B) the United States Governmental Securities deposited therein were validly contributed to the Trust and constitute a legal and valid res of the Trust, (C) the Company's actions in creating the Trust and contributing the United States Governmental Securities thereto were duly authorized and valid, (D) the Company, as the settlor of the Trust, has no right, title or interest in and to the Trust or the res thereof (other than a reversionary interest in any United States Governmental Securities, or the proceeds thereof, remaining after the full, final and indefeasible payment of the principal amount of the Notes and all interest and Make-Whole Amount, if any, thereon) and has no power of direction, or right of removal, with respect to the trustee of the Trust, (E) if any of the events described in clause (g) or clause (h) of Section 11 were to occur, the Trust and the res thereof would not be part of the estate of the Company and (F) the creation of the Trust and the depositing of the United States Governmental Securities therein shall not, for purposes of the Code with respect to any holder, result in a taxable event whereby (I) such holder may become liable to pay a tax on any gain deemed to have arisen with respect to such transaction or (II) such holder shall have been deemed to have suffered a loss with respect to such transaction,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(vii)
	
all principal, interest costs, expenses and other sums due and payable to the holders under the this Agreement, the Other Agreements and the Notes on the date the Trust is created shall have been paid in full, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
(viii)
	
the Company shall have delivered to the holders an opinion of independent certified public accountants of recognized national standing selected by the Company, reasonably satisfactory to the Required Holders and prepared at the expense of the Company (provided that the Company shall have the right to negotiate with such accountants regarding the cost of furnishing such opinion), stating that under GAAP the creation of the Trust and the depositing of the United States Governmental Securities therein shall not result, with respect to any holder, in an exchange of the Note or Notes of such holder for all or part of such United States Governmental Securities which exchange would result in a gain or loss being realized by such holder under GAAP in respect of such transaction,

	
 
	
 
	
 
	
 
	
 
	
 

	
then, and in that case, all obligations of the Company under this Agreement, the Other Agreements and the Notes shall be discharged; provided, however, if the contribution to the Trust of any United States Governmental Securities is invalidated, declared to be fraudulent or preferential, set aside, or if any such United States Governmental Securities are required to be returned or redelivered to the Company, or any custodian, trustee, receiver or any other Person under any bankruptcy act, state or federal law, common law or equitable cause, then, to the extent of such invalidation, return or redelivery, the obligations under this Agreement, the Other Agreements and the Notes (less any payments, which shall not have been themselves invalidated, returned or redelivered, made thereon from or in respect of the United States Governmental Securities so invalidated, returned or redelivered) shall be revived and restored.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
22.9.
	
GAAP.

	
 
	
 
	
 
	
 
	
 
	
 

	
Where the character or amount of any asset or liability or item of income or expense, or any consolidation or other accounting computation is required to be made for any purpose hereunder, it shall be done in accordance with GAAP as in effect on the date of, or at the end of the period covered by, the financial statements from which such asset, liability, item of income, or item of expense, is derived, or, in the case of any such computation, as in effect on the date as of which such computation is required to be determined, provided, that if any term defined herein includes or excludes amounts, items or concepts that would not be included in or excluded from such term if such term was defined with reference solely to generally accepted accounting principles, such term will be deemed to include or exclude such amounts, items or concepts as set forth herein.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
2.10.
	
Usury.

	
 
	
 
	
 
	
 
	
 
	
 

	
It is the intention of the parties hereto to comply with all applicable usury laws; accordingly, it is agreed that notwithstanding any provision to the contrary herein or in the Notes, or in any of the documents securing payment thereof or otherwise relating hereto, no such provision shall require the payment or permit the collection of interest in excess of the highest rate allowed by applicable law (the "Maximum Rate"). If any excess of interest in such respect is provided for, or shall be adjudicated to be so provided for, herein or in the Notes or in any of the documents securing payment thereof or otherwise relating hereto, then in such event.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(a)
	
the provisions of this Section 22.10 shall govern and control,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(b)
	
neither the Company, endorsers or Restricted Subsidiaries, nor their heirs, legal representatives, successors or assigns nor any other party liable for the payment on the Notes, shall be obligated to pay the amount of such interest to the extent that it is in excess of the Maximum Rate,

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(c)
	
any such excess with respect to any such Note which may have been collected shall, at the election of the holder of such Note, be either applied as a credit against the then unpaid principal amount on such Note or refunded to the Company, and

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
(d)
	
the provisions hereof and of the Notes and any documents securing payment thereof shall be automatically reformed so that the effective rate of interest shall be reduced to the Maximum Rate. For the purpose of determining the Maximum Rate, all interest payments with respect hereto shall be amortized, prorated and spread throughout the full term of the Notes so that the effective rate of interest thereunder is uniform throughout the term thereof.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
[Remainder of page intentionally left blank. Next page is signature page.]

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

 

If you are in agreement with the foregoing, please sign the form of agreement on the accompanying counterpart of this Agreement and return it to the Company, whereupon the foregoing shall become a binding agreement between you and the Company.

 

	
Very truly yours,

	
 

	
SEITEL, INC.

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
By:
	
 

	
 
	
 

	
Name:
	
 

	
 
	
 

	
Title:
	
 

 

The foregoing is hereby agreed to

as of the date thereof.

 

[PURCHASER]

 

 

By __________________________

Name: 

Title:

SCHEDULE A

INFORMATION RELATING TO PURCHASERS

	
Purchaser Name
	
THE GUARDIAN INSURANCE & ANNUITY COMPANY , INC.

	
Name in Which Note is Registered
	
CUDD & CO.

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-1; $799,065.00

Second Closing:      RH-20; $700,935.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

The Chase Manhattan Bank

ABA # 021-000-021

Chase/NYC/CTR/BNF

A/C 900-9-000200

Reference A/C # G53637, GIAC - Guardian Tradition

Re: (See "Accompanying information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
The Guardian Insurance & Annuity Company, Inc.

c/o The Guardian Life Insurance Company of America

7 Hanover Square

New York, NY 10004-2616

Attn:      Investment Accounting Dept. 17-B

Fax:      212-598-7011

	
Address for All other Notices
	
The Guardian Insurance & Annuity Company, Inc.

c/o The Guardian Life Insurance Company of America

7 Hanover Square

New York, NY 10004-2616

Attn:      Raymond J. Henry

     Investment Department 20-D

Fax:      212-919-2656 / 2658

	
Other Instructions
	
the guardiAn INSURANCE & ANNUITY COMPANY, INC.

By______________________________

Name:

Title:

	
Instructions re Delivery of Notes
	
Chase Manhattan Bank

4 New York Plaza

Ground Floor Receive Window

New York, NY 10004

Re: A/C # G53637, GIAC - Guardian Tradition

with a carbon copy to:

The Guardian Life Insurance Company of America

7 Hanover Square, 20B

New York, New York 10004

Attn:     Kevin Carey

	
Tax Identification Number
	
13-6022143

  
	
Purchaser Name
	
FORT DEARBORN LIFE INSURANCE COMPANY - INTEREST SENSITIVE PORTFOLIO

	
Name in Which Note is Registered
	
STRAFE AND CO.

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-2; $1,000,000.00

Second Closing:      $0

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Bank One

ABA # 044-000-037

For further credit to Bank One

Acct. # 980401787

Attn:     A/C # 2600218700

     Ft. Dearborn Life Insurance Company - Guardian ISP

Re: (See "Accompanying information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Fort Dearborn Life Insurance Company

c/o The Guardian Life Insurance Company of America

7 Hanover Square

New York, NY 10004-2616

Attn:      Investment Accounting Dept. 17-B

Fax:      212-598-7011

	
Address for All other Notices
	
Fort Dearborn Life Insurance Company

c/o Guardian Asset Management Corp.

Fixed Income Securities

7 Hanover Square - 20D

New York, NY 10004-2616

Attn:      Raymond J. Henry

Fax:      212-919-2656 / 2658

	
Other Instructions
	
FORT DEARBORN LIFE INSURANCE COMPANY

By:     Guardian Asset Management Corp.

By______________________________

Name:

Title:

	
Instructions re Delivery of Notes
	
Fort Dearborn Life Insurance Company

c/o Bank One

1900 Polaris Parkway

Columbus, OH 43240

Attn:     Trade Processing

F/A/O:     A/C # 2600218700 FDL - ISP

with a carbon copy to:

The Guardian Life Insurance Company of America

7 Hanover Square, 20B

New York, New York 10004

Attn:     Kevin Carey

	
Tax Identification Number
	
31-0649116

  

  
	
Purchaser Name
	
FORT DEARBORN LIFE INSURANCE COMPANY - MARKET VALUE ANNUITY ACCOUNT

	
Name in Which Note is Registered
	
STRAFE AND CO.

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-3; $500,000.00

Second Closing:      $0

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Bank One

ABA # 044-000-037

For further credit to Bank One

Acct. # 980401787

Attn:     A/C # 2600218703

     Ft. Dearborn Life Insurance Company - Guardian MVA

Re: (See "Accompanying information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Fort Dearborn Life Insurance Company

c/o The Guardian Life Insurance Company of America

7 Hanover Square

New York, NY 10004-2616

Attn:      Investment Accounting Dept. 17-B

Fax:      212-598-7011

	
Address for All other Notices
	
Fort Dearborn Life Insurance Company

c/o Guardian Asset Management Corp.

Fixed Income Securities

7 Hanover Square - 20D

New York, NY 10004-2616

Attn:      Raymond J. Henry

Fax:      212-919-2656 / 2658

	
Other Instructions
	
FORT DEARBORN LIFE INSURANCE COMPANY

By:     Guardian Asset Management Corp.

By______________________________

Name:

Title:

	
Instructions re Delivery of Notes
	
Fort Dearborn Life Insurance Company

c/o Bank One

1900 Polaris Parkway

Columbus, OH 43240

Attn:     Trade Processing

F/A/O:     A/C # 2600218703 FDL - MVA

with a carbon copy to:

The Guardian Life Insurance Company of America

7 Hanover Square, 20B

New York, New York 10004

Attn:     Kevin Carey

	
Tax Identification Number
	
31-0649116

  

  
	
Purchaser Name
	
THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA

	
Name in Which Note is Registered
	
CUDD & CO.

	
Note Registration Number;

Principal Amount
	
First Closing:      RI-1; $5,000,000.00

          RI-2; $4,196,262.00

Second Closing:      RI-12; $2,803,738.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

The Chase Manhattan Bank

ABA # 021-000-021

Chase/NYC/CTR/BNF

A/C 900-9-000200

Reference A/C # G05978, Guardian Life

Re: (See "Accompanying information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.34% Series I Senior Notes due October 15, 2011

PPN:               816074 C# 3

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
The Guardian Life Insurance Company of America

7 Hanover Square

New York, NY 10004-2616

Attn:      Investment Accounting Dept. 17-B

Fax:      212-598-7011

	
Address for All other Notices
	
The Guardian Life Insurance Company of America

7 Hanover Square

New York, NY 10004-2616

Attn:      Raymond J. Henry

     Investment Department 20-D

Fax:      212-919-2656 / 2658

	
Other Instructions
	
the guardiAn life INSURANCE COMPANY of america

By______________________________

Name:

Title:

	
Instructions re Delivery of Notes
	
Chase Manhattan Bank

4 New York Plaza

Ground Floor Receive Window

New York, NY 10004

Re: A/C # G05978 - Guardian Life

with a carbon copy to:

The Guardian Life Insurance Company of America

7 Hanover Square, 20B

New York, New York 10004

Attn:     Kevin Carey

	
Tax Identification Number
	
13-6022143

  

  
	
Purchaser Name
	
BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA

	
Name in Which Note is Registered
	
CUDD & CO.

	
Note Registration Number;

Principal Amount
	
First Closing:      RI-3; $3,831,776.00

Second Closing:      RI-13; $1,168,224.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

The Chase Manhattan Bank

ABA # 021-000-021

Chase/NYC/CTR/BNF

A/C 900-9-000200

Reference A/C # G07064, Berkshire Life Insurance

Re: (See "Accompanying information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.34% Series I Senior Notes due October 15, 2011

PPN:               816074 C# 3

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Berkshire Life Insurance Company of America

c/o The Guardian Life Insurance Company of America

7 Hanover Square

New York, NY 10004-2616

Attn:      Investment Accounting Dept. 17-B

Fax:      212-598-7011

	
Address for All other Notices
	
Berkshire Life Insurance Company of America

c/o The Guardian Life Insurance Company of America

7 Hanover Square

New York, NY 10004-2616

Attn:      Raymond J. Henry

     Investment Department 20-D

Fax:      212-919-2656 / 2658

	
Other Instructions
	
BERKSHIRE life INSURANCE COMPANY of america

By______________________________

Name:

Title:

	
Instructions re Delivery of Notes
	
Chase Manhattan Bank

4 New York Plaza

Ground Floor Receive Window

New York, NY 10004

Re: A/C # G07064 - Berkshire Life Insurance

with a carbon copy to:

The Guardian Life Insurance Company of America

7 Hanover Square, 20B

New York, New York 10004

Attn:     Kevin Carey

	
Tax Identification Number
	
13-6022143

  

  
	
Purchaser Name
	
MONY LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
J. ROMEO & CO.

	
Note Registration Number;

Principal Amount
	
First Closing:      RI-4; $11,495,327.00

Second Closing:      RI-14; $3,504,673.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

JP Morgan Chase Manhattan Bank

ABA # 021-000-021

For credit to Private Income Processing

Acct. # 900-9000-200

For further credit to Acct. # G52963

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.34% Series I Senior Notes due October 15, 2011

PPN:               816074 C# 3

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
JP Morgan Chase Manhattan Bank

14201 N. Dallas Parkway, 13th Floor

Dallas, TX 75254-2917

Fax:     469-477-1904

with a copy to:

MONY Life Insurance Company

1740 Broadway

New York, NY 10019

Attn:     Securities Custody Division

     M.D. 6-39A

Fax:     212-708-2152

	
Address for All other Notices
	
MONY Life Insurance Company

1740 Broadway

New York, NY 10019

Attn:     Capital Management Unit

Fax:     212-708-2491

	
Other Instructions
	
MONY LIFE INSURANCE COMPANY

By:___________________________________

Name:

Title: 

	
Instructions re Delivery of Notes
	
MONY Life Insurance Company

1740 Broadway

New York, NY 10019

Attn:     Law Department

	
Tax Identification Number
	
13-1632487

  

 

 

  
	
Purchaser Name
	
NATIONWIDE LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
NATIONWIDE LIFE INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-4; $9,000,000.00

Second Closing:      $0

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

The Bank of New York

ABA # 021-000-018

BNF: IOC566

F/A/O Nationwide Life Insurance Company

Attn:     P&I Department

     PPN: 816074 C@ 5

Re:      (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Nationwide Life Insurance Company

c/o The Bank of New York

P.O. Box 19266

Attn:     P&I Department

Newark, NJ 07195

with a copy to:

Nationwide Life Insurance Company

One Nationwide Plaza (1-32-05)

Columbus, OH 43215-2220

Attn:     Investment Accounting

	
Address for All other Notices
	
Nationwide Life Insurance Company

One Nationwide Plaza (1-33-07)

Columbus, OH 43215-2220

Attn:     Corporate Fixed-Income Securities

	
Other Instructions
	
NATIONWIDE LIFE INSURANCE COMPANY

By______________________________

Name:

Title:

	
Instructions re Delivery of Notes
	
The Bank of New York

One Wall Street

3rd Floor, Window A

New York, NY 10286

F/A/O Nationwide Life Insurance Co. Acct. # 267829

	
Tax Identification Number
	
31-4156830

  

  
	
Purchaser Name
	
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY

	
Name in Which Note is Registered
	
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-5; $2,495,327.00

Second Closing:      RH-21; $3,504,673.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

The Bank of New York

ABA # 021-000-018

BNF: IOC566

F/A/O Nationwide Life and Annuity Insurance Company

Attn:     P&I Department

     PPN: 816074 C@ 5

Re:      (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Nationwide Life and Annuity Insurance Company

c/o The Bank of New York

P.O. Box 19266

Attn:     P&I Department

Newark, NJ 07195

with a copy to:

Nationwide Life and Annuity Insurance Company

One Nationwide Plaza (1-32-05)

Columbus, OH 43215-2220

Attn:     Investment Accounting

	
Address for All other Notices
	
Nationwide Life and Annuity Insurance Company

One Nationwide Plaza (1-33-07)

Columbus, OH 43215-2220

Attn:     Corporate Fixed-Income Securities

	
Other Instructions
	
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY

By______________________________

Name:

Title:

	
Instructions re Delivery of Notes
	
The Bank of New York

One Wall Street

3rd Floor, Window A

New York, NY 10286

F/A/O Nationwide Life and Annuity Insurance Co. Acct. # 267961

	
Tax Identification Number
	
31-1000740

  

  
	
Purchaser Name
	
CONNECTICUT GENERAL LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
CIG & CO.

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-6; $2,299,065.00

          RH-7; $2,299,065.00

          RH-8; $2,299,065.00

          RH-9; $766,355.00

          RH-10; $766,355.00

          RH-11; $766,355.00

Second Closing:      RH-22; $700,935.00

          RH-23; $700,935.00

          RH-24; $700,935.00

          RH-25; $233,645.00

          RH-26; $233,645.00

          RH-27; $233,645.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Chase NYC/CTR

ABA # 021-000-021

BNF = CIGNA Private Placements

A/C = 9009001802

Re:      (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
CIG & Co.

c/o CIGNA Investments, Inc.

900 Cottage Grove Road

Hartford, CT 06152-2146

Attn:      Securities Processing S-146

with a copy to:

CIG & Co.

c/o CIGNA Retirement & Investment Services

280 Trumbull Street

Hartford, CT 06103

Attn:      Private and Alternative Investments H16B

Fax:      860-534-7203

and a copy to:

Chase Manhattan Bank

Private Placement Servicing

P.O. Box 1508

Bowling Green Station

New York, NY 10081

Attn:      CIGNA Private Placements

Fax:      212-552-3107 / 1005

	
Address for All other Notices
	
CIG & Co.

c/o CIGNA Retirement & Investment Services

280 Trumbull Street

Hartford, CT 06103

Attn:      Private and Alternative Investments H16B

Fax:      860-534-7203

	
Other Instructions
	
CONNECTICUT GENERAL LIFE INSURANCE COMPANY

By:     CIGNA Investments, Inc. (authorized agent)

     By______________________________

     Name:

     Title:

	
Instructions re Delivery of Notes
	
Deliver Notes, together with CIGNA form entitled "Transmittal of Securities to Custodian", to:

The Chase Manhattan Bank

4 New York Plaza, 11th Floor

New York, NY 10004

Attn:      Jennifer John

with a copy of the above to:

CIGNA Retirement and Investment Services 

Investment Law Department, H16C

280 Trumbull Street

Hartford, CT 06103

Attn:     William Duncan

	
Tax Identification Number
	
13-3574027

  

  
	
Purchaser Name
	
LIFE INSURANCE COMPANY OF NORTH AMERICA

	
Name in Which Note is Registered
	
CIG & CO.

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-12; $2,299,065.00

Second Closing:      RH-28; $700,935.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Chase NYC/CTR

ABA # 021-000-021

BNF = CIGNA Private Placements

A/C = 9009001802

Re:      (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
CIG & Co.

c/o CIGNA Investments, Inc.

900 Cottage Grove Road

Hartford, CT 06152-2146

Attn:      Securities Processing S-146

with a copy to:

CIG & Co.

c/o CIGNA Retirement & Investment Services

280 Trumbull Street

Hartford, CT 06103

Attn:      Private and Alternative Investments H16B

Fax:      860-534-7203

and a copy to:

Chase Manhattan Bank

Private Placement Servicing

P.O. Box 1508

Bowling Green Station

New York, NY 10081

Attn:      CIGNA Private Placements

Fax:      212-552-3107 / 1005

	
Address for All other Notices
	
CIG & Co.

c/o CIGNA Retirement & Investment Services

280 Trumbull Street

Hartford, CT 06103

Attn:      Private and Alternative Investments H16B

Fax:      860-534-7203

	
Other Instructions
	
LIFE INSURANCE COMPANY OF NORTH AMERICA

By:     CIGNA Investments, Inc. (authorized agent)

     By______________________________

     Name:

     Title:

	
Instructions re Delivery of Notes
	
Deliver Notes, together with CIGNA form entitled "Transmittal of Securities to Custodian", to:

The Chase Manhattan Bank

4 New York Plaza, 11th Floor

New York, NY 10004

Attn:      Jennifer John

with a copy of the above to:

CIGNA Retirement and Investment Services 

Investment Law Department, H16C

280 Trumbull Street

Hartford, CT 06103

Attn:     William Duncan

	
Tax Identification Number
	
13-3574027

  

 

  
	
Purchaser Name
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-13; $1,685,981.00

          RI-5; 1,302,803.50

Second Closing:      RH-29; $514,019.00

          RI-15; $397,196.50

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Citibank, N.A.

111 Wall Street

New York, NY 10043

ABA # 021-000-089

For MassMutual Long-Term Pool

Acct. # 4067-3488

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Description of Security:     7.34% Series I Senior Notes due October 15, 2011

PPN:               816074 C# 3

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Custody and Collection Department - F381

With telephonic advice of payment to:

David L. Babson & Company Inc.

Securities Custody and Collection Department

Tel:     413-744-5104 / 5718

	
Address for All other Notices
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Investment Division

	
Other Instructions
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By:     David L. Babson & Company Inc. as Investment Adviser

By:___________________________________

Name:

Title:      

	
Instructions re Delivery of Notes
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111-0001

Attn:     Dean Dulchinos

	
Tax Identification Number
	
04-1590850

  

  
	
Purchaser Name
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-14; $842,990.50

          RI-6; $689,719.50

Second Closing:      RH-30; $257,009.50

          RI-16; $210,280.50

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Chase Manhattan Bank, N.A.

4 Chase MetroTech Center

New York, NY 10081

ABA # 021-000-021

For MassMutual Pension Management

Acct. # 910-2594018

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Description of Security:     7.34% Series I Senior Notes due October 15, 2011

PPN:               816074 C# 3

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Custody and Collection Department - F381

With telephonic advice of payment to:

David L. Babson & Company Inc.

Securities Custody and Collection Department

Tel:     413-744-5104 / 5718

	
Address for All other Notices
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Investment Division

	
Other Instructions
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By:     David L. Babson & Company Inc. as Investment Adviser

By:___________________________________

Name:

Title:      

	
Instructions re Delivery of Notes
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111-0001

Attn:     Dean Dulchinos

	
Tax Identification Number
	
04-1590850

  

 

  
	
Purchaser Name
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-15; $842,990.50

          RI-7; $689,719.50

Second Closing:      RH-31; $257,009.50

          RI-17; $210,280.50

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Citibank, N.A.

111 Wall Street

New York, NY 10043

ABA # 021-000-089

For MassMutual Spot Priced Contract

Acct. # 3890-4953

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Description of Security:     7.34% Series I Senior Notes due October 15, 2011

PPN:               816074 C# 3

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Custody and Collection Department - F381

With telephonic advice of payment to:

David L. Babson & Company Inc.

Securities Custody and Collection Department

Tel:     413-744-5104 / 5718

	
Address for All other Notices
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Investment Division

	
Other Instructions
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By:     David L. Babson & Company Inc. as Investment Adviser

By:___________________________________

Name:

Title:      

	
Instructions re Delivery of Notes
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111-0001

Attn:     Dean Dulchinos

	
Tax Identification Number
	
04-1590850

  

  
	
Purchaser Name
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RI-8; $574,766.25

Second Closing:      RI-18; $175,233.75

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Citibank, N.A.

111 Wall Street

New York, NY 10043

ABA # 021-000-089

For MassMutual Structured Settlement Fund

Acct. # 4065-5423

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.34% Series I Senior Notes due October 15, 2011

PPN:               816074 C# 3

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Custody and Collection Department - F381

With telephonic advice of payment to:

David L. Babson & Company Inc.

Securities Custody and Collection Department

Tel:     413-744-5104 / 5718

	
Address for All other Notices
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Investment Division

	
Other Instructions
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By:     David L. Babson & Company Inc. as Investment Adviser

By:___________________________________

Name:

Title:      

	
Instructions re Delivery of Notes
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111-0001

Attn:     Dean Dulchinos

	
Tax Identification Number
	
04-1590850

  

 

  
	
Purchaser Name
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-16; $229,906.50

          RI-9; $229,906.50

Second Closing:      RH-32; $70,093.50

          RI-19; $70,093.50

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Chase Manhattan Bank, N.A.

4 Chase MetroTech Center

New York, NY 10081

ABA # 021-000-021

For MassMutual IFM Non-Traditional

Acct. # 910-2509073

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Description of Security:     7.34% Series I Senior Notes due October 15, 2011

PPN:               816074 C# 3

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Custody and Collection Department - F381

With telephonic advice of payment to:

David L. Babson & Company Inc.

Securities Custody and Collection Department

Tel:     413-744-5104 / 5718

	
Address for All other Notices
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Investment Division

	
Other Instructions
	
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By:     David L. Babson & Company Inc. as Investment Adviser

By:___________________________________

Name:

Title:      

	
Instructions re Delivery of Notes
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111-0001

Attn:     Dean Dulchinos

	
Tax Identification Number
	
04-1590850

  

  
	
Purchaser Name
	
C.M. LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
C.M. LIFE INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-17; $229,906.50

          RI-10; $153,271.00

Second Closing:      RH-33; $70,093.50

          RI-20; $46,729.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Citibank, N.A.

111 Wall Street

New York, NY 10043

ABA # 021-000-089

For Segment 43 - Universal Life

Acct. # 4068-6561

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Description of Security:     7.34% Series I Senior Notes due October 15, 2011

PPN:               816074 C# 3

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
C.M. Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Custody and Collection Department - F381

With telephonic advice of payment to:

David L. Babson & Company Inc.

Securities Custody and Collection Department

Tel:     413-744-5104 / 5718

	
Address for All other Notices
	
C.M. Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Investment Division

	
Other Instructions
	
C.M. LIFE INSURANCE COMPANY

By:     David L. Babson & Company Inc. as Investment Sub-Adviser

By:___________________________________

Name:

Title:      

	
Instructions re Delivery of Notes
	
Massachusetts Mutual Life Insurance Company

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111-0001

Attn:     Dean Dulchinos

	
Tax Identification Number
	
06-1041383

  

  
	
Purchaser Name
	
MASSMUTUAL ASIA LIMITED

	
Name in Which Note is Registered
	
GERLACH & CO.

	
Note Registration Number;

Principal Amount
	
First Closing:      RI-11; $191,588.75

Second Closing:      RI-21; $58,411.25

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Citibank, N.A.

111 Wall Street

New York, NY 10043

ABA # 021-000-089

Acct. # 30413797

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.34% Series I Senior Notes due October 15, 2011

PPN:               816074 C# 3

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
MassMutual Asia Limited

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Custody and Collection Department - F381

With telephonic advice of payment to:

David L. Babson & Company Inc.

Securities Custody and Collection Department

Tel:     413-744-5104 / 5718

	
Address for All other Notices
	
MassMutual Asia Limited

c/o David L. Babson & Company Inc.

1295 State Street

Springfield, MA 01111

Attn:     Securities Investment Division

	
Other Instructions
	
MASSMUTUAL ASIA LIMITED

By:     David L. Babson & Company Inc. as Investment Sub-Adviser

By:___________________________________

Name:

Title:      

	
Instructions re Delivery of Notes
	
Citibank NA

333 West 34th Street

3rd Floor Securities Vault

New York, NY 10001

Re:     Acct. # 849-195

	
Tax Identification Number
	
None

  

 

  
	
Purchaser Name
	
ALLSATE LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
ALLSTATE LIFE INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RG-1; $7,663,551.00

Second Closing:      RG-6; $2,336,449.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Harris Trust and Savings Bank

ABA # 071-000-288

BNF = Allstate Life Insurance Company Collection Acct. # 168-117-0

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.04% Series G Senior Notes due October 15, 2006

PPN:               816074 C* 7

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Allstate Insurance Company

Investment Operations - Private Placements

3075 Sanders Road, Suite G4A

Northbrook, IL 60062-7127

Tel:     847-402-6672

Fax:     847-326-7032

	
Address for All other Notices
	
Allstate Insurance Company

Private Placements Department

3075 Sanders Road, Suite G5D

Northbrook, IL 60062-7127

Tel:     847-402-8922

Fax:     847-402-3092

	
Other Instructions
	
ALLSTATE LIFE INSURANCE COMPANY

By:___________________________________

Name:

Title:      

By:___________________________________

Name:

Title:

Authorized Signatories

	
Instructions re Delivery of Notes
	
Harris Trust and Savings Bank

111 West Monroe Street, 6W

Chicago, IL 60603

Attn:     Valerie Haney

For Allstate Life Insurance Company Safekeeping Acct. # 846627

with a carbon copy to:

Allstate Insurance Company

3075 Sanders Road, Suite G5A

Northbrook, IL 60062-7127

Attn:     Doris Bryant

Fax:     847-402-6639

	
Tax Identification Number
	
36-2554642

  

  
	
Purchaser Name
	
PRINCIPAL LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
PRINCIPAL LIFE INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RG-2; $4,875,000.00

          RG-3; $1,125,000.00

          RG-4; $750,000.00

          RG-5; $750,000.00

Second Closing:      RG-7; $1,625,000.00

          RG-8; $375,000.00

          RG-9; $250,000.00

          RG-10; $250,000.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Wells Fargo Bank Iowa, N.A.

7th & Walnut Streets

Des Moines, IA 50309

ABA # 073-000-228

For credit to Principal Life Insurance Company

Acct. # 0000014752

OBI PFGSE (S) B0064135**

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.04% Series G Senior Notes due October 15, 2006

PPN:               816074 C* 7

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Principal Capital Management, LLC

801 Grand Avenue

Des Moines, IA 50392-0800

Attn:     Investment Accounting - Securities

Tel:     515-247-0689

Fax:     515-248-2643

	
Address for all other Notices
	
Principal Capital Management, LLC

801 Grand Avenue

Des Moines, IA 50392-0800

Attn:     Investment Department - Securities

Tel:     515-247-3495

Fax:     515-248-2490

	
Other Instructions
	
PRINCIPAL LIFE INSURANCE COMPANY

By:     Principal Capital Management, LLC,

     a Delaware limited liability company,

     its authorized signatory

     By:___________________________________

     Name:

     Title: 

     By:___________________________________

     Name:

     Title:     

	
Instructions re Delivery of Notes
	
Principal Capital Management, LLC

801 Grand Avenue

Des Moines, IA 50392-0800

Attn:     Jon C. Heiny, Esq.

	
Tax Identification Number
	
42-0127290

  

  
	
Purchaser Name
	
PHOENIX LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
PHOENIX LIFE INSURANCE COMPANY

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-18; $5,364,486.00

Second Closing:      RH-34; $1,635,514.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

Chase Manhattan Bank, N.A.

New York, NY

ABA # 021-000-021

Acct. # 900-9000-200

Acct. Name: Income Processing

Ref:     G05123

     Phoenix Life

     PPN = 816074 C@ 5

     OBI = Seitel, Inc.

     Rate = [coupon]

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
Phoenix Life Insurance Company

c/o Phoenix Investment Partners

P.O. Box 150480

56 Prospect Street

Hartford, CT 06115-0480

Attn:     Private Placements

	
Address for All other Notices
	
Phoenix Life Insurance Company

c/o Phoenix Investment Partners

P.O. Box 150480

56 Prospect Street

Hartford, CT 06115-0480

Attn:     Private Placements

	
Other Instructions
	
PHOENIX LIFE INSURANCE COMPANY

By:___________________________________

Name:

Title:      

	
Instructions re Delivery of Notes
	
Phoenix Life Insurance Company

One American Row

P.O. Box 5056

Hartford, Connecticut 06102-5056

Attn:     John Mulrain

     Law Department

	
Tax Identification Number
	
06-0493340

  

 

  
	
Purchaser Name
	
AMERICAN INVESTORS LIFE INSURANCE COMPANY

	
Name in Which Note is Registered
	
HARE & CO.

	
Note Registration Number;

Principal Amount
	
First Closing:      RH-19; $3,831,777.00

Second Closing:      RH-35; $1,168,223.00

	
Payment on Account of Note          

     Method

     Account Information
	

Federal Funds Wire Transfer

The Bank of New York

New York, NY

ABA # 021-000-018

BNF: IOC566

Attn:     P & I Department

Ref:      American Investors Life Account 010048

     PPN: 816074 C@ 5

Re:     (see "Accompanying Information" below)

	
Accompanying Information
	
Name of Company:          SEITEL, INC.

Description of Security:     7.19% Series H Senior Notes due October 15, 2008

PPN:               816074 C@ 5

Due Date and Application (as among principal, make whole and interest) of the payment being made:

	
Address for Notices Related to Payments
	
American Investors Life Insurance Company

c/o AmerUs Capital Management

699 Walnut Street, Suite 300

Des Moines, IA 50309

Attn:     Glena Rowley

Tel:     515-362-3655

Fax:     515-283-3439

	
Address for All other Notices
	
American Investors Life Insurance Company

c/o AmerUs Capital Management

699 Walnut Street, Suite 300

Des Moines, IA 50309

Attn:     Steve Sweeney

Tel:     515-362-3542

Fax:     515-362-3587

	
Other Instructions
	
AMERICAN INVESTORS LIFE INSURANCE COMPANY

By:     AmerUs Capital Management Group, Inc., its authorized attorney-in-fact

By:___________________________________

Name:

Title:      

	
Instructions re Delivery of Notes
	
The Bank of New York

One Wall Street

3rd Floor, Window A

F/A/O American Investors Life Insurance Company, A/C # 010048

New York, NY 10286

Attn:     Rich Reinhold 

     212-635-4611

or:     Anthony Marrero

     212-635-4608

	
Tax Identification Number
	
48-0696320 (American Investors Life Insurance Company)

13-6062916 (Hare & Co.)

  

SCHEDULE B

DEFINED TERMS

As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

Accredited Institution -- means any Person who is an "accredited investor" within the meaning of such term set forth in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

Affiliate -- means, at any time, 

      (a)     with respect to any Person other than the Company, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such Person, and

      (b)     with respect to the Company, a Person (other than a Wholly-Owned Restricted Subsidiary),

           (i)     that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, the Company,

           (ii)     that at such time beneficially owns or holds, directly or indirectly, ten percent (10%) or more of the Voting Stock of the Company, or

           (iii)     ten percent (10%) or more of the Voting Stock of which is at such time beneficially owned or held by the Company or any one or more of the Subsidiaries.

As used in this definition, "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting Securities, by contract or otherwise.

Agreement -- is defined in Section 17.3.

Board of Directors -- at any time means the board of directors of the Company or any committee thereof which, in the instance, shall have the lawful power to exercise the power and authority of such board of directors.

Business Day -- means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in Houston, Texas or New York, New York are required or authorized to be closed.

Capital Lease -- means a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

Capital Lease Obligation -- means, with respect to any Person and a Capital Lease, the amount of the obligation of such Person as the lessee under such Capital Lease which would, in accordance with GAAP, appear as a liability on a balance sheet of such Person.

Closings -- is defined in Section 3.1.

Closing Date -- is defined in Section 3.1.

Code -- means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.

Company -- is defined in the introductory paragraph of this Agreement.

Confidential Information -- is defined in Section 20.

Consolidated Debt -- means, as of any date of determination, the total of all Debt of the Company and the Restricted Subsidiaries outstanding on such date, after eliminating all offsetting debits and credits between the Company and the Restricted Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and the Restricted Subsidiaries in accordance with GAAP, provided that Consolidated Debt shall not include Qualified Capital Obligations.

Consolidated Interest Expense -- means, with respect to any period, the sum (without duplication) of the following (in each case, eliminating all offsetting debits and credits between the Company and the Restricted Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and the Restricted Subsidiaries in accordance with GAAP): 

      (a)     all interest in respect of Debt of the Company and the Restricted Subsidiaries (including imputed interest on Capital Lease Obligations) deducted in determining Consolidated Net Income for such period, and 

      (b)     all debt discount and expense amortized or required to be amortized in the determination of Consolidated Net Income for such period.

Consolidated Net Income -- means, with reference to any period, the net income (or loss) of the Company and the Restricted Subsidiaries for such period (taken as a cumulative whole), as determined in accordance with GAAP, after eliminating all offsetting debits and credits between the Company and the Restricted Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of the Company and the Restricted Subsidiaries in accordance with GAAP, provided that there shall be excluded:

      (a)     any gains resulting from any write-up of any assets (but not any loss resulting from any write-down of any assets),

      (b)     the income (or loss) of any Person accrued prior to the date it becomes a Restricted Subsidiary or is merged into or consolidated with the Company or a Restricted Subsidiary, and the income (or loss) of any Person, substantially all of the assets of which have been acquired in any manner by the Company or any Restricted Subsidiary, realized by such other Person prior to the date of acquisition, 

      (c)     in the case of a successor to the Company by consolidation or merger or as a transferee of its assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets,

      (d)     any aggregate net gain (but not any aggregate net loss) during such period arising from the sale, conversion, exchange or other disposition of capital assets (such term to include, without limitation, (i) all non-current assets and, without duplication, (ii) the following, whether or not current: all fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets, and all securities),

      (e)     any portion of such net income that cannot be freely converted into United States Dollars,

      (f)     the income (or loss) of any Person (other than a Restricted Subsidiary) in which the Company or any Restricted Subsidiary has an ownership interest, except to the extent that any such income has been actually received by the Company or such Restricted Subsidiary in the form of cash dividends or similar cash distributions,

      (g)     any gain arising from the acquisition of any security, or the extinguishment, under GAAP, of any Debt, of the Company or any Restricted Subsidiary,

      (h)     any net income or gain or any net loss during such period from (i) any change in accounting principles in accordance with GAAP or (ii) any prior period adjustments resulting from any change in accounting principles in accordance with GAAP, and

      (i)     any net income or gain (but not any net loss) during such period from (i) any extraordinary items or (ii) any discontinued operations or the disposition thereof.

Consolidated Net Worth -- means, at any time, the sum, without duplication, of (a) the total stockholders' equity which would be shown in consolidated financial statements of the Company and the Restricted Subsidiaries prepared at such time in accordance with GAAP plus (b) Qualified Capital.

Consolidated Tangible Assets -- means, at any time, Consolidated Total Assets at such time, minus

      (a)     deferred assets, other than prepaid expenses which are refundable;

     (b)     patents, copyrights, trademarks, trade names, service marks, brand names, franchises, goodwill, experimental expenses and other similar intangibles;

      (c)     unamortized debt discount and expense; and

      (d)     all other property which would be classified as intangible under GAAP.

Consolidated Total Assets -- means, at any time, the amount at which the total assets of the Company and the Restricted Subsidiaries would be shown in consolidated financial statements of the Company and the Restricted Subsidiaries prepared at such time in accordance with GAAP, after deduction of depreciation, amortization and all other properly deductible valuation reserves.

Contingent Optional Prepayment -- is defined in Section 8.2.

Debt -- means, with respect to any Person, without duplication,

      (a)     its obligations for borrowed money;

      (b)     its obligations in respect of banker's acceptances, other acceptances, letters of credit and other instruments serving a similar function issued or accepted by banks and other financial institutions for the account of such Person (whether or not incurred in connection with the borrowing of money);

      (c)     its obligations that are evidenced by bonds, notes, debentures or similar instruments;

      (d)     its obligations for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including, without limitation, all obligations created or arising under any conditional sale or other title retention agreement with respect to any such property);

      (e)     its Capital Lease Obligations;

      (f)     its obligations in respect of all mandatorily redeemable preferred stock of such Person;

      (g)     its obligations for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such obligations); and

      (h)     any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (g) hereof.

Debt of any Person shall include all obligations of such Person of the character described in clauses (a) through (h) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.

Default -- means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

Default Rate -- means the rate of interest for overdue payments as stated in the first paragraph of the relevant Series of Notes.

Designated Portion -- is defined in Section 10.6(b)(i).

Disposition Value -- is defined in Section 10.6(c)(i).

EBITDA -- means, in respect of any period, Consolidated Net Income for such period minus

      (a)     to the extent added in the computation of such Consolidated Net Income, each of the following:

           (i)     extraordinary gains, net of extraordinary losses, and

           (ii)     gains, net of losses, arising from the disposition of property other than in the ordinary course of business, plus

      (b)     to the extent deducted in the computation of such Consolidated Net Income, each of the following:

           (i)     Consolidated Interest Expense, net of interest and other investment income,

           (ii)     taxes imposed on or measured by income or excess profits of the Company and the Restricted Subsidiaries,

           (iii)     the amount of all depreciation, depletion and amortization allowances and other non-cash expenses of the Company and the Restricted Subsidiaries,

           (iv)     extraordinary losses, net of extraordinary gains, and

           (v)     losses, net of gains, arising from the disposition of property other than in the ordinary course of business.

Environmental Laws -- means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials or wastes, air emissions and discharges to waste or public systems.

Equity Interest -- means

      (a)     the outstanding Voting Stock of a corporation or other business entity,

      (b)     the interest in the capital or profits of a corporation, limited liability company, partnership or joint venture, or 

      (c)     the beneficial interest in a trust or estate.

ERISA -- means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect. 

ERISA Affiliate -- means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code.

Event of Default -- is defined in Section 11.

Exchange Act -- means the Securities Exchange Act of 1934, as amended.

Excluded Transfer -- is defined in Section 10.6.

Fair Market Value -- means, at any time and with respect to any property, the sale value of such property that would be realized in an arm's-length sale at such time between an informed and willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell, respectively).

GAAP -- means accounting principles as promulgated from time to time in statements, opinions and pronouncements by the American Institute of Certified Public Accountants and the Financial Accounting Standards Board and in such statements, opinions and pronouncements of such other entities with respect to financial accounting of for-profit entities as shall be accepted by a substantial segment of the accounting profession in the United States.

Governmental Authority -- means

      (a)     the government of

           (i)     the United States of America or any State or other political subdivision thereof, or

           (ii)     any jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or

     (b)     any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

Guaranty -- means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:

      (a)     to purchase such indebtedness or obligation or any property constituting security therefor;

      (b)     to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;

      (c)     to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or

      (d)     otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.

Hazardous Material -- means any and all pollutants, toxic or hazardous wastes or any other substances that might pose a hazard to health or safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or filtration of which is or shall be restricted, prohibited or penalized by any applicable law (including, without limitation, asbestos, urea formaldehyde foam insulation and polychlorinated biphenyls).

holder -- means, at any time and with respect to any Note, the Person in whose name such Note is registered at such time in the register maintained by the Company pursuant to Section 13.1.

Institutional Investor -- means (a) any original purchaser of a Note or an Affiliate thereof, (b) any holder of more than five percent (5%) in aggregate principal amount of the Notes then outstanding, and (c) any Accredited Institution.

Investment -- means any investment, made in cash or by delivery of property, by the Company or any of the Subsidiaries in any Person, whether by acquisition of stock, indebtedness or other obligation or Security (including, without limitation, any interests in any partnership or joint venture), or by loan, Guaranty, advance, capital contribution or otherwise; provided that "Investment" does not include trade credit to the extent extended in the ordinary course of business.

Lien -- means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).

Make-Whole Amount -- is defined in Section 8.6.

Material -- means material in relation to the business, operations, affairs, financial condition, assets or properties of the Company and the Restricted Subsidiaries taken as a whole.

Material Adverse Effect -- means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and the Restricted Subsidiaries, taken as a whole, (b) the ability of the Company to perform its obligations under this Agreement and the Notes, (c) the ability of any Restricted Subsidiary to perform its respective obligations under the Subsidiary Guaranty, or (d) the validity or enforceability of this Agreement, the Subsidiary Guaranty or the Notes.

Maximum Rate -- is defined in Section 22.10.

Memorandum -- is defined in Section 5.3.

Multiemployer Plan -- means any Plan that is a "multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).

NAIC Annual Statement -- is defined in Section 6.3.

Net Asset Sale Proceeds Amount -- means, with respect to any Transfer of any property by any Person, an amount equal to the difference of

      (a)     the aggregate amount of the consideration (valued at the Fair Market Value of such consideration at the time of the consummation of such Transfer) received by such Person in respect of such Transfer, minus

      (b)     all ordinary and reasonable out-of-pocket costs and expenses actually incurred by such Person in connection with such Transfer.

Net Proceeds of Common Stock -- means, with respect to any period, cash proceeds (net of all costs and out-of-pocket expenses incurred in connection therewith, including, without limitation, placement, underwriting and brokerage fees and expenses) received by the Company and the Restricted Subsidiaries during such period from the sale of all common stock of the Company, including in such net proceeds:

      (a)     the net amount paid upon issuance and exercise during such period of any right to acquire any common stock, or paid during such period to convert a convertible debt Security to common stock (but excluding any amount paid to the Company upon issuance of such convertible debt Security); and

      (b)     any amount paid to the Company upon issuance of any convertible debt Security that is converted to common stock during such period.

Net Proceeds of Qualified Capital -- means, with respect to any period, cash proceeds (net of all costs and out-of-pocket expenses incurred in connection therewith and in connection with the issuance and sale of any related Trust Preferred Securities, including, without limitation, placement, underwriting and brokerage fees and expenses) received by the Company during such period from the sale of all Qualified Junior Subordinated Notes.

1995 Notes -- means the Company's 7.17% Series A Senior Notes due December 30, 2001 in the original aggregate principal amount of $25,000,000, 7.17% Series B Senior Notes due December 30, 2002 in the original aggregate principal amount of $27,500,000 and 7.48% Series C Senior Notes due December 30, 2002 in the original aggregate principal amount of $22,500,000 issued pursuant to the 1995 Note Purchase Agreement.

1995 Note Purchase Agreement -- means each of the separate Note Purchase Agreements between the Company and the purchasers of the 1995 Notes, dated as of December 28, 1995, as amended from time to time.

1999 Notes -- means the Company's 7.03% Series D Senior Notes due February 15, 2004 in the original aggregate principal amount of $20,000,000, 7.28% Series E Senior Notes due February 15, 2009 in the original aggregate principal amount of $75,000,000 and 7.43% Series F Senior Notes due February 15, 2009 in the original aggregate principal amount of $43,000,000 issued pursuant to the 1999 Note Purchase Agreement.

1999 Note Purchase Agreement -- means each of the separate Note Purchase Agreements between the Company and the purchasers of the 1999 Notes, dated as of February 12, 1999, as amended from time to time.

Notes -- is defined in Section 1.

Officer's Certificate -- means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

Old Notes -- means the 1995 Notes and the 1999 Notes.

Old Note Purchase Agreement -- means the 1995 Note Purchase Agreement and the 1999 Note Purchase Agreement.

Optional Prepayment Date -- is defined in Section 8.2.

Optional Prepayment Notice -- is defined in Section 8.2.

Ordinary Course Transfer -- is defined in Section 10.6.

Other Agreements -- is defined in Section 2.

Other Purchasers -- is defined in Section 2.

PBGC -- means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

Person -- means an individual, partnership, corporation, limited liability company, partnership, association, joint venture, trust, unincorporated organization, or a government or agency or political subdivision thereof.

Plan -- means an "employee benefit plan" (as defined in section 3(3) of ERISA) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.

Prepayment Transfer -- is defined in Section 10.6.

Priority Debt -- means, without duplication, the sum of (a) all Debt of the Company secured by a Lien permitted only by Section 10.4(j) and (b) all Debt of Restricted Subsidiaries (except (i) Debt held by the Company or a Wholly-Owned Restricted Subsidiary, (ii) Debt of a Restricted Subsidiary that is an unsecured guaranty of Senior Debt and that ranks pari passu with the obligations of the Restricted Subsidiaries under the Subsidiary Guaranty, and (iii) Debt of a Restricted Subsidiary secured by a Lien permitted by the provisions of Section 10.4(a) through (i), inclusive).

property or properties -- means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

Purchaser -- is defined in Section 3.1.

Qualified Capital -- means the total amount of capital in respect of Qualified Junior Subordinated Notes and the Trust Preferred Securities related thereto which would, on a consolidated basis, be shown in consolidated financial statements of the Company and the Subsidiaries prepared at such time in accordance with GAAP, provided that in no event shall the aggregate amount of Qualified Capital at any time exceed One Hundred Twenty-Five Million Dollars ($125,000,000).

Qualified Capital Obligations -- means obligations of the Company in respect of any Qualified Junior Subordinated Notes and Qualified Junior Subordinated Guaranties.

Qualified Institutional Buyer -- means you, each of the Other Purchasers, and any Person who is a "qualified institutional buyer," within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

Qualified Junior Subordinated Guaranty -- means, in respect of any issue of Trust Preferred Securities, a Guaranty by the Company to the holders of such Trust Preferred Securities of (a) the payment of all preferred cumulative cash dividends accumulating thereon and (b) the payments due on liquidation or redemption of such Trust Preferred Securities, but only in each case to the extent of funds held by the Special Purpose Trust which shall have issued such Trust Preferred Securities, and the obligations under which Guaranty shall be unsecured and rank subordinate and junior in right of payment to all Senior Debt (including, without limitation, all Debt of the Company under this Agreement, the Other Agreements and the Notes) to the same extent and on the same terms as the Qualified Junior Subordinated Notes issued by the Company to such Special Purpose Trust are subordinated to Senior Debt.

Qualified Junior Subordinated Notes -- means any notes issued by the Company to a Special Purpose Trust in a principal amount equal to the proceeds received by such Special Purpose Trust from the issuance of Trust Preferred Securities and paid by such Special Purpose Trust to the Company in consideration for such notes, which notes shall (a) not mature, or otherwise require the payment of any of the principal thereof, prior to June 1, 2029, (b) be subject to the right of the Company to defer the payment of interest thereon at any time or from time to time for a period of at least twenty (20) consecutive quarterly periods, during which deferral period the Company shall not pay any dividends with respect to any of its capital stock or pay any principal, interest or other amounts owing in respect of any Qualified Capital Obligations or other Subordinated Debt, (c) be unsecured, (d) rank subordinate and junior in right of payment to all Senior Debt (including, without limitation, all Debt of the Company under this Agreement, the Other Agreements and the Notes upon the terms set forth in Exhibit A and (e) when aggregated with all other such notes, not exceed One Hundred Twenty-Five Million Dollars ($125,000,000) in aggregate outstanding principal amount.

Reinvested Transfer -- is defined in Section 10.6.

Required Holders -- means, at any time, the holders of at least a majority in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

Rescission Notice -- is defined in Section 8.2.

Responsible Officer -- means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.

Restricted Investments -- means all Investments except the following:

      (a)     cash;

      (b)     Investments in one or more Restricted Subsidiaries or any Person engaged in the business referred to in Section 10.10 that concurrently with such Investment becomes a Wholly-Owned Restricted Subsidiary;

      (c)     Investments in United States Governmental Securities, provided that such obligations mature within 365 days from the date of acquisition thereof;

      (d)     Investments in certificates of deposit or banker's acceptances issued by an Acceptable Bank, provided that such obligations mature within 365 days from the date of acquisition thereof;

      (e)     Investments in commercial paper given the highest rating by a credit rating agency of recognized national standing and maturing not more than 270 days from the date of creation thereof; and

 

      (f)     Investments in money market mutual funds that invest solely in so-called "money market" instruments maturing not more than one year after the acquisition thereof, which funds have assets in excess of Five Hundred Million Dollars ($500,000,000).

For purposes of this Agreement, an Investment shall be valued at the lesser of (i) cost and (ii) the value at which such Investment is to be shown on the books of the Company and the Restricted Subsidiaries in accordance with GAAP.

As used in this definition of "Restricted Investments":

Acceptable Bank -- means any bank or trust company (i) which is organized under the laws of the United States of America or any State thereof and (ii) which has capital, surplus and undivided profits aggregating at least Five Hundred Million Dollars ($500,000,000).

Restricted Payment -- means, whether effected directly or indirectly,

      (a)     any Distribution in respect of the Company or any Restricted Subsidiary (other than on account of capital stock or other equity interests of a Restricted Subsidiary owned legally and beneficially by the Company or another Restricted Subsidiary), including, without limitation, any Distribution resulting in the acquisition by the Company of Securities which would constitute treasury stock; and

      (b)     any payment, repayment, redemption, retirement, repurchase or other acquisition, direct or indirect, by the Company or any Restricted Subsidiary of, on account of, or in respect of, the principal of any Subordinated Debt (or any installment thereof) prior to the regularly scheduled maturity date thereof (as in effect on the date such Subordinated Debt was originally incurred).

For purposes of this Agreement, the amount of any Restricted Payment made in property shall be the greater of (x) the Fair Market Value of such property (as determined in good faith by the board of directors (or equivalent governing body) of the Person making such Restricted Payment) and (y) the net book value thereof on the books of such Person, in each case determined as of the date on which such Restricted Payment is made.

Distribution -- means, in respect of any corporation, association or other business entity:

      (a)     dividends or other distributions or payments on capital stock or other equity interest of such corporation, association or other business entity (except distributions in such stock or other equity interest); and

      (b)     the redemption or acquisition of such stock or other equity interests or of warrants, rights or other options to purchase such stock or other equity interests (except when solely in exchange for such stock or other equity interests).

Restricted Subsidiary -- means and includes each and every Subsidiary other than any Subsidiary which, at the time of any determination hereunder, has been designated by the Board of Directors and by written notice of the Company to all of the holders to be an Unrestricted Subsidiary; provided, in any event, that each of the following shall at all times constitute a Restricted Subsidiary:

      (a)     each Subsidiary identified as a Restricted Subsidiary on Schedule 5.4; and

      (b)     each Subsidiary which owns, directly or indirectly, more than fifty percent (50%) of the Equity Interest of a Restricted Subsidiary.     

Securities Act -- means the Securities Act of 1933, as amended from time to time.

Security -- means "security" as defined by section 2(1) of the Securities Act.

Senior Debt -- means any Debt of the Company that is not in any manner subordinated in right of payment or security in any respect to the Debt evidenced by the Notes or to any other Debt of the Company.

Senior Financial Officer -- means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.

Series -- means any one or more of the series of Notes issued hereunder.

Series G Notes -- is defined in Section 1.

Series H Notes -- is defined in Section 1.

Series I Notes -- is defined in Section 1.

Special Purpose Trust -- means a statutory business trust created under the laws of the State of Delaware pursuant to the filing of a certificate of trust with the Secretary of State of the State of Delaware, (a) the existence of which shall be for the exclusive purpose of (i) issuing Trust Common Securities to the Company and issuing and selling Trust Preferred Securities to investors, (ii) using the proceeds from such Trust Preferred Securities to acquire Qualified Junior Subordinated Notes and (iii) engaging in only those other activities necessary or incidental to the foregoing, (b) the sole assets of which will be such Qualified Junior Subordinated Notes and the proceeds thereof and (c) the sole source of revenue of which will be payments under such Qualified Junior Subordinated Notes. Notwithstanding anything else herein, any Special Purpose Trust shall be deemed to be an Unrestricted Subsidiary.

Subordinated Debt -- means any Debt or other obligations of the Company (including, without limitation Qualified Capital Obligations) other than Senior Debt.

Subsidiary -- means, as to any Person, any corporation, limited liability company, partnership, joint venture, trust or estate in which such Person or one or more of the Subsidiaries or such Person and one or more of the Subsidiaries own more than fifty percent (50%) of the Equity Interest. Unless the context otherwise clearly requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the Company.

Subsidiary Guaranty -- is defined in Section 4.10.

Substantial Portion -- is defined in Section 10.6(c)(ii).

Successor Corporation -- is defined in Section 10.5.

Total Capitalization -- means, at any time, the sum of Consolidated Debt plus Consolidated Net Worth, in each case at such time.

Transfer -- is defined in Section 10.6(c)(iii).

Trust -- is defined in Section 22.8.

Trust Common Securities -- means, in respect of a Special Purpose Trust, securities issued by such Special Purpose Trust representing common undivided beneficial interests in the assets of such Special Purpose Trust, one hundred percent (100%) of which securities shall be legally and beneficially owned by the Company.

Trust Preferred Securities -- means, in respect of a Special Purpose Trust, securities issued by such Special Purpose Trust, having a stated par value and liquidation value and entitling the holders thereof to the payment (unless deferred) of preferred cumulative cash distributions at a fixed annual rate, representing preferred undivided beneficial interests in the assets of such Special Purpose Trust, provided that at the time of the initial issuance thereof, the Notes shall receive an investment grade rating from, or an investment grade rating of the Notes shall be confirmed by, a nationally recognized rating agency.

United States Governmental Security -- means any direct obligation of, or obligation guaranteed by, the United States of America, or any agency controlled or supervised by or acting as an instrumentality of the United States of America pursuant to authority granted by the Congress of the United States of America, so long as such obligation or guarantee shall have the benefit of the full faith and credit of the United States of America which shall have been pledged pursuant to authority granted by the Congress of the United States of America.

Unrestricted Subsidiary -- means each Subsidiary other than a Restricted Subsidiary.

Voting Stock -- means the capital stock or similar interest of any class or classes (however designated) of a corporation or other business entity, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of the members of the board of directors (or Persons performing similar functions) of a corporation or other business entity.

Wholly-Owned Restricted Subsidiary -- means, at any time, any Restricted Subsidiary one hundred percent (100%) of all of the Equity Interests (except directors' qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company's other Wholly-Owned Restricted Subsidiaries at such time.

SCHEDULE 4.9

CHANGES IN CORPORATE STRUCTURE

 

     None.

SCHEDULE 5.4

SUBSIDIARIES OF THE COMPANY

AND OWNERSHIP OF SUBSIDIARY STOCK

(a)     I.     Restricted Subsidiaries

  
	
Name of Restricted Subsidiary
	
Jurisdiction of Incorporation
	
100% of Stock Owned By:

	
Seitel Data Corp.
	
Delaware
	
Seitel, Inc.

	
Seitel Delaware, Inc.
	
Delaware
	
Seitel, Inc.

	
Seitel Management, Inc.
	
Delaware
	
Seitel, Inc.

	
Seitel Geophysical, Inc.
	
Delaware
	
Seitel, Inc.

	
DDD Energy, Inc.
	
Delaware
	
Seitel, Inc.

	
Seitel Gas & Energy Corp.
	
Delaware
	
Seitel, Inc.

	
Seitel Power Corp.
	
Delaware
	
Seitel, Inc.

	
Seitel Natural Gas, Inc.
	
Delaware
	
Seitel Gas & Energy Corp.

	
Matrix Geophysical, Inc.
	
Delaware
	
Seitel, Inc.

	
Exsol, Inc.
	
Delaware
	
Seitel, Inc.

	
Datatel, Inc.
	
Delaware
	
Seitel Data Corp.

	
Seitel Offshore Corp.
	
Delaware
	
Seitel Data Corp.

	
Geo-Bank, Inc.
	
Texas
	
Seitel, Inc.

	
Alternative Communication Enterprises, Inc.
	
Texas
	
Seitel, Inc.

	
Seitel International, Inc.
	
Cayman Islands
	
Seitel Data Corp.

	
African Geophysical, Inc.
	
Cayman Islands
	
Seitel Geophysical, Inc.

	
Seitel Data, Ltd.
	
Texas (limited partnership)
	
Seitel Delaware, Inc. -- 1% g.p.

Seitel Data Corp. --99% l.p.

	
N360X, L.L.C.
	
Texas- (limited liability company)
	
Seitel Management, Inc - managing member

  

 

 

(b)     II.     Affiliates:

  
	
Name of Unrestricted Subsidiary
	
Jurisdiction of Incorporation
	
100% of Stock Owned By

	
Seitel Canada Holdings, Inc.
	
Delaware
	
Seitel, Inc.

	
Olympic Seismic Ltd.
	
Alberta, Canada
	
SEIC Holdings, Inc.

	
EHI Holdings, Inc.
	
Delaware
	
Seitel Geophysical, Inc.

	
818312 Alberta Ltd.
	
Alberta, Canada
	
Seitel Canada Holdings, Inc.

	
SEIC Holdings, Inc.
	
Alberta, Canada
	
SEIC Partners Limited Partnership

	
SEIC L.L.C.
	
Delaware
	
SEIC Holdings, Ltd.

	
SEIC Partners Limited Partnership
	
Alberta, Canada
	
Seitel Canada Holdings, Inc. - 99.89% l.p.

SEIC, Inc. - .11% g.p.

	
SEIC Trust Administration, Ltd.
	
Alberta, Canada
	
SEIC Holdings, Inc.

	
SEIC, Inc.
	
Delaware
	
Seitel Canada Holdings, Inc.

	
Seitel Canada, L.L.C.
	
Delaware
	
Seitel, Inc.

	
Seitel International, CV
	
Netherlands
	
Seitel Solutions Holdings, L.L.C. -10%

SI Holdings, G.P. - 90%

	
Seitel IP Holdings, L.L.C.
	
Delaware
	
Seitel Solutions, Ltd. - 33%

Seitel Solutions Canada, Ltd. - 33%

Seitel International, CV - 34%

	
Seitel Solutions Canada, Ltd.
	
Alberta, Canada
	
Seitel Solutions, Inc.

	
Seitel Solutions Holdings, L.L.C.
	
Delaware
	
Seitel Solutions, L.L.C.

	
Seitel Solutions, Inc.
	
Delaware
	
Seitel, Inc.

	
Seitel Solutions, L.L.C.
	
Delaware
	
Seitel Solutions, Inc.

	
Seitel Solutions, Ltd.
	
Texas
	
Seitel Solutions, Inc. - 1% g.p.

Seitel Solutions, L.L.C. - 99% l.p.

	
SI Holdings, G.P.
	
Delaware
	
Seitel Solutions, Inc. - 10%

Seitel Solutions, L.L.C. - 90%

  

 

 

Other Affiliates:

	Digitel Data Joint Venture, 50% interest owned by Seitel Offshore Corp.

	Spectrum/SSI Joint Venture, 50% interest owned by Seitel International, Inc.

	TGC/SEI Joint Venture, 50% interest owned by Seitel Data Corp.

	SSC/SEI Joint Venture, 41% interest owned by Seitel Data Corp.

	Marsh Joint Venture, 50% interest owned by Seitel, Data Corp.

	Redmon/Smackover Joint Venture, 40% interest owned by DDD Energy, Inc.

	Vision Energy, Inc., a Delaware corporation, 19% owned by Seitel, Inc.

 

 

(d)     Reference is hereby made to the indebtedness listed on schedule 5.15 hereof. Each such item of indebtedness is guaranteed by the Restricted Subsidiaries pursuant to guaranties that are substantially similar to the Subsidiary Guaranty.

SCHEDULE 5.5

FINANCIAL STATEMENTS

 
1.     Financial statements contained in the Company's Form 10-K for the twelve months ended December 31, 2000.

2.     Financial statements contained in the Company's Form 10-Q for the quarterly period ended March 31, 2001.

3.     Financial statements contained in the Company's Form 10-Q for the quarterly period ended June 30, 2001.

SCHEDULE 5.8

CERTAIN LITIGATION

 

     None.

SCHEDULE 5.11

PATENTS, ETC.

 

     None.

SCHEDULE 5.12

ERISA

 
A.     The following Restricted Subsidiaries are ERISA Affiliates that maintain one or more Plans. There are no employee organizations in respect of any Plan or Multiemployer Plan.

	Datatel, Inc.

	DDD Energy, Inc.

	Matrix Geophysical, Inc.

	Seitel Management, Inc.

	Seitel Data Ltd.

	Seitel Solutions, Ltd.

B.     All of the Restricted Subsidiaries may be considered ERISA Affiliates. The following Plans constitute all "employee benefit plans" with respect to which the Company or any "affiliate" of the Company is a "party-in-interest" or in respect of which the Notes could constitute an "employer security." All plans apply to all ERISA Affiliates listed in A. above except as specifically set forth below.

	Seitel, Inc. 401(k) Plan

	Medical Insurance through Humana Health Plan

	Dental Insurance through Fortis Benefits Insurance Company

	Life Insurance through United of Omaha

	Accidental Death and Dismemberment Insurance through United of Omaha

	Disability Insurance through United of Omaha

	Seitel, Inc. Flexible Employee Benefit Plan administered by Flex Corp.

SCHEDULE 5.15

EXISTING DEBT IN EXCESS OF $100,000

 
Restricted Subsidiaries

1.     Unsecured Senior Notes with an outstanding aggregate principal amount of $28,333,333 as of September 30, 2001 issued pursuant to a Note Purchase Agreement dated as of December 28, 1995.

2.     Unsecured Senior Notes with an outstanding aggregate principal amount of $138,000,000 as of September 30, 2001 issued pursuant to a Note Purchase Agreement dated as of February 12, 1999.

3.     Unsecured revolving line of credit of up to $75,000,000 with Bank One NA as agent pursuant to a Revolving Credit Agreement dated June 29, 2001. The outstanding borrowings under this facility as of September 30, 2001 were approximately $68,900,000.

4.     Capital lease of computer equipment from LINC Monex Leasing, Inc./The Manifest Group. The outstanding principal amount of this capital lease at September 30, 2001 was $193,000.

5.     Loan secured by a pledge of certain seismic data from Heller Financial Leasing, Inc. The outstanding principal amount of this loan at September 30, 2001 was $10,000,000.

6.     Deferred purchase price payable in cash from production from certain producing oil and gas wells to SPV, Inc. The aggregate amount of this deferred purchase price, including principal and imputed interest, was $1,375,000 at September 30, 2001.

Unrestricted Subsidiaries

1.     Secured Revolving Line of Credit of Olympic Seismic Ltd. with the Royal Bank of Canada The outstanding borrowings under this facility as of September 30, 2001 was US$595,000.

SCHEDULE 10.8

CERTAIN AGREEMENTS BY RESTRICTED SUBSIDIARIES

 
1.     Guaranties of unsecured Senior Notes issued by Seitel, Inc. with an outstanding aggregate principal amount of $28,333,333 as of September 30, 2001 issued pursuant to a Note Purchase Agreement dated as of December 28, 1995.

2.     Guaranties of unsecured Senior Notes issued by Seitel, Inc. with an outstanding aggregate principal amount of $138,000,000 as of September 30, 2001 issued pursuant to a Note Purchase Agreement dated as of February 12, 1999.

3.     Guaranties of unsecured revolving line of credit of Seitel, Inc. of up to $75,000,000 with Bank One NA as agent pursuant to a Revolving Credit Agreement dated June 29, 2001. The outstanding borrowings under this facility as of September 30, 2001 were approximately $68,900,000.

4.     Capital lease of computer equipment from LINC Monex Leasing, Inc./The Manifest Group. The outstanding principal amount of this capital lease at September 30, 2001 was $193,000.

5.     Loans and guaranties thereof secured by a pledge of certain seismic data from Heller Financial Leasing, Inc. The outstanding principal amount of this loan at September 30, 2001 was $10,000,000.

6.     Deferred purchase price payable in cash from production from certain producing oil and gas wells to SPV, Inc. The aggregate amount of this deferred purchase price, including principal and imputed interest, was $1,375,000 at September 30, 2001.

EXHIBIT A

Subordination Terms
Note:     The term "Securities" refers to the instruments evidencing the debt subordinated by the following provisions; the term "Holder" refers to a holder of Securities.

SECTION 1.01.     Securities Subordinate to Senior Indebtedness

The Securities shall be subordinated to Senior Indebtedness as set forth in this Article One. The Company covenants and agrees, and each Holder of a Security of any series by such Holder's acceptance thereof likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article One, the indebtedness represented by the Securities of such series and the payment of the principal amount, interest, premium (if any), and such other amounts, if any, payable in respect of each and all of the Securities of such series are hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness; provided, however, that no provision of this Article One shall prevent the occurrence of any default or Event of Default hereunder.

"Senior Notes" means, collectively, (i) (a) the Company's 7.17% Series A Senior Notes due December 30, 2001 in the original aggregate principal amount of $25,000,000, (b) the Company's 7.17% Series B Senior Notes due December 30, 2002 in the original aggregate principal amount of $27,500,000, and (c) the Company's Series C Senior Notes due December 30, 2002 in the original aggregate principal amount of $22,500,000, in each case, issued pursuant to separate Note Purchase Agreements, dated as of December 28, 1995, as such notes and agreements may be amended from time to time, (ii) (a) the Company's 7.03% Series D Senior Notes due February 15, 2004 in the original aggregate principal amount of $20,000,000, (b) the Company's 7.28% Series E Senior Notes due February 15, 2009 in the original aggregate principal amount of $75,000,000, and (c) the Company's Series F Senior Notes due February 15, 2009 in the original aggregate principal amount of $43,000,000, in each case, issued pursuant to separate Note Purchase Agreements, dated as of February 12, 1999, as such notes and agreements may be amended from time to time and (iii) (a) the Company's 7.04% Series G Senior Notes due October 15, 2006 in the original aggregate principal amount of $20,000,000, (b) the Company's 7.19% Series H Senior Notes due October 15, 2008 in the original aggregate principal amount of $50,000,000, and (c) the Company's Series I Senior Notes due October 15, 2011 in the original aggregate principal amount of $37,000,000, in each case, issued pursuant to separate Note Purchase Agreements, dated as of October 15, 2001, as such notes and agreements may be amended from time to time.

"Senior Indebtedness" means the principal of (and premium or make-whole amount, if any) and interest on (including interest, if any, accruing after the filing of a petition initiating any proceeding pursuant to any Federal bankruptcy law or any other applicable Federal or State law) and other amounts due on or in connection with the Senior Notes and any Indebtedness of the Company incurred, assumed or guaranteed by the Company, whether outstanding on the date of the Indenture or thereafter incurred, assumed or guaranteed and all renewals, extensions and refundings of any such Indebtedness of the Company; provided, however, that the following will not constitute Senior Indebtedness:

      (a)     any Indebtedness of the Company as to which, in the instrument creating the same or evidencing the same or pursuant to which the same is outstanding, it is expressly provided that such Indebtedness of the Company shall be subordinated to or pari passu with the Securities;

      (b)     Indebtedness of the Company in respect of the Securities;

      (c)     any Indebtedness of the Company constituting trade accounts payable arising in the ordinary course of business;

      (d)     any Indebtedness of the Company initially issued to any other trust which issues preferred securities or other securities similar to preferred securities; and

      (e)     any Indebtedness of the Company to any Subsidiary of the Company, other than a trust referred to in the preceding clause (d).

SECTION 1.02.     Payment Over of Proceeds upon Dissolution, Etc.

Upon any distribution of assets of the Company in the event of

      (a)     any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or to its assets, or

      (b)     any liquidation, dissolution or other winding up of the Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or

      (c)     any assignment for the benefit of creditors or any other marshalling of assets and liabilities of the Company,

then and in such event:

      (1) the holders of Senior Indebtedness shall be entitled to receive payment in full of all amounts due or to become due on or in respect of all Senior Indebtedness, or provision shall be made for such payment in cash, before the Holders of the Securities of any series are entitled to receive any payment on account of the principal amount, interest, premium (if any), or such other amounts, if any, as may be provided for in respect of the Securities of such series; and

      (2) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which the Holders or the Trustee would be entitled but for the provisions of this Article One, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Securities of such series, shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the principal of, and premium or make-whole amount, if any, and interest on the Senior Indebtedness held or represented by each, to the extent necessary to make payment in full of all Senior Indebtedness remaining unpaid, after giving affect to any concurrent payment or distribution to the holders of such Senior Indebtedness.

In the event that, notwithstanding the foregoing provisions of this Section 1.02, the Trustee or the Holder of any Security of any series shall receive any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Securities of such series, before all Senior Indebtedness is paid in full or payment thereof provided for, and if such fact shall then have been made known to the Trustee as provided in Section 1.11, or, as the case may be, such Holder, then and in such event such payment or distribution shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other person making payment or distribution of assets of the Company for application to the payment of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness.

For purposes of this Article One only, the words "cash, property or securities," or any combination thereof, shall be deemed not to include shares of capital stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinated, at least to the extent provided in this Article One with respect to the Securities, to the payment of all Senior Indebtedness which may at the time be outstanding and to any securities issued to the holders of Senior Indebtedness in respect of the Senior Indebtedness under any such plan of reorganization or readjustment.

SECTION 1.03.     Prior Payment to Senior Indebtedness upon Acceleration of Securities.

In the event that any Securities of any series are declared due and payable before their Stated Maturity, then and in such event the holders of Senior Indebtedness shall be entitled to receive payment in full of all amounts due or to become due on or in respect of all Senior Indebtedness or provision shall be made for such payment in cash, before the Holders of the Securities of such series are entitled to receive any payment (including any payment which may be payable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of the Securities of such series) by the Company on account of the principal of (or premium or make-whole amount, if any) or interest or other amounts on Securities of such series or on account of the purchase or other acquisition of Securities of such series.

In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Securities of any series prohibited by the foregoing provisions of this Section 1.03, and if such facts then shall have been known or thereafter shall have been made known to the Trustee (as provided in section 1.11) or to such Holder, as the case may be, pursuant to the terms of this Indenture, then and in such event such payment shall be paid over and delivered forthwith to the Company by or on behalf of the person holding such payment for the benefit of the holders of Senior Indebtedness.

The provisions of this Section 1.03 shall not apply to any payment with respect to which Section 1.02 would be applicable.

SECTION 1.04.     Default in Senior Indebtedness.

In the event and during the continuation of any default by the Company in the payment of principal, premium, if any, interest or any other payment due on any Senior Indebtedness of the Company, as the case may be, beyond any applicable grace period with respect thereto, or in the event that the maturity of any Senior Indebtedness of the Company has been accelerated because of any default, then, in any such case, no payment shall be made by the Company with respect to the principal (including redemption payments, if any) of, premium or make-whole amount, if any, or interest or other amounts on the Securities until such default is cured or waived or ceases to exist or any such acceleration or demand for payment has been rescinded.

In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or the Holder of any Securities of any series prohibited by the foregoing provisions of this Section 1.04, and if such facts then shall have been known or thereafter shall have been made known to the Trustee (as provided in Section 1.11) or to such Holder, as the case may be, pursuant to the terms of this Indenture, then and in such event such payment shall be paid over and delivered forthwith to the Company by or on behalf of the person holding such payment for the benefit of the holders of senior Indebtedness.

The provisions of this Section 1.04 shall not apply to any payment with respect to which Section 1.02 would be applicable.

SECTION 1.05.     Limitations on Acceleration and Enforcement.

At any time when the Company may not make payments in respect of the Securities as a result of the application of Section 1.04, no Holder of Securities will:

      (a)     accelerate or cause to permit the acceleration of the maturity of any of the Securities; or

      (b)     commence, cause the commencement of, participate in or support any action or proceeding (whether at law or in equity) against the Company to recover all or any part of the indebtedness represented by the Securities or any action to commence or prosecute any bankruptcy or similar proceeding in respect of the Company unless the holders of at least a majority in principal amount of the Senior Notes at the time outstanding (exclusive of Senior Notes then owned by the Company or any of its subsidiaries or affiliates) shall have agreed in writing in advance to, and shall have joined in, such proceedings.

SECTION 1.06.     Payment Permitted if No Default.

Nothing contained in this Article One or elsewhere in this Indenture or in any of the Securities shall prevent (a) the Company, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshalling of assets and liabilities of the Company referred to in Section 1.02 or under the conditions described in Sections 1.03 or 1.04, from making payments at any time of the principal amount, interest or such other amounts, if any, as may be provided for in this Indenture, as the case may be, in respect of the Securities, or (b) the application by the Trustee or the retention by any Holder of any money deposited with it hereunder to the payment of or on account of the principal amount, interest or such other amounts, if any, as may be provided for in this Indenture, as the case may be, in respect of the Securities if the Trustee did not have, at the time provided in the proviso to the first paragraph of Section 1.11, notice that such payment would have been prohibited by the provisions of this Article One.

SECTION 1.07.     Subrogation Rights of Holders of Senior Indebtedness.

Subject to the payment in full of all Senior Indebtedness, the Holders of the Securities of any series shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Indebtedness pursuant to the provisions of this Article One to the rights of the holders of such Senior Indebtedness to receive payments or distributions of cash, property or securities applicable to the Senior Indebtedness until the principal amount, interest or such other amounts, if any, as provided for in this Indenture, as the case may be, in respect of the Securities of such series shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the Holders of the Securities of such series or the Trustee would be entitled except for the provisions of this Article One, and no payments pursuant to the provisions of this Article One to the Company or to the holders of Senior Indebtedness by Holders of the Securities of such series or the Trustee, shall, as between the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities of such series, be deemed to be a payment or distribution by the Company to or on account of the Senior Indebtedness.

SECTION 1.08.     Provision Solely to Define Relative Rights.

The provisions of this Article One are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities of any series, on one hand, and the holders of Senior Indebtedness, on the other hand. Nothing contained in this Article One or elsewhere in this Indenture or in the Securities of any series is intended to or shall:

      (a)     impair, as between the Company and the Holders of the Securities of such series, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities of such series the principal amount, interest or such other amounts, if any, as may be provided for in this Indenture, as the case may be, in respect of the Securities of such series as and when the same shall become due and payable in accordance with the terms of the Securities of such series and this Indenture and which, subject to the rights under this Article One of the holders of Senior Indebtedness, is intended to rank equally with all other general obligations of the Company; or

      (b)     affect the relative rights against the Company of the Holders of the Securities of such series and creditors of the Company other than holders of Senior Indebtedness; or

      (c)     prevent the Trustee or the Holder of any Security of such series from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article One of the holders of Senior Indebtedness to receive cash, property or securities otherwise payable or deliverable to the Trustee or such Holder.

SECTION 1.09.     Trustee to Effectuate Subordination.

Each Holder of a Security by such Holder's acceptance thereof authorizes and directs the Trustee on such Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article One and appoints the Trustee such Holder's attorney-in-fact for any and all such purposes.

SECTION 1.10.     No Waiver of Subordination Provision.

No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with.

Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of, or notice to, the Trustee or the Holders of the Securities of any series, without incurring responsibility to the Holders of the Securities of such series and without impairing or releasing the subordination provided in this Article One or the obligations hereunder of the Holders of the Securities of such series to the holders of Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, or increase the amount of, Senior Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise dispose of or deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any person liable in any manner for the payment or collection of Senior Indebtedness; (iv) exercise or refrain from exercising any rights against the Company or any other person; and (v) apply any sums paid in respect of Senior Indebtedness to Senior Indebtedness, regardless of who made such payment or how such payment was realized.

SECTION 1.11.     Notice to Trustee.

The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Securities of any series. Failure to give such notice shall not affect the subordination of the Securities of such series to Senior Indebtedness. Notwithstanding the provisions of this Article One or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities of such series, unless and until the Trustee shall have received written notice thereof in the manner prescribed by this Indenture from the Company or a holder of Senior Indebtedness or from any trustee or agent therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section [regarding the duties and responsibilities of the Trustee], shall be entitled in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received, at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal amount, interest, or such other amounts as may be provided for in this Indenture in respect of any Security), the notice with respect to such money provided for in this Section 1.11, then, anything herein contained to the contrary notwithstanding, the Trustee shall have the full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by within three Business Days prior to such date.

Subject to the provisions of Section [regarding the duties and responsibilities of the Trustee], the Trustee shall be entitled to rely on the delivery to it of a written notice by a person representing himself to be a holder of Senior Indebtedness (or a trustee or agent on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee or agent on behalf of any such holder). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article One, the Trustee may request such person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such person, the extent to which such person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such person under this Article One, and if such evidence if not furnished, the Trustee may defer any payment which it may be required to make for the benefit of such person pursuant to the terms of this Indenture pending judicial determination as to the right of such person to receive such payment.

SECTION 1.12.     Reliance on Judicial Order or Certificate of Liquidating Agent.

Upon any payment or distribution of assets of the Company referred to in this Article One, the Trustee, subject to the provisions of Section [regarding the duties and responsibilities of the Trustee], and the Holders of the Securities of any series shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or to the Holders of Securities of such series, for the purpose of ascertaining the persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article One.

SECTION 1.13.     Trustee Not Fiduciary for Holders of Senior Indebtedness.

The Trustee shall be deemed not to owe any fiduciary duty to the holders of Senior Indebtedness. The Trustee shall not be charged with knowledge of the existence of Senior Indebtedness (other than the Senior Notes) or of any facts that would prohibit any payment hereunder unless the Trustee shall have received notice thereof in the manner prescribed by this Indenture. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants or obligation as are specifically set forth in this Article One and no implied covenants or obligations with respect to holders of Senior Indebtedness shall be read into this Indenture against the Trustee.

SECTION 1.14.     Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights.

The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article One with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder.

Nothing in this Article One shall apply to claims of, or payments to, the Trustee under or pursuant to Section [concerning fees and expenses of the Trustee].

SECTION 1.15     Article One Applicable to Paying Agents.

The term "Trustee" as used in this Article One shall (unless the context otherwise requires) be construed as extending to and including the Paying Agent within its meaning as fully for all intents and purposes as if the Paying Agent were named in this Article One in addition to or in place of the Trustee; provided, however, that Sections 1.11 and 1.13 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying A.

EXHIBIT 1G

[FORM OF SERIES G NOTE]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY ONLY BE REOFFERED AND SOLD IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION THEREFROM.

SEITEL, INC.

7.04% Series G Senior Note Due October 15, 2006

No. RG-[__]     [Date]

$[________]      PPN: 816074 C* 7

SEITEL, INC. (the "Company"), a Delaware corporation, for value received, hereby promises to pay to [_____________________] or registered assigns the principal sum of [_________________] DOLLARS ($[________]) on October 15, 2006 and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance thereof from the date of this Note at the rate of seven and four hundredths percent (7.04%) per annum, semiannually on the fifteenth day of October and April in each year, commencing on the later of April 15, 2002, or the payment date next succeeding the date hereof, until the principal amount hereof shall become due and payable; and to pay on demand interest on any overdue principal (including any overdue prepayment of principal) and Make-Whole Amount, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate equal to the lesser of (a) the highest rate allowed by applicable law or (b) the greater of (i) nine and four hundredths percent (9.04%) per annum and (ii) two percent (2%) over the rate of interest publicly announced by Morgan Guaranty Trust Company of New York in New York, New York as its "base" or "prime" rate.

Payments of principal, Make-Whole Amount, if any, and interest shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts to the registered holder hereof at the address shown in the register maintained by the Company for such purpose, in the manner provided in the Note Purchase Agreement (defined below).

This Note is one of an issue of Series G Notes of the Company issued in an aggregate principal amount limited to Twenty Million Dollars ($20,000,000) pursuant to the separate Note Purchase Agreements (collectively, the "Note Purchase Agreement"), each dated as of October 15, 2001, between the Company and each of the purchasers listed on Schedule A thereto, and is entitled to the benefits thereof. Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Note Purchase Agreement. As provided in the Note Purchase Agreement, this Note may be prepaid, in whole or in part, together with a Make-Whole Amount.

The Notes and all other obligations of the Company under the Note Purchase Agreement have been unconditionally guarantied by the Restricted Subsidiaries pursuant to the Guaranty, dated as of October 15, 2001, entered into by such Restricted Subsidiaries.

This Note is a registered Note and is transferable, subject to the restrictions set forth in the Note Purchase Agreement and in the legend above, only by surrender thereof as specified in Section 13.2 of the Note Purchase Agreement. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof, and the Company shall not be affected by any notice or knowledge to the contrary.

Under certain circumstances, as specified in the Note Purchase Agreement, the principal of this Note (together with any applicable Make-Whole Amount) may be declared due and payable in the manner and with the effect provided in the Note Purchase Agreement. 

It is the intention of the parties hereto to comply with all applicable usury laws; accordingly, it is agreed that notwithstanding any provision to the contrary herein or in the Note Purchase Agreement, or in any of the documents securing payment hereof or otherwise relating hereto, no such provision shall require the payment or permit the collection of interest in excess of the highest rate allowed by applicable law (the "Maximum Rate"). If any excess of interest in such respect is provided for, or shall be adjudicated to be so provided for, herein or in the Note Purchase Agreement or in any of the documents securing payment hereof or otherwise relating hereto, then in such event (a) the provisions of this paragraph shall govern and control, (b) neither the Company, endorsers or Restricted Subsidiaries, nor their heirs, legal representatives, successors or assigns nor any other party liable for the payment hereof, shall be obligated to pay the amount of such interest to the extent that it is in excess of the Maximum Rate, (c) any such excess which may have been collected shall, at the election of the holder of this Note, be either applied as a credit against the then unpaid principal amount hereof or refunded to the Company, and (d) the provisions hereof and of the Note Purchase Agreement and any documents securing payment hereof shall be automatically reformed so that the effective rate of interest shall be reduced to the Maximum Rate. For the purpose of determining the Maximum Rate, all interest payments with respect hereto shall be amortized, prorated and spread throughout the full term hereof so that the effective rate of interest hereunder is uniform throughout the term hereof.

THIS NOTE AND THE NOTE PURCHASE AGREEMENT ARE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.

  	
 

	
SEITEL, INC.

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
By:
	
 

	
 
	
 

	
Name:
	
 

	
 
	
 

	
Title:
	
 

EXHIBIT 1H

[FORM OF SERIES H NOTE]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY ONLY BE REOFFERED AND SOLD IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION THEREFROM.

SEITEL, INC.

7.19% Series H Senior Note Due October 15, 2008

No. RH-[__]     [Date]

$[________]      PPN: 816074 C@ 5

SEITEL, INC. (the "Company"), a Delaware corporation, for value received, hereby promises to pay to [_____________________] or registered assigns the principal sum of [_________________] DOLLARS ($[________]) on October 15, 2008 and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance thereof from the date of this Note at the rate of seven and nineteen hundredths percent (7.19%) per annum, semiannually on the fifteenth day of October and April in each year, commencing on the later of April 15, 2002 or the payment date next succeeding the date hereof, until the principal amount hereof shall become due and payable; and to pay on demand interest on any overdue principal (including any overdue prepayment of principal) and Make-Whole Amount, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate equal to the lesser of (a) the highest rate allowed by applicable law or (b) the greater of (i) nine and nineteen hundredths percent (9.19%) per annum and (ii) two percent (2%) over the rate of interest publicly announced by Morgan Guaranty Trust Company of New York in New York, New York as its "base" or "prime" rate.

Payments of principal, Make-Whole Amount, if any, and interest shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts to the registered holder hereof at the address shown in the register maintained by the Company for such purpose, in the manner provided in the Note Purchase Agreement (defined below).

This Note is one of an issue of Series H Notes of the Company issued in an aggregate principal amount limited to Fifty Million Dollars ($50,000,000) pursuant to separate Note Purchase Agreements (collectively, the "Note Purchase Agreement"), each dated as of October 15, 2001, between the Company and each of the purchasers listed on Schedule A thereto, and is entitled to the benefits thereof. Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Note Purchase Agreement. As provided in the Note Purchase Agreement, this Note is subject to prepayment, in whole or in part, in certain cases without a Make-Whole Amount and in other cases with a Make-Whole Amount. The Company agrees to make required prepayments on account of such Notes in accordance with the provisions of the Note Purchase Agreement.

The Notes and all other obligations of the Company under the Note Purchase Agreement have been unconditionally guarantied by the Restricted Subsidiaries pursuant to the Guaranty, dated as of October 15, 2001, entered into by such Restricted Subsidiaries.

This Note is a registered Note and is transferable, subject to the restrictions set forth in the Note Purchase Agreement and in the legend above, only by surrender thereof as specified in Section 13.2 of the Note Purchase Agreement. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof, and the Company shall not be affected by any notice or knowledge to the contrary.

Under certain circumstances, as specified in the Note Purchase Agreement, the principal of this Note (together with any applicable Make-Whole Amount) may be declared due and payable in the manner and with the effect provided in the Note Purchase Agreement. 

It is the intention of the parties hereto to comply with all applicable usury laws; accordingly, it is agreed that notwithstanding any provision to the contrary herein or in the Note Purchase Agreement, or in any of the documents securing payment hereof or otherwise relating hereto, no such provision shall require the payment or permit the collection of interest in excess of the highest rate allowed by applicable law (the "Maximum Rate"). If any excess of interest in such respect is provided for, or shall be adjudicated to be so provided for, herein or in the Note Purchase Agreement or in any of the documents securing payment hereof or otherwise relating hereto, then in such event (a) the provisions of this paragraph shall govern and control, (b) neither the Company, endorsers or Restricted Subsidiaries, nor their heirs, legal representatives, successors or assigns nor any other party liable for the payment hereof, shall be obligated to pay the amount of such interest to the extent that it is in excess of the Maximum Rate, (c) any such excess which may have been collected shall, at the election of the holder of this Note, be either applied as a credit against the then unpaid principal amount hereof or refunded to the Company, and (d) the provisions hereof and of the Note Purchase Agreement and any documents securing payment hereof shall be automatically reformed so that the effective rate of interest shall be reduced to the Maximum Rate. For the purpose of determining the Maximum Rate, all interest payments with respect hereto shall be amortized, prorated and spread throughout the full term hereof so that the effective rate of interest hereunder is uniform throughout the term hereof.

THIS NOTE AND THE NOTE PURCHASE AGREEMENT ARE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.

  	
 

	
SEITEL, INC.

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
By:
	
 

	
 
	
 

	
Name:
	
 

	
 
	
 

	
Title:
	
 

EXHIBIT 1I

[FORM OF SERIES I NOTE]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY ONLY BE REOFFERED AND SOLD IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN EXEMPTION THEREFROM.

SEITEL, INC.

7.34% Series I Senior Note Due October 15, 2011

No. RI-[__]     [Date]

$[________]      PPN: 816074 C# 3

SEITEL, INC. (the "Company"), a Delaware corporation, for value received, hereby promises to pay to [_____________________] or registered assigns the principal sum of [_________________] DOLLARS ($[________]) on October 15, 2011 and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance thereof from the date of this Note at the rate of seven and thirty-four hundredths percent (7.34%) per annum, semiannually on the fifteenth day of October and April in each year, commencing on the later of April 15, 2002, or the payment date next succeeding the date hereof, until the principal amount hereof shall become due and payable; and to pay on demand interest on any overdue principal (including any overdue prepayment of principal) and Make-Whole Amount, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate equal to the lesser of (a) the highest rate allowed by applicable law or (b) the greater of (i) nine and thirty-four hundredths percent (9.34%) per annum and (ii) two percent (2%) over the rate of interest publicly announced by Morgan Guaranty Trust Company of New York in New York, New York as its "base" or "prime" rate.

Payments of principal, Make-Whole Amount, if any, and interest shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts to the registered holder hereof at the address shown in the register maintained by the Company for such purpose, in the manner provided in the Note Purchase Agreement (defined below).

This Note is one of an issue of Series I Notes of the Company issued in an aggregate principal amount limited to Thirty-Seven Million Dollars ($37,000,000) pursuant to the separate Note Purchase Agreements (collectively, the "Note Purchase Agreement"), each dated as of October 15, 2001, between the Company and each of the purchasers listed on Schedule A thereto, and is entitled to the benefits thereof. Capitalized terms used herein and not otherwise defined herein have the meanings specified in the Note Purchase Agreement. As provided in the Note Purchase Agreement, this Note may be prepaid, in whole or in part, together with a Make-Whole Amount.

The Notes and all other obligations of the Company under the Note Purchase Agreement have been unconditionally guarantied by the Restricted Subsidiaries pursuant to the Guaranty, dated as of October 15, 2001, entered into by such Restricted Subsidiaries.

This Note is a registered Note and is transferable, subject to the restrictions set forth in the Note Purchase Agreement and in the legend above, only by surrender thereof as specified in Section 13.2 of the Note Purchase Agreement. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof, and the Company shall not be affected by any notice or knowledge to the contrary.

Under certain circumstances, as specified in the Note Purchase Agreement, the principal of this Note (together with any applicable Make-Whole Amount) may be declared due and payable in the manner and with the effect provided in the Note Purchase Agreement.

It is the intention of the parties hereto to comply with all applicable usury laws; accordingly, it is agreed that notwithstanding any provision to the contrary herein or in the Note Purchase Agreement, or in any of the documents securing payment hereof or otherwise relating hereto, no such provision shall require the payment or permit the collection of interest in excess of the highest rate allowed by applicable law (the "Maximum Rate"). If any excess of interest in such respect is provided for, or shall be adjudicated to be so provided for, herein or in the Note Purchase Agreement or in any of the documents securing payment hereof or otherwise relating hereto, then in such event (a) the provisions of this paragraph shall govern and control, (b) neither the Company, endorsers or Restricted Subsidiaries, nor their heirs, legal representatives, successors or assigns nor any other party liable for the payment hereof, shall be obligated to pay the amount of such interest to the extent that it is in excess of the Maximum Rate, (c) any such excess which may have been collected shall, at the election of the holder of this Note, be either applied as a credit against the then unpaid principal amount hereof or refunded to the Company, and (d) the provisions hereof and of the Note Purchase Agreement and any documents securing payment hereof shall be automatically reformed so that the effective rate of interest shall be reduced to the Maximum Rate. For the purpose of determining the Maximum Rate, all interest payments with respect hereto shall be amortized, prorated and spread throughout the full term hereof so that the effective rate of interest hereunder is uniform throughout the term hereof.

THIS NOTE AND THE NOTE PURCHASE AGREEMENT ARE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.

  	
 

	
SEITEL, INC.

	
 
	
 

	
 
	
 

	
 
	
 

	
 
	
 

	
By:
	
 

	
 
	
 

	
Name:
	
 

	
 
	
 

	
Title:
	
 

EXHIBIT 4.4(a)

[FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY]

EXHIBIT 4.4(b)

[FORM OF OPINION OF SPECIAL COUNSEL FOR THE PURCHASERS]

EXHIBIT 4.10

[FORM OF SUBSIDIARY GUARANTY]

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