Document:

Exhibit 10.2

 

AMENDMENT TO EMPLOYMENT AGREEMENT

 

Amendment (“Amendment”),
dated April 27, 2005, to the Employment Agreement, dated as of January 18,
2002 (as amended, the “Agreement”), between, Arch Capital Group Ltd., a
Bermuda company (the “Company”), and John D. Vollaro (the “Executive”).  Capitalized terms used without definition
herein have the meanings given to them in the Agreement.

 

NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein, the
parties have agreed to amend the Agreement as follows:

 

1.               SECTION 4.04 shall be hereby amended and restated
as follows:

 

“SECTION 4.04.  Expenses.  The Company shall reimburse the
Executive for all reasonable expenses incurred by him in the course of
performing his duties under this Agreement which are consistent with the
Company’s policies in effect from time to time with respect to travel,
entertainment and other business expenses (“Reimbursable
Expenses”), subject to the
Company’s requirements with respect to reporting and documentation
of expenses.  In addition, the Company
will reimburse the Executive, on an after-tax basis, for his reasonable
expenses incurred in traveling between Bermuda and the United States.”

 

2.               All other
provisions of the Agreement shall remain in full force and effect.  This amendment shall be governed by and
construed in accordance with the laws of Bermuda, without giving effect to
principles of conflict of laws, and may be executed in two counterparts, each
of which shall constitute one and the same instrument.

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date
and year first above written.

 

	
   

  	
  ARCH
  CAPITAL GROUP LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Constantine Iordanou

  	
   

  
	
   

  	
  Printed
  Name:

  	
  Constantine Iordanou

  	
   

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  John D. Vollaro

  	
   

  
	
   

  	
  John
  D. Vollaro

  
						

 

2Exhibit 10.1

 

CREDIT AGREEMENT

 

Dated as of March 15, 2005

 

by and among

 

VEECO INSTRUMENTS INC.

 

and

 

HSBC BANK USA, NATIONAL ASSOCIATION

as Administrative Agent,

 

and

 

THE LENDERS PARTY HERETO

 

 

Lead
Arranger:

 

HSBC BANK USA, NATIONAL ASSOCIATION

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I
  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
   

  
	
  SECTION 1.02.

  	
  Terms Generally

  	
   

  
	
  SECTION 1.03.

  	
  Currency Equivalents Generally

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II LOANS

  	
   

  
	
  SECTION 2.01.

  	
  Revolving Credit Loans

  	
   

  
	
  SECTION 2.02.

  	
  Revolving Credit Note

  	
   

  
	
  SECTION 2.03.

  	
  Letters of Credit.

  	
   

  
	
  SECTION 2.04.

  	
  Swingline Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III PROVISIONS RELATING TO ALL
  EXTENSIONS OF CREDIT; FEES AND PAYMENTS

  	
   

  
	
  SECTION 3.01.

  	
  Interest Rate; Continuation and Conversion of Loans

  	
   

  
	
  SECTION 3.02.

  	
  Use of Proceeds.

  	
   

  
	
  SECTION 3.03.

  	
  Prepayments

  	
   

  
	
  SECTION 3.04.

  	
  Fees.

  	
   

  
	
  SECTION 3.05.

  	
  Inability to Determine Interest Rate.

  	
   

  
	
  SECTION 3.06.

  	
  Illegality.

  	
   

  
	
  SECTION 3.07.

  	
  Increased Costs

  	
   

  
	
  SECTION 3.08.

  	
  Indemnity.

  	
   

  
	
  SECTION 3.09.

  	
  Mitigation, Obligations; Replacement of Lenders.

  	
   

  
	
  SECTION 3.10.

  	
  Taxes

  	
   

  
	
  SECTION 3.11.

  	
  Pro Rata Treatment and Payments

  	
   

  
	
  SECTION 3.12.

  	
  Funding and Disbursement of Loans

  	
   

  
	
  SECTION 3.13.

  	
  Judgment Currency.

  	
   

  
	
  SECTION 3.14.

  	
  Foreign Exchange Indemnity.

  	
   

  
	
  SECTION 3.15.

  	
  Further Modifications.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND
  WARRANTIES

  	
   

  

 

i

 

	
  SECTION 4.01.

  	
  Organization, Powers.

  	
   

  
	
  SECTION 4.02.

  	
  Authorization of Borrowing, Enforceable Obligations

  	
   

  
	
  SECTION 4.03.

  	
  Financial Condition.

  	
   

  
	
  SECTION 4.04.

  	
  Taxes.

  	
   

  
	
  SECTION 4.05.

  	
  Title to Properties

  	
   

  
	
  SECTION 4.06.

  	
  Litigation

  	
   

  
	
  SECTION 4.07.

  	
  Agreements.

  	
   

  
	
  SECTION 4.08.

  	
  Compliance with ERISA.

  	
   

  
	
  SECTION 4.09.

  	
  Federal Reserve Regulations; Use of Proceeds.

  	
   

  
	
  SECTION 4.10.

  	
  Approval

  	
   

  
	
  SECTION 4.11.

  	
  Subsidiaries and Affiliates.

  	
   

  
	
  SECTION 4.12.

  	
  Hazardous Materials

  	
   

  
	
  SECTION 4.13.

  	
  Investment Company Act

  	
   

  
	
  SECTION 4.14.

  	
  No Default

  	
   

  
	
  SECTION 4.15.

  	
  Credit Arrangements.

  	
   

  
	
  SECTION 4.16.

  	
  Permits and Licenses.

  	
   

  
	
  SECTION 4.17.

  	
  Compliance with Law.

  	
   

  
	
  SECTION 4.18.

  	
  Disclosure.

  	
   

  
	
  SECTION 4.19.

  	
  Labor Disputes and Acts of God.

  	
   

  
	
  SECTION 4.20.

  	
  Pledge Agreements.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V CONDITIONS OF LENDING

  	
   

  
	
  SECTION 5.01.

  	
  Conditions to Initial Extension of Credit

  	
   

  
	
  SECTION 5.02.

  	
  Conditions to Extensions of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI AFFIRMATIVE COVENANTS

  	
   

  
	
  SECTION 6.01.

  	
  Existence, Properties, Insurance

  	
   

  
	
  SECTION 6.02.

  	
  Payment of Indebtedness and Taxes.

  	
   

  
	
  SECTION 6.03.

  	
  Financial Statements, Reports, etc.

  	
   

  
	
  SECTION 6.04.

  	
  Books and Records; Access to Premises

  	
   

  
	
  SECTION 6.05.

  	
  Notice of Adverse Change

  	
   

  
	
  SECTION 6.06.

  	
  Notice of Default

  	
   

  
	
  SECTION 6.07.

  	
  Notice of Litigation and Investigations

  	
   

  

 

ii

 

	
  SECTION 6.08.

  	
  Notice of Default in Other Agreements.

  	
   

  
	
  SECTION 6.09.

  	
  Notice of ERISA Event

  	
   

  
	
  SECTION 6.10.

  	
  Notice of Environmental Law Violations.

  	
   

  
	
  SECTION 6.11.

  	
  Compliance with Applicable Laws

  	
   

  
	
  SECTION 6.12.

  	
  Additional Subsidiaries.

  	
   

  
	
  SECTION 6.13.

  	
  Environmental Laws.

  	
   

  
	
  SECTION 6.14.

  	
  Non-Material Subsidiaries.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII NEGATIVE COVENANTS

  	
   

  
	
  SECTION 7.01.

  	
  Indebtedness

  	
   

  
	
  SECTION 7.02.

  	
  Liens

  	
   

  
	
  SECTION 7.03.

  	
  Guaranties

  	
   

  
	
  SECTION 7.04.

  	
  Sale of Assets.

  	
   

  
	
  SECTION 7.05.

  	
  Sales of Receivables.

  	
   

  
	
  SECTION 7.06.

  	
  Loans and Investments.

  	
   

  
	
  SECTION 7.07.

  	
  Nature of Business.

  	
   

  
	
  SECTION 7.08.

  	
  Sale and Leaseback.

  	
   

  
	
  SECTION 7.09.

  	
  Federal Reserve Regulations

  	
   

  
	
  SECTION 7.10.

  	
  Accounting Policies and Procedures

  	
   

  
	
  SECTION 7.11.

  	
  Hazardous Materials

  	
   

  
	
  SECTION 7.12.

  	
  Limitations on Fundamental Changes, Limitations on Consideration;
  Amendments of Organizational Documents.

  	
   

  
	
  SECTION 7.13.

  	
  Financial Condition Covenants.

  	
   

  
	
  SECTION 7.14.

  	
  Subordinated Debt.

  	
   

  
	
  SECTION 7.15.

  	
  Dividends

  	
   

  
	
  SECTION 7.16.

  	
  Transactions with Affiliates

  	
   

  
	
  SECTION 7.17.

  	
  Negative Pledge

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII EVENTS OF DEFAULT

  	
   

  
	
  SECTION 8.01.

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX THE ADMINISTRATIVE AGENT

  	
   

  
	
  SECTION 9.01.

  	
  Appointment, Powers and Immunities

  	
   

  

 

iii

 

	
  SECTION 9.02.

  	
  Reliance by Administrative Agent.

  	
   

  
	
  SECTION 9.03.

  	
  Events of Default

  	
   

  
	
  SECTION 9.04.

  	
  Rights as a Lender

  	
   

  
	
  SECTION 9.05.

  	
  Indemnification

  	
   

  
	
  SECTION 9.06.

  	
  Non-Reliance on Administrative Agent and Other Lenders

  	
   

  
	
  SECTION 9.07.

  	
  Failure to Act

  	
   

  
	
  SECTION 9.08.

  	
  Resignation of the Administrative Agent

  	
   

  
	
  SECTION 9.09.

  	
  Sharing of Collateral and Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X MISCELLANEOUS

  	
   

  
	
  SECTION 10.01.

  	
  Notices

  	
   

  
	
  SECTION 10.02.

  	
  Effectiveness; Survival; Integration

  	
   

  
	
  SECTION 10.03.

  	
  Expenses

  	
   

  
	
  SECTION 10.04.

  	
  Amendments and Waivers

  	
   

  
	
  SECTION 10.05.

  	
  Successors and Assigns; Participations

  	
   

  
	
  SECTION 10.06.

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  SECTION 10.07.

  	
  APPLICABLE LAW

  	
   

  
	
  SECTION 10.08.

  	
  SUBMISSION TO JURISDICTION

  	
   

  
	
  SECTION 10.09.

  	
  Severability

  	
   

  
	
  SECTION 10.10.

  	
  Right of Setoff

  	
   

  
	
  SECTION 10.11.

  	
  Confidentiality

  	
   

  
	
  SECTION 10.12.

  	
  Headings

  	
   

  
	
  SECTION 10.13.

  	
  Construction

  	
   

  
	
  SECTION 10.14.

  	
  Counterparts

  	
   

  
	
  SECTION 10.15.

  	
  Special Provisions with Respect to Subordinated Notes

  	
   

  
	
  SECTION 10.16.

  	
  US Patriot Act

  	
   

  

 

iv

 

	
  SCHEDULES

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1.01(a)

  	
   

  	
  -

  	
   

  	
  Guarantors

  
	
  Schedule 1.01(b)

  	
   

  	
  -

  	
   

  	
  Existing
  Mortgage Debt

  
	
  Schedule 4.06

  	
   

  	
  -

  	
   

  	
  Litigation

  
	
  Schedule 4.11

  	
   

  	
  -

  	
   

  	
  Subsidiaries
  and Affiliates

  
	
  Schedule 4.15

  	
   

  	
  -

  	
   

  	
  Credit
  Arrangements

  
	
  Schedule 5.01(j)

  	
   

  	
  -

  	
   

  	
  Adverse
  Changes

  
	
  Schedule 6.01

  	
   

  	
  -

  	
   

  	
  Exceptions
  to Existence

  
	
  Schedule 7.01

  	
   

  	
  -

  	
   

  	
  Permitted
  Indebtedness (existing after closing)

  
	
  Schedule 7.02

  	
   

  	
  -

  	
   

  	
  Existing
  Liens

  
	
  Schedule 7.03

  	
   

  	
  -

  	
   

  	
  Existing
  Guarantees

  
	
  Schedule 7.12

  	
   

  	
  -

  	
   

  	
  Permitted
  Acquisitions

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  -

  	
   

  	
  Form of
  Revolving Credit Note

  
	
  Exhibit B

  	
   

  	
  -

  	
   

  	
  Form of
  Swingline Note

  
	
  Exhibit C

  	
   

  	
  -

  	
   

  	
  Form of
  Guaranty

  
	
  Exhibit D

  	
   

  	
  -

  	
   

  	
  Form of
  Security Agreement

  
	
  Exhibit E-1

  	
   

  	
  -

  	
   

  	
  Form of
  Company Pledge Agreement

  
	
  Exhibit E-2

  	
   

  	
  -

  	
   

  	
  Form of
  Guarantor Pledge Agreement

  
	
  Exhibit F

  	
   

  	
  -

  	
   

  	
  Form of
  Assignment and Acceptance Agreement

  
	
  Exhibit G

  	
   

  	
  -

  	
   

  	
  Form of
  Opinion of Counsel

  
	
  Exhibit H

  	
   

  	
  -

  	
   

  	
  Form of
  U.S. Tax Compliance Certificate

  

 

v

 

CREDIT
AGREEMENT dated as of March 15, 2005, by and
among VEECO INSTRUMENTS INC., a
Delaware corporation (the “Company”), the LENDERS
which from time to time are parties to this Agreement (individually, a “Lender”
and, collectively, the “Lenders”) and HSBC BANK USA, NATIONAL
ASSOCIATION, a
national banking association organized under the laws of the United States of
America, as Administrative Agent (the “Administrative Agent”).

 

RECITALS

 

The
Company has requested the Lenders to extend credit from time to time and the
Lenders are willing to extend such credit to the Company, subject to the terms
and conditions hereinafter set forth.

 

Accordingly,
the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01.            Definitions.  As
used herein, the following terms shall have the following meanings:

 

“Additional
Lender” shall mean any financial institution which becomes a Lender hereunder
pursuant to Section 10.05(c) hereof.

 

“Administrative
Agent” or “Agent” shall mean HSBC Bank USA, National Association in its
capacity as Administrative Agent for the Lenders under this Agreement or its
successor Administrative Agent permitted pursuant to Section 9.08 hereof.

 

“Affiliate”
shall mean, with respect to a specified Person, another Person which, directly
or indirectly, controls or is controlled by or is under common control with
such specified Person.  For the purpose
of this definition, “control” of a Person shall mean the power, direct or
indirect,  to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise; provided that, in any
event, any Person who owns directly or indirectly 25% or more of the securities
having ordinary voting power for the election of directors or other governing
body of a corporation or 25% or more of the partnership or other ownership
interests of any Person (other than as a limited partner of such other Person)
will be deemed to control such corporation or other Person.

 

“Aggregate
Letters of Credit Outstandings” shall mean, on the  date of determination, the sum of (a) the
aggregate maximum stated amount at such time which is available or available in
the future to be drawn under all outstanding Letters of Credit and (b) the
aggregate amount of all payments on account of drawings under Letters of Credit
made by the Issuing Lender on behalf of the Lenders under any Letter of Credit
that has not been reimbursed by the Company.

 

“Aggregate
Outstandings” shall mean, on the date of determination, the sum of (a) the
Aggregate Letters of Credit Outstandings at such time, (b) the aggregate
outstanding principal amount of all Revolving Credit Loans at such time, and (c) the
aggregate outstanding principal amount of all Swingline Loans at such time.

 

“Agreement”
shall mean this Credit Agreement, dated as of March 15, 2005, as it may
hereafter

 

H-1

 

be
amended, restated, supplemented or otherwise modified from time to time.

 

“Applicable
Currency” shall mean, as to any particular payment or Loan, Dollars or the
other Approved Currency in which it is denominated or is payable.

 

“Applicable
Currency Equivalent” shall mean, with respect to an amount denominated in
Dollars which is to be converted to any other Applicable Currency, the amount
of such Applicable Currency required to purchase such amount of Dollars at the
Relevant Exchange Rate.

 

“Applicable
Offshore Time” shall mean, with respect to borrowings and payments in Approved
Currencies other than Dollars, the local times in the country of settlement for
such Approved Currencies as specified from time to time by the Administrative
Agent to the parties hereto.

 

“Applicable
Rate” shall mean (a) with respect to each Eurocurrency Loan, the
percentage set forth below under the heading “Eurocurrency Margin” opposite the
applicable ratio of Consolidated Senior Funded Debt to Consolidated EBITA (the “Applicable
Ratio”), (b) with respect to each Prime Rate Loan, the percentage set
forth below under the heading “Prime Rate Margin” opposite the Applicable Ratio
and (c) with respect to the Commitment Fee payable pursuant to Section 3.04(a) of
this Agreement, the percentage set forth below under the heading “Commitment
Fee Rate” opposite the Applicable Ratio:

 

	
  Consolidated
  Senior Funded

  Debt to Consolidated EBITA

  	
   

  	
  Eurocurrency Margin

  (360 day basis)

  	
   

  	
  Prime Rate Margin

  (360 day basis)

  	
   

  	
  Commitment

  Fee Rate

  	
   

  
	
  Less than 2.00:1:00

  	
   

  	
  1.50

  	
  %

  	
  -0-

  	
  %

  	
  0.30

  	
  %

  
	
  Greater than or equal to 2.00:1.00

  	
   

  	
  2.00

  	
  %

  	
  0.25

  	
  %

  	
  0.375

  	
  %

  

 

Notwithstanding
the foregoing, during the period commencing on the Closing Date and ending on March 30,
2006, (a) the Applicable Rate with respect to each Eurocurrency Loan shall
be 2.00% per annum, (b) the Applicable Rate with respect to each Prime
Rate Loan shall be 0.25% per annum and (c) the Applicable Rate with
respect to the Commitment Fee payable pursuant to Section 3.04(a) hereof
shall be .375% per annum. The Applicable Rate will be set or reset quarterly
with respect to each Loan and the Commitment Fee on the first Business Day of
the fiscal quarter of the Company that commences after the date on which the
financial statements referred to in Section 6.03(a) or Section 6.03(b) hereof
(i.e., the Applicable Rate to be set on April 1, 2006 shall be determined
based upon the financial statements of the Company for the fiscal year ended December 31,
2005), as the case may be, are required to be delivered to the Administrative
Agent, and shall (a) apply to all Eurocurrency Loans and Prime Rate Loans
outstanding on such date or to be made on or after such date and (b) be
used to calculate the Commitment Fee as described in Section 3.04(a) hereof
on or after such date, and, in the case of each of (a) and (b), until, but
not including, the next date on which the Applicable Rate is reset in
accordance with the provisions hereof; provided, however, that (A) if any
financial statements are not received by the Administrative Agent within the
time period relating to such financial statements as provided in Section 6.03(a) or
Section 6.03(b) hereof, as the case may be, the Applicable Rate used
to calculate the Commitment Fee as described in Section 3.04(a) hereof
and the Applicable Rate with respect to all Eurocurrency Loans and Prime Rate
Loans outstanding on such date or to be made on or after the date the Applicable
Rate should have been reset in accordance with the foregoing provisions (i.e.,
assuming timely delivery of the requisite financial statements), until the day
which is the first Business Day of the fiscal quarter of the Company which
commences following the receipt by the Administrative Agent of such

 

H-2

 

financial
statements, will be set based on an Applicable Ratio of equal to or greater
than 2.00:1.00 and (B) if Consolidated EBITA at the end of any fiscal
quarter, with respect to the four fiscal quarters then ending, is less than
$25,000,000, the Applicable Rate used to calculate the Commitment Fee as
described in Section 3.04(a) hereof, and with respect to all
Eurocurrency Loans and Prime Rate Loans outstanding on such date or to be made
on or after such date will be set based on an Applicable Ratio of equal to or
greater than 2.00:1.00 which Applicable Rate shall remain in effect until the
day which is the first Business Day of the fiscal quarter of the Company which
commences following the receipt by the Administrative Agent of financial
statements indicating that Consolidated EBITA, with respect to the four fiscal
quarter then ending, is greater than or equal to $25,000,000; and further
provided, however, that the Administrative Agent and the Lenders shall not in
any way be deemed to have waived any Event of Default or any of their remedies
hereunder (including, without limitation, remedies provided in Article VIII
hereof) in connection with the provisions of the foregoing proviso. During the
occurrence and continuance of an Event of Default, no downward adjustment, and
only upward adjustments, shall be made to the Applicable Rate.

 

“Approved
Currencies” shall mean Dollars, British pounds sterling, Japanese yen, and the
Euro, and, with the consent of each of the Lenders, any other currencies which
are freely transferable and convertible into Dollars and in which dealings in
deposits are carried out in the London interbank market.

 

“Assignment
and Acceptance Agreement” shall mean an Assignment and Acceptance Agreement
entered into by a Lender and an assignee and accepted by the Administrative
Agent and, so long as no Event of Default shall have occurred and be
continuing, the Company (such consent not to be unreasonably withheld or
delayed), in the form attached hereto as Exhibit F or any other form
approved by the Administrative Agent.

 

“Auditor”
shall have the meaning specified in Section 6.03(a) hereof.

 

“Borrowing
Date” shall mean, with respect to any Loan or Letter of Credit, the date
specified in any notice given pursuant to Section 2.01(b) and Section 2.03(a) hereof
on which such Loan or Letter of Credit is requested by the Company.

 

“Business
Day” shall mean any day not a Saturday, Sunday or other day on which commercial
banks in New York, New York are authorized or required by law to close, and

 

(a)                                  if the applicable Business Day relates to any
Eurocurrency Loan denominated in Dollars, means such a day on which dealings
are carried on in the applicable offshore Dollar interbank market;

 

(b)                                 if the applicable Business Day relates to an
Obligation denominated in the Euro, any such day which is (i) for payments
or purchases of the Euro, a TARGET Business Day, and (ii) for all other
purposes, including the giving and receiving of notices hereunder, a TARGET
Business Day on which banks are generally open for business in London,
Frankfurt and in any other principal financial center as the Administrative
Agent may from time to time determine for this purpose; and

 

(c)                                  if the applicable Business Day relates to an
Obligation denominated in any other Applicable Currency other than Dollars, a
day on which commercial banks are open for foreign exchange business in London,
England, and on which dealings in the relevant Applicable Currency are carried
on in the applicable offshore foreign exchange interbank market in which
disbursements of or payment in such Applicable Currency will be made or
received hereunder.

 

H-3

 

A
“TARGET Business Day” is a day when TARGET (Trans-European Automated Real-time
Gross settlement Express Transfer system), or any successor thereto, is
scheduled to be open for business.

 

“Capital
Lease” shall mean, with respect to any Person, as of the date of determination,
any lease the obligations of which are required to be capitalized on a balance
sheet of such Person in accordance with Generally Accepted Accounting
Principles applied on a consistent basis.

 

“Cash
Collateral” shall mean a deposit by the Company made in immediately available
funds to a cash collateral account at the Administrative Agent and the taking
of all action required to provide the Administrative Agent, for the ratable
benefit of the Lenders, a first priority perfected security interest in such
deposit.

 

“Change
of Control” shall mean any event or condition which results in any Person or “group”
(within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended), other than a Person or group that is
actively involved in the day to day management of the Company on the Closing
Date, (i) having acquired beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended), directly or indirectly, of securities of the Company (or
other securities convertible into such securities) representing 40% or more of
the combined voting power of all securities of the Company entitled to vote in
the election of directors of the Company; or (ii) obtaining the power
(whether or not exercised) to elect a majority of the Company’s directors.

 

“Chief
Financial Officer” shall mean the Chief Financial Officer of the Company or, in
the event no such officership exists, the principal financial officer or
principal accounting officer of the Company.

 

“Closing
Date” shall mean March 15, 2005.

 

“Code”
shall mean the Internal Revenue Code of 1986, and the regulations promulgated
thereunder, each as amended from time to time.

 

“Commercial
Letter of Credit” shall mean any sight letter of credit issued for the account
of a Person for the purpose of providing the primary payment mechanism in
connection with the purchase of materials, goods, or services by such Person.

 

“Commitment
Fee” shall have the meaning specified in Section 3.04(a) hereof.

 

“Commitment
Proportion” shall mean, with respect to each Lender at the time of
determination, the ratio, expressed as a percentage, which (a) such Lender’s
Revolving Credit Commitments bear to the Total Commitment or (b) if the
Revolving Credit Commitments have expired or have been terminated, the
principal balance of the Revolving Credit Loans held by such Lender at such
time bear to the principal balance of the Revolving Credit Loans outstanding at
such time.

 

“Commitments”
shall mean, collectively, the Revolving Credit Commitments and the Swingline
Commitments.

 

“Company”
shall have the meaning set forth in the preamble hereto.

 

H-4

 

“Consolidated
Capital Expenditures” shall mean, for any period, to the extent capitalized,
the sum of all expenditures by the Company and its Subsidiaries on a
consolidated basis, in respect of the purchase or acquisition of any fixed or
capital assets, including, without limitation, obligations under Capital
Leases, determined in accordance with Generally Accepted Accounting Principles
applied on a consistent basis.

 

“Consolidated
Current Liabilities” shall mean, on the date of determination, all liabilities
of the Company and its Subsidiaries, which would be classified as current
liabilities on a consolidated balance sheet of the Company and its
Subsidiaries, as determined in accordance with Generally Accepted Accounting
Principles applied on a consistent basis, provided that there shall be excluded
from the calculation of current liabilities, 80% of “Deferred Gross Profit
arising from SAB 101” as reflected on the most recent consolidated balance
sheet of the Company and its Subsidiaries delivered to the Lenders pursuant to
the terms of this Agreement.

 

“Consolidated
EBITA” shall mean, for the Company and its Subsidiaries for any period,
Consolidated EBITDA for such period minus depreciation expenses for such
period, determined in accordance with Generally Accepted Accounting Principles
applied on a consistent basis.  All of
the foregoing categories shall be calculated with respect to the Company and
its Subsidiaries on a consolidated basis and shall be calculated (without
duplication) over the four fiscal quarters ending on or most recently ended
prior to the date of calculation thereof. 
Notwithstanding anything to the contrary herein, for purposes of
determining compliance with the financial covenants set forth herein and in
determining whether an acquisition shall be a Permitted Acquisition only, but not for purposes of calculating the Applicable
Rate, Consolidated EBITA shall include the EBITA of any entity acquired in a
Permitted Acquisition, which shall be calculated on a pro  forma
basis with respect to periods prior to consummation of such Permitted
Acquisition.

 

“Consolidated
EBITDA” shall mean, for any Person for any period, the Consolidated Net Income
(Net Loss) of such Person and its Subsidiaries for such period before provision
for federal and state income taxes, minus the sum of (a) Consolidated
Interest Income and (b) all extraordinary gains, plus the sum,
without duplication, of (a) one-time non-cash charges related to (i) write-downs
of intangible assets (including the value of in-process research and
development related to a Permitted Acquisition and (ii) to the extent included in Consolidated Net
Income before provision for federal and state income taxes, write-downs
of, or reserves for, deferred tax assets, (b) Consolidated Interest
Expense, (c) depreciation and amortization expenses, (d) non-cash
non-recurring charges incurred in connection with accounting for stock-based
compensation expense and changes to Statements of Financial Accounting
Standards, (e) non-cash restructuring charges (but excluding any accrual
or reserve for future cash expenditures, such as severance charges) recorded in
the fiscal quarter ended December 31, 2004 and (f) non-recurring
legal, accounting and other professional fees and expenses in connection with
the TurboDisc Investigation recorded or to be recorded in the fiscal period
ended December 31, 2004 through fiscal quarter ending June 30, 2005,
all determined in accordance with Generally Accepted Accounting Principles
applied on a consistent basis.  All of
the foregoing categories shall be calculated with respect to such Person and
its Subsidiaries on a consolidated basis and shall be calculated (without
duplication) over the four fiscal quarters ending on or most recently ended
prior to the date of calculation thereof.

 

“Consolidated
EBITDAR” shall mean, for the Company and its Subsidiaries for any period,
Consolidated EBITDA plus rent expense, determined in accordance with
Generally Accepted Accounting Principles applied on a consistent basis.  All of the foregoing categories shall be
calculated with respect to the Company and its Subsidiaries on a consolidated
basis and shall be calculated (without duplication) over the four fiscal
quarters ending on or most recently ended prior to the date of calculation
thereof.

 

H-5

 

“Consolidated
EBT” shall mean, for the Company and its Subsidiaries for any period,
Consolidated EBITA for such period plus Consolidated Interest Income minus
Consolidated Interest Expense and amortization expenses for such period, determined
in accordance with Generally Accepted Accounting Principles applied on a
consistent basis.  All of the foregoing
categories shall be calculated with respect to the Company and its Subsidiaries
on a consolidated basis.

 

“Consolidated
Fixed Charge Coverage Ratio” shall mean, the ratio of (a) the sum of (i) Consolidated
EBITDAR minus (ii) Consolidated Net Unfunded Capital Expenditures
during the four fiscal quarters ending on or most recently ended prior to the
date of determination, minus (iii) income taxes paid to any
government or governmental instrumentality by the Company or any of its
Subsidiaries during the four fiscal quarters ending on or most recently ended
prior to the date of determination to (b) the sum of (i) Consolidated
Interest Expense plus (ii) rent expense for the four fiscal
quarters ending on or most recently ended prior to the date of determination, plus
(iii) the aggregate amount of all scheduled payments due during the next
succeeding four fiscal quarters on Indebtedness for borrowed money, including,
without limitation, Subordinated Debt minus (iv) at any time
following the second anniversary of the Closing Date, an amount equal to 75% of
the aggregate outstanding principal amount of all Revolving Credit Loans and
Swingline Loans at such time.

 

“Consolidated
Interest Expense” shall mean for any Person, on the date of determination, the
sum of all interest expense on Indebtedness of such Person and its
Subsidiaries, on a consolidated basis, during the four fiscal quarters ending on
or most recently ended prior to the date of calculation thereof, as determined
in accordance with Generally Accepted Accounting Principles applied on a
consistent basis, and shall not include, in any event, Consolidated Interest
Income.

 

“Consolidated
Interest Income” shall mean for any Person, on the date of determination, the
sum of all interest income of such Person and its Subsidiaries, on a
consolidated basis, during the four fiscal quarters ending on or most recently
ended prior to the date of calculation thereof, determined in accordance with
Generally Accepted Accounting Principles applied on a consistent basis.

 

“Consolidated
Net Income (Net Loss)” shall mean for any Person, for any period, the net
income (or net loss) of such Person and its Subsidiaries on a consolidated
basis for such period determined in accordance with Generally Accepted
Accounting Principles applied on a consistent basis.

 

“Consolidated
Net Unfunded Capital Expenditures” shall mean, for the Company and its
Subsidiaries, Consolidated Unfunded Capital Expenditures less the net
proceeds, not in excess of $5,000,000, from the sale of fixed or capital assets
realized by the Company and its Subsidiaries on a consolidated basis during the
preceding four fiscal quarters.

 

“Consolidated
Quick Assets” shall mean, on the date of determination, the sum of all cash,
Marketable Securities, and accounts receivable of the Company and its
Subsidiaries which have not been assigned, transferred, restricted, sold or
subject to any Lien, except Liens in favor of the Administrative Agent for the
benefit of the Lenders in accordance with this Agreement, all as calculated on
a consolidated basis in accordance with Generally Accepted Accounting
Principles applied on a consistent basis.

 

“Consolidated
Quick Ratio” shall mean, on the date of determination, the ratio of (a) Consolidated
Quick Assets to (b) the sum, without duplication, of Consolidated Current
Liabilities and 75% of the Aggregate Outstandings.  In addition, for purposes of calculating the
Consolidated Quick

 

H-6

 

Ratio,
if, as of the date of determination, Consolidated EBITA on a rolling
four-quarters basis is less than $20,000,000, then accounts receivable of the
Company and its Subsidiaries on a consolidated basis shall be excluded from
Consolidated Quick Assets to the extent such accounts receivable exceed 50% of
Consolidated Quick Assets.

 

“Consolidated
Senior Funded Debt” shall mean, on the date of determination, the sum of all
Indebtedness for borrowed money of the Company and its Subsidiaries (including,
without limitation, the current portion of Subordinated Indebtedness),
determined on a consolidated basis and including the current portion thereof
and the Aggregate Letters of Credit Outstanding, but excluding the long term
portion of the Existing Mortgage Debt and the long-term portion of Subordinated
Indebtedness, all as determined in accordance with Generally Accepted
Accounting Principles applied on a consistent basis.

 

“Consolidated
Total Assets” shall mean, at any time, the total assets of the Company and its
Subsidiaries, as would be set forth or reflected on a consolidated balance
sheet of the Company and its Subsidiaries, prepared in accordance with
Generally Accepted Accounting Principles applied on a consistent basis.

 

“Consolidated
Total Revenues” shall mean, at any time, the total revenues of the Company and
its Subsidiaries, as would be set forth or reflected on a consolidated balance
sheet of the Company and its Subsidiaries, prepared in accordance with
Generally Accepted Accounting Principles applied on a consistent basis.

 

“Consolidated
Unfunded Capital Expenditures” shall mean those Consolidated Capital
Expenditures of the Company and its Subsidiaries not funded by Indebtedness;
provided that, for purposes of this definition only, “Indebtedness” shall not
include Indebtedness arising under this Agreement.

 

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

 

“Determination
Date” shall have the meaning specified in Section 4.03 hereof.

 

“Dollar”
and the symbol “$” shall mean lawful currency of the United States of America.

 

“Dollar
Equivalent Amount” shall mean, (a) in relation to any amount denominated
in Dollars, the amount thereof at such time, and (b) in relation to any
amount denominated in any Applicable Currency other than Dollars, the amount in
Dollars which such amount would equal when converted at the Exchange Rate then
in effect.

 

“Domestic
Subsidiary” shall mean any Subsidiary of the Company organized under the laws
of any state of the United States of America.

 

“Eligible
Investments” shall mean (a) direct obligations of the United States of
America or any governmental agency thereof which are fully guaranteed or
insured by the United States of America; (b) Dollar denominated
certificates of time deposit issued by any bank organized and existing under
the laws of the United States or any state thereof and having aggregate capital
and surplus in excess of $500,000,000 or by any Lender; (c) money market
mutual funds having assets in excess of $2,000,000,000; (d) money market
mutual funds having assets in excess of $500,000,000 managed by a Lender or an
Affiliate of a Lender; (e) commercial paper rated not less than P-1 or A-1
or their equivalent

 

H-7

 

by
Moody’s Investors Service, Inc. or Standard & Poor’s Ratings
Group, respectively; (f) tax exempt securities of a U.S. issuer rated A or
better by Standard & Poor’s Ratings Group or rated A-2 or better by
Moody’s Investors Service, Inc.; (g) cash; (h) asset-backed
securities, mortgage-backed securities and auction-rate securities rated AAA
(or its equivalent) by Standard & Poor’s Ratings Group or Moody’s
Investors Service, Inc.; (i) bonds issued by corporations organized
under the laws of any state of the United States rated A (or its equivalent) or
better by  Standard & Poor’s
Ratings Group or Moody’s Investors Service, Inc.; and (j) short-term
investments by any Non-Domestic Subsidiary made in the ordinary course of its
business and in accordance with the Company’s guidelines and procedures
provided that the aggregate amount of such investments by the Non-Domestic
Subsidiaries shall not exceed the lesser of (1) $25,000,000 or (2) fifty
percent (50%) of the aggregate amount of Eligible Investments.

 

“EMU
Legislation” shall mean legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.

 

“Environmental
Law” shall mean any applicable law, ordinance, rule, regulation, or policy
having the force of law of any Governmental Authority relating to pollution or
protection of the environment or to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Materials,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et
seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Sections 1801, et  seq.), the Resource Conservation and Recovery
Act, as amended (42 U.S.C. Sections 6901, et  seq.) and the rules and
regulations promulgated pursuant thereto.

 

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

 

“ERISA
Affiliate” shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Company or any Affiliate of the Company would be
deemed to be a member of the same “controlled group” within the meaning of Section 414(b),
(c), (m) or (o) of the Code.

 

“Euro”
shall mean the single currency of Participating Member States.

 

“Eurocurrency
Base Rate” shall mean, for any Interest Period with respect to a Eurocurrency
Loan, the rate of interest determined by the Administrative Agent as the rate
for deposits in the Applicable Currency for a period equal to such Interest
Period which appears on Telerate Page 3740 or 3750 as of 11:00 a.m.
(London time) on the day which is two Business Days prior to the commencement
of such Interest Period.  (For purposes
hereof, “Telerate Page 3740 or 3750” means the display designated as “3740”
or “3750” by Bridge Information Systems, Inc. (formerly known as Dow Jones
Market Service) or any replacement page thereof.)  If the Administrative Agent is unable to
obtain any quotation as provided above, the Eurocurrency Base Rate shall be the
rate of interest per annum determined by the Administrative Agent to be the
rate at which deposits in the Applicable Currency in the approximate amount of
the amount of the Eurocurrency Loan to be made or continued as, or converted
into, a Eurocurrency Loan and having a maturity comparable to such Interest
Period would be offered by four major banks selected by the Administrative
Agent in the London interbank market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such Interest
Period.

 

The
principal London office of each of the four major banks will be requested to
provide a quotation of its Applicable Currency deposit offered rate.  If at least two such quotations are provided,
the

 

H-8

 

Eurocurrency
Base Rate for that date will be the arithmetic mean of the quotations.  If fewer than two quotations are provided as
requested, it will be deemed that the Eurocurrency Base Rate cannot be
determined.

 

“Eurocurrency
Loans” shall mean Loans at such time as they are made and/or being maintained
at a rate of interest based upon Reserve Adjusted Eurocurrency Rate.

 

“Eurocurrency
Reserve Requirement” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate (without duplication) of the rates (expressed as
a decimal) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves, under any
regulations of the Board of Governors of the Federal Reserve System or any
other governmental authority having jurisdiction with respect thereto) as from
time to time in effect, dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as “eurocurrency liabilities” in
Regulation D) maintained by any Lender.

 

“Eurocurrency
Sublimit” shall mean $25,000,000.

 

“Event
of Default” shall have the meaning set forth in Article VIII hereof.

 

“Exchange
Rate” shall mean, with respect to any currency (the “first currency”) on any
date, the rate at which such currency may be exchanged into another currency
(the “second currency”), as set forth on such date on the relevant Reuters
currency page at or about 11:00 a.m. London time on such date. In the
event that such rate does not appear on any Reuters currency page, the “Exchange
Rate” shall be determined by reference to such other publicly available service
for displaying exchange rates as may be agreed upon by the Administrative Agent
and the Company or, in the absence of such agreement, such “Exchange Rate”
shall instead be the Administrative Agent’s spot rate of exchange in the
interbank market where its foreign currency exchange operations in respect of
such first currency are then being conducted, at or about 10:00 a.m.,
local time, at such date for the purchase of the second currency with such
first currency, for delivery two Business Days later provided, that if
at the time of any such determination, no such spot rate can reasonably be
quoted, the Administrative Agent may use any reasonable method as it deems
applicable to determine such rate, and such determination shall be conclusive
absent manifest error (without prejudice to the determination of the
reasonableness of such method).

 

“Existing
Indebtedness” shall mean all Indebtedness and other obligations of the Company
arising pursuant to that certain Credit Agreement dated as of April 19,
2001, among the Company, the lenders party thereto, Fleet National Bank, as
Administrative Agent, JPMorgan Chase Bank, N.A. (formerly known as The Chase
Manhattan Bank), as Syndication Agent and HSBC Bank USA, National Association,
as Documentation Agent, as such agreement has been amended, modified and
supplemented from time to time.

 

“Existing
Mortgage Debt” shall mean Indebtedness secured by real property, as described
on Schedule 1.01(b) hereto.

 

“Federal
Funds Rate” shall mean, for any day, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal fund brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations
for the

 

H-9

 

day
of such transactions received by the Administrative Agent from three Federal
fund brokers of recognized standing selected by the Administrative Agent.

 

“First-Tier
Subsidiary” shall mean, with respect to any Person, a Subsidiary of such Person
that is directly owned by such Person.

 

“Foreign
Pledge Agreements” shall mean such pledge agreements or other documents, as may
be required in order to grant to the Administrative Agent (for the benefit of
the Lenders) a security interest in 65% of the issued and outstanding shares of
stock or other ownership interest of any Non-Domestic Subsidiary.

 

“Generally
Accepted Accounting Principles” shall mean those generally accepted accounting
principles in the United States of America, as in effect from time to time.

 

“Governmental
Authority” shall mean any nation or government, any state, province, city or
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.

 

“Guarantors”
shall mean, collectively, those Material Domestic Subsidiaries set forth on Schedule 1.01(a) hereto
and each other Material Domestic Subsidiary which, from time to time hereafter,
is required to execute a Guaranty in accordance with Section 6.12 hereof;
provided such Subsidiary’s status as a Guarantor shall be effective as of the
date of such execution.

 

“Guaranty”
shall mean the Guaranty in the form attached hereto as Exhibit C to be
executed and delivered by each Guarantor on the Closing Date and thereafter by
any Material Domestic Subsidiary required to deliver a Guaranty pursuant to Section 6.12
hereof, as any such Guaranty may hereafter be amended, restated, supplemented
or otherwise modified from time to time.

 

“Hazardous
Materials” shall mean any explosives, radioactive materials, or other
materials, wastes, substances, or chemicals regulated as toxic or hazardous or
as a pollutant, contaminant or waste under any applicable Environmental Law.

 

“Hedging
Agreement” shall mean any interest rate swap, collar, cap, floor, option or
forward rate agreement or other agreement regarding the hedging of interest
rate risk exposure executed in connection with hedging the interest rate
exposure of the Company and any confirming letter executed pursuant to such
agreement, all as amended, supplemented, restated or otherwise modified from
time to time.

 

“Indebtedness”
shall mean, without duplication, as to any Person, (a) indebtedness for
borrowed money; (b) indebtedness for the deferred purchase price of
property or services; (c) indebtedness evidenced by bonds, debentures,
notes or other similar instruments; (d) obligations and liabilities
secured by a Lien upon property owned by such Person, whether or not owing by
such Person and even though such Person has not assumed or become liable for
the payment thereof; (e) obligations or liabilities created or arising
under any conditional sales contract or other title retention agreement with
respect to property used and/or acquired by such Person; (f) the
capitalized portion of obligations of such Person as lessee under Capital
Leases; (g) net liabilities of such Person under Hedging Agreements and
foreign currency exchange agreements, as calculated in accordance with accepted
practice; (h) all obligations, contingent or otherwise of such Person as
an account party or applicant in respect of letters of credit created for the
account or upon the application of such Person; and (i) obligations and
liabilities of the

 

H-10

 

types
described in clause (a) through (h) above, directly or indirectly,
guaranteed by such Person.

 

“Indenture”
shall mean the Indenture, dated December 21, 2001 by and between the
Company and the trustee named therein providing for issuance of the
Subordinated Notes.

 

“Interest
Payment Date” shall mean (a) as to any Prime Rate Loan, the last day of
each calendar month during the term hereof and the date on which such Prime
Rate Loan is converted to a Eurocurrency Loan; (b) as to any Eurocurrency
Loan, the last day of the Interest Period applicable thereto and, if such
Interest Period exceeds three months, the date that falls three months after
the beginning of such Interest Period; and (c) as to any Loan, the date
such Loan is paid in full or in part, to the extent of such payment.

 

“Interest
Period” shall mean with respect to any Eurocurrency Loan:

 

(a)                                  initially, the period commencing on the date
such Eurocurrency Loan is made and ending one, two, three or six months
thereafter, as selected by the Company in its notice of borrowing or in its
notice of conversion from a Prime Rate Loan, in each case in accordance with
the terms of Articles II and III hereof; and

 

(b)                                 thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such Eurocurrency
Loan and ending one, two, three or six months thereafter, as selected by the
Company by irrevocable written notice to the Administrative Agent not later
than the Applicable Offshore Time, four Business Days prior to the last day of
the then current Interest Period with respect to a Eurocurrency Loan which is
denominated in an Approved Currency other than Dollars, or 11:00 a.m. (New
York, New York time) three Business Days prior to the last day of the then
current Interest Period with respect to a Eurocurrency Loan which is
denominated in Dollars, and the Administrative Agent shall promptly notify each
of the Lenders of such notice; provided, however, that all of the foregoing
provisions relating to Interest Periods are subject to the following:

 

(i)                                     if any Interest Period would otherwise end on
a day which is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;

 

(ii)                                  if the Company shall fail to give notice as provided
in clause (b) above, the Company shall be deemed to have requested
conversion of the affected Eurocurrency Loan to a Prime Rate Loan on the last
day of the then current Interest Period with respect thereto;

 

(iii)                               any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and

 

(iv)                              no more than ten (10) Interest Periods
may exist at any one time.

 

“Issuing
Lender” shall mean the Person which is the Administrative Agent, in its
capacity as the issuer of Letters of Credit hereunder or its successor Issuing
Lender permitted pursuant to Section 2.03(e) hereof.  The Issuing Lender may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the
Issuing Lender, in which case the term “Issuing Lenders” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.

 

H-11

 

“Lead
Arranger” shall mean HSBC Bank USA, National Association.

 

“Lenders”
shall have the meaning set forth in the preamble hereto and shall include the
Swingline Lender and the Issuing Lender.

 

“Lending
Office” shall mean, for each Lender, the office specified under such Lender’s
name on the signature pages hereof with respect to each Type of Loan, or
such other office as such Lender may designate in writing from time to time to
the Company and the Administrative Agent with respect to such Type of Loan.

 

“Letter
of Credit” shall mean any commercial or standby letter of credit issued by the
Issuing Lender for the account of the Company pursuant to the terms of this
Agreement.

 

“Letter
of Credit Agreement” shall mean the Issuing Lender’s applicable form of
Application for Letter of Credit, as in effect at the time that a request is
made for a Letter of Credit.  If there
are any conflicts between the provisions of any Letter of Credit Agreement and
this Agreement, the provisions of this Agreement shall govern.

 

“Lien”
shall mean any mortgage, pledge, security interest, hypothecation, assignment,
deposit arrangement, encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention agreement, any Capital Lease and
any financing lease having substantially the same economic effect as any of the
foregoing).

 

“Loans”
shall mean, collectively, the Revolving Credit Loans and the Swingline Loans.

 

“Loan
Documents” shall mean, collectively, this Agreement, the Notes, the Guaranties,
the Security Agreement, the Hedging Agreements (but only to the extent that
such Hedging Agreements are between the Company and a Lender and relate to the
Company’s hedging of interest rate exposure under this Agreement), the Pledge
Agreements, and each other agreement executed in connection with the
transactions contemplated hereby or thereby, as each of the same may hereafter
be amended, restated, supplemented or otherwise modified from time to time.

 

“Marketable
Securities” shall mean those securities described in the definition of “Eligible
Investments”, that are classified as current assets, as would be set forth or
reflected on a consolidated balance sheet of the Company and its Subsidiaries,
prepared in accordance with Generally Accepted Accounting Principles applied on
a consistent basis, provided that, for purposes of determining Consolidated
Quick Assets, those securities described in clause (j) of the definition of “Eligible
Investments” shall not exceed 20% of the aggregate amount of Marketable
Securities, at any time.

 

“Material
Adverse Effect” shall mean a material adverse effect upon (a) the
business, operations, property or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole or (b) the ability of the
Company or any Guarantor to perform in any material respect any obligations
under any Loan Document to which it is a party.

 

“Material
Domestic Subsidiary” shall mean a Material Subsidiary which is a Domestic
Subsidiary.

 

“Material
Non-Domestic Subsidiary” shall mean a Material Subsidiary which is a
Non-Domestic Subsidiary.

 

H-12

 

“Material
Subsidiary” shall mean any Subsidiary of the Company which has assets
constituting at least five percent (5%) of Consolidated Total Assets or has
revenues consisting of at least five percent (5%) of Consolidated Total
Revenues, as reflected on the most recent financial statements delivered
pursuant to Section 6.03(a) or (b) hereof.

 

“Multiemployer
Plan” means any Plan that is a “multiemployer plan” (as such term is defined in
Section 4001(a)(3) of ERISA), which is covered by Title IV of ERISA.

 

“Non-Domestic
Subsidiary” shall mean any Subsidiary of the Company which is not a Domestic
Subsidiary.

 

“Non-Material
Domestic Subsidiary” shall mean any Non-Material Subsidiary which is a Domestic
Subsidiary.

 

“Non-Material
Subsidiary” shall mean any Subsidiary of the Company which is not a Material
Subsidiary.

 

“Non-Excluded
Taxes” shall have the meaning set forth in Section 3.10(a) hereof.

 

“Notes”
shall mean, collectively, the Revolving Credit Notes and the Swingline Note.

 

“Obligations”
shall mean all obligations, liabilities and indebtedness of the Company and any
of its Subsidiaries to the Lenders, the Issuing Lender and the Administrative
Agent, whether now existing or hereafter created, absolute or contingent,
direct or indirect, due or not, whether created directly or acquired by
assignment or otherwise, arising under this Agreement, the Notes or any other
Loan Document including, without limitation, all obligations, liabilities and
indebtedness of the Company with respect to the principal of and interest on
the Loans (including any interest that accrues after the filing of any petition
in bankruptcy or the commencement of any insolvency, reorganization or like
proceeding relating to the Company, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), reimbursement of Letters
of Credit, obligations under any Hedging Agreement relating to the Indebtedness
of the Company arising under this Agreement, and all fees, costs, expenses and
indemnity obligations of the Company and any of its Subsidiaries hereunder or
under any other Loan Document (including all fees and expenses of the
Administrative Agent and any Lender incurred pursuant to this Agreement or any
other Loan Document).

 

“Participant”
shall have the meaning set forth in Section 10.05(b) hereof.

 

“Participating
Member States” shall mean each country which from time to time becomes a
Participating Member State as described in EMU Legislation.

 

“Payment
Office” shall mean (a) in the case of payments in Dollars, the
Administrative Agent’s office located at 534 Broad Hollow Road, Melville, New
York 11747 or such other office as the Administrative Agent may designate from
time to time in writing and (b) in the case of payments in any Approved
Currency other than Dollars, such address as the Administrative Agent may, from
time to time, specify.

 

“PBGC”
shall mean the Pension Benefit Guaranty Corporation established pursuant to Section

 

H-13

 

4002
of ERISA, or any successor thereto.

 

“Permitted
Acquisition” shall mean any acquisition (whether by merger or otherwise) by the
Company or any Subsidiary of the Company of more than 50% of the outstanding
capital stock, membership interests, partnership interests or other similar
ownership interests of a Person which is engaged in a line of business similar
to the business (or reasonable extensions thereof) of the Company or such
Subsidiary or the purchase of all or substantially all of the assets owned by
such Person or the purchase of a division, business unit or product line of a
Person; provided (a) the Administrative Agent shall have received, within
ten (10) Business Days of the closing of such Permitted Acquisition, (i) with
respect to a Person which constitutes a Material Domestic Subsidiary, to the
extent not previously received, duly executed amendments with respect to the
Guaranty and the Security Agreement, pursuant to which such Subsidiary becomes
a “Guarantor” and “Grantor” under the Guaranty and the Security Agreement,
respectively, and (ii) with respect to a Person which constitutes a
Material Non-Domestic Subsidiary, to the extent not previously received, a duly
executed Pledge Agreement by the parent of such Material Non-Domestic Subsidiary,
to the extent such documents are required to be delivered pursuant to Section 6.12
hereof; (b) the Administrative Agent shall have received evidence
reasonably satisfactory to it that the shares or other interests in the Person,
or the assets of the Person, which is the subject of the Permitted Acquisition
are, or will be promptly following the closing of such Permitted Acquisition,
free and clear of all Liens, except Permitted Liens, including, without
limitation, with respect to the acquisition of shares or other equity
interests, free of any restrictions on transfer other than restrictions
applicable to the sale of securities under federal and state securities laws
and regulations generally; (c) the Administrative Agent shall have
received (i) within ten (10) Business Days following the closing of
such Permitted Acquisition, if the Permitted Acquisition Purchase Price is less
than $15,000,000, and (ii) not less than five (5) Business Days
preceding the closing of such Permitted Acquisition, if the Permitted
Acquisition Purchase Price is greater than or equal to $15,000,000, the
documentation governing the proposed acquisition, including, without
limitation, the purchase agreement with respect thereto, together with such
other additional documentation or information with respect to the proposed
acquisition as the Administrative Agent may reasonably require; (d) no
Default or Event of Default shall have occurred and be continuing immediately
prior to or would occur after giving effect to the acquisition on a pro  forma
basis and the Administrative Agent shall have received projections and pro
forma financial statements showing that no Default or Event of Default shall
have occurred after giving effect to such acquisition; (e) the acquisition
has either (i) been approved by the Board of Directors or other governing
body of the Person which is the subject of the acquisition or (ii) been
recommended for approval by the Board of Directors or other governing body of
such Person to the shareholders or other members of such Person and
subsequently approved by the shareholders or such members if shareholder or
such member approval is required under applicable law or the by-laws,
certificate of incorporation or other governing instruments of such Person; (f) prior
to the closing of any such acquisition, the Company shall have delivered
evidence to the Administrative Agent (with sufficient copies for each of the
Lenders)  that, on a pro  forma
basis, (i) the Company will be in compliance with the financial condition
covenants of Section 7.13 hereof upon completion of such acquisition and (ii) the
ratio of Consolidated Senior Funded Debt to Consolidated EBITA will not exceed
2.00:1.00 upon completion of such acquisition; (g) in the case of an
acquisition of a Non-Domestic Subsidiary, the business to be acquired shall be
acquired by the Company, a Guarantor or a Material Non-Domestic Subsidiary; (h) the
aggregate Permitted Acquisition Purchase Price (excluding consideration
consisting of the Company’s common stock) paid in connection with all Permitted
Acquisitions, collectively, during each rolling twelve (12) month period shall
not exceed an amount equal to the product of three (3) times Consolidated
EBITA for the trailing four fiscal quarters, provided, that, the
Permitted Acquisition Purchase Price for any single Permitted Acquisition shall
not exceed $20,000,000 if the business which is the subject of such Permitted
Acquisition has a negative Consolidated EBITDA or if Consolidated EBITDA cannot
be reasonably determined by the Company or

 

H-14

 

such Person; and (i) the Company and its Subsidiaries shall not
close more than four (4) Permitted Acquisitions in any rolling twelve (12)
month period.

 

“Permitted
Acquisition Purchase Price” shall mean, with respect to any Permitted
Acquisition, collectively, without duplication, (a) all cash paid by the
Company or any of its Subsidiaries in connection with such Permitted
Acquisition, including transaction costs, fees and other expenses incurred by
the Company or such Subsidiary in connection with such Permitted Acquisition, (b) all
Indebtedness created, and all Indebtedness assumed, by the Company or any of
its Subsidiaries in connection with such Permitted Acquisition, including,
without limitation, the maximum amount of any purchase price to be paid pursuant
to any “earn out” provision contained in the applicable purchase agreements
related to such Permitted Acquisition, (c) the value of all capital stock
issued by the Company or any of its Subsidiaries in connection with such
Permitted Acquisition, and (d) the deferred portion of the purchase price
or any other costs paid by the Company or any of its Subsidiaries in connection
with such Permitted Acquisition, including, but not limited to, consulting
agreements and non-compete agreements. 
For purposes of this definition, if any “earn out” provision in any
purchase agreement for any Permitted Acquisition does not provide for a maximum
payment, the amount to be calculated pursuant to subsection (b) of
this definition with respect to the maximum amount of any purchase price to be
paid pursuant to any “earn out” provision, shall be determined by the
Administrative Agent, on a reasonable basis, on the basis of the projections
provided to the Administrative Agent.

 

“Permitted
Equity Investment” shall mean any acquisition (other than a Permitted
Acquisition) by the Company or any Subsidiary of the Company of the capital
stock, membership interests, partnership interests or other similar interests
of a Person, including any investment in a joint venture, provided that such
acquisition does not result in the Company or such Subsidiary having the right
to vote a majority of the outstanding capital stock or other ownership
interests of such Person.

 

“Permitted
Equity Investment Costs” shall mean, as of any date of determination, the
aggregate amount of cash and other property invested by the Company or any
Subsidiary in a Person, and/or loans made by the Company or any Subsidiary to
such Person, in connection with all Permitted Equity Investments; provided,
however, that the value of any property so invested by the Company or any
Subsidiary shall be equal to the fair market value of such property as of the
date of such investment and such value shall not be adjusted to give effect to
the loss in value of any Permitted Equity Investment.

 

“Permitted
Liens” shall mean the Liens specified in clauses (a) through (n) of Section 7.02
hereof.

 

“Person”
shall mean any natural person, corporation, limited liability company, limited
liability partnership, business trust, joint venture, association, company,
partnership, unincorporated trade or business enterprise or Governmental
Authority.

 

“Plan”
shall mean any Multiemployer Plan or Single-Employer Plan, defined in and
subject to Section 4001 of ERISA, which covers, or at any time during the
five calendar years preceding the date of this Agreement covered, employees of
the Company, any Guarantor or an ERISA Affiliate on account of such employees’
employment by the Company, any Guarantor or an ERISA Affiliate, provided that
such term shall not include any Plan terminated prior to the date hereof and
with respect to which the Company, such Guarantor or such ERISA Affiliate could
not incur any material liability with respect thereto.

 

“Pledge
Agreements” shall mean, collectively, (a) with respect to the Company, the
Pledge 

 

H-15

 

Agreement in the form attached hereto as Exhibit E-1, to be
executed and delivered by the Company on the Closing Date pursuant to Section 5.01
hereof and, thereafter, by the Company as required pursuant to Section 6.12
hereof, (b) with respect to any Domestic Subsidiary, as applicable, the
Pledge Agreement in the form attached hereto as Exhibit E-2, to be
executed and delivered by any Domestic Subsidiary which is the direct holder of
capital stock of any Material Non-Domestic Subsidiary, who is required to
execute the same pursuant to Section 6.12 hereof, and (c) the Foreign
Pledge Agreements, as each of the same may hereafter be amended, restated,
supplemented or otherwise modified, from time to time.

 

“Prime
Rate” shall mean the rate per annum announced by the Person which is the
Administrative Agent from time to time as its prime rate in effect at its
principal office, each change in the Prime Rate shall be effective on the date
such change is announced to become effective without notice or demand of any
kind.  The Prime Rate is a reference rate
and does not necessarily represent the lowest or best rate charged by the Person
which is the Administrative Agent to any customer.

 

“Prime
Rate Loan” shall mean Loans at such time as they are being made and/or
maintained at a rate of interest based upon the Prime Rate.

 

“Purchasing
Lender” shall have the meaning set forth in Section 10.05(c) hereof.

 

“Register”
shall have the meaning set forth in Section 10.05(d) hereof.

 

“Regulation
D” shall mean Regulation D of the Board of Governors of the Federal Reserve
System as the same may be amended or supplemented from time to time.

 

“Relevant
Exchange Rate” shall mean, with respect to any Eurocurrency Loan denominated in
any Approved Currency other than Dollars, the Exchange Rate for the purchase of
Dollars with such Approved Currency in effect on the date which is two Business
Days prior to the later of (a) the date on which such Loan was first made,
or (b) the date on which such Loan was continued, if applicable, pursuant
to the terms of this Agreement.

 

“Reportable
Event” shall mean an event described in Section 4043(c) of ERISA with
respect to a Plan as to which the 30 day notice requirement has not been waived
by the PBGC.

 

“Required
Lenders” shall mean Lenders owed at least 67% of the sum of the aggregate
unpaid principal amount of the Revolving Credit Loans or, if no Revolving
Credit Loans are outstanding, Lenders having at least 67% of the Total
Commitment.

 

“Reserve
Adjusted Eurocurrency Rate” shall mean, with respect to the Interest Period for
each Eurocurrency Loan, the rate per annum (rounded upwards to the next higher
1/16th of one percent) equal to the following:

 

Eurocurrency Base Rate

1.00
- Eurocurrency Reserve Requirement

 

“Revolving
Credit Commitment” shall mean, with respect to each Lender at any time, the
obligation of such Lender to make Revolving Credit Loans to the Company and to
acquire participations in Letters of Credit in an aggregate amount not to
exceed (i) with respect to a Lender party to this Agreement on the Closing
Date, the amount set forth opposite such Lender’s name on the signature pages hereof
under the caption Revolving Credit Commitment, as such amounts may be reduced
or increased in 

 

H-16

 

accordance with the terms of this Agreement or in any Assignment and
Acceptance Agreement executed by such Lender or, (ii) with respect to an
Additional Lender, in an aggregate amount not to exceed the amount set forth in
the Assignment and Acceptance Agreement pursuant to which such Additional
Lender became a Lender, in each case, as such amounts may be reduced or
increased in accordance with any Assignment and Acceptance Agreement executed
by such Additional Lender.

 

“Revolving
Credit Commitment Period” shall mean the period from and including the Closing
Date to, but not including, the Revolving Credit Commitment Termination Date or
such earlier date as the Revolving Credit Commitments shall terminate as
provided herein.

 

“Revolving
Credit Commitment Termination Date” shall mean March 14, 2008.

 

“Revolving
Credit Loans” shall have the meaning set forth in Section 2.01(a) hereof.

 

“Revolving
Credit Notes” shall have the meaning set forth in Section 2.02 hereof.

 

                                                “Security Agreement” shall mean the Security
Agreement in the form attached hereto as Exhibit D, to be executed and
delivered by the Company and the Guarantors on the Closing Date, as the same
may hereafter be amended, restated, supplemented or otherwise modified  from time to time.

 

“Single-Employer
Plan” shall mean a Plan that is a “single-employer plan” (as such term is
defined in Section 4001(a)(15) of ERISA), which is covered by Title IV of
ERISA.

 

“Solvent”
shall mean with respect to any Person as of the date of determination thereof
that (a) the amount of the “present fair saleable value” of the assets of
such Person will, as of such date, exceed the amount of all “liabilities of
such Person, contingent or otherwise,” as of such date, as such quoted terms
are determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable
value of the assets of such Person will, as of such date, be greater than the
amount that will be required on its debts as such debts become absolute and
matured, (c) such Person will not have, as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature, in each case after giving
effect to any right of indemnification and contribution of such Person from or
to any Affiliate.

 

“Standby
LC Disbursement” shall mean a payment made by the Issuing Lender pursuant to a
Standby Letter of Credit.

 

“Standby
LC Exposure” shall mean, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Standby Letters of Credit at such time, and (b) the
aggregate amount of all Standby LC Disbursements that have not yet been
reimbursed by or on behalf of the Company at such time.

 

                                                “Standby LC Margin” shall mean the percentage
indicated as the “Eurocurrency Margin” with respect to Eurocurrency Loans as
set forth and determined in accordance with the definition of “Applicable Rate”.

 

“Standby
Letter of Credit” shall mean any letter of credit issued to support an
obligation of a Person and which may be drawn on only upon the failure of such
Person to perform such obligation or other contingency.

 

“Subordinated
Debt” or “Subordinated Indebtedness” shall mean all debt which is subordinated
in 

 

H-17

 

right of payment to the prior final payment in full of the obligations
of the Company and/or of its Subsidiaries to the Lenders hereunder and under
any other Loan Document on subordination terms satisfactory to and approved in
writing by the Required Lenders (not to be unreasonably withheld or delayed).

 

“Subordinated
Notes” shall mean up to $220,000,000 of 4-1/8% Convertible Subordinated Notes
due 2008 issued by the Company as described in the Indenture.

 

“Subsidiary”
shall mean, with respect to any Person, any corporation, association or other
business entity 50% or more of the voting stock or other ownership interests (including,
without limitation, membership interests in a limited liability company) of
which is, at the time, owned or controlled, directly or indirectly, by such
Person or one or more of its Subsidiaries or a combination thereof.

 

“Swingline
Commitment” shall mean the obligation of the Swingline Lender to make Swingline
Loans to the Company in an aggregate amount not to exceed $2,000,000 at any
time outstanding.

 

“Swingline
Lender” shall mean the Person which is the Administrative Agent, in its
capacity as lender of Swingline Loans.

 

“Swingline
Loan” shall have the meaning set forth in Section 2.04(a) hereof.

 

“Swingline
Note” shall have the meaning set forth in Section 2.04(e) hereof.

 

“Total
Commitment” shall mean, at any time, the aggregate of the Revolving Credit
Commitments in effect at such time which shall be $50,000,000.

 

“TurboDisc
Investigation” shall mean the investigation by the Company, its counsel and
other agents, into improper accounting procedures at its TurboDisc business
unit.

 

“Type”
shall mean as to any Loan its status as a Prime Rate Loan or a Eurocurrency
Loan.

 

“UCP”
shall mean the International Chamber of Commerce Uniform Customs and Practice
for Documentary Credits, 1993 Revision, ICC Publication No. 500 or any
successor publication thereof.

 

“Unfunded
Current Liability” of any Plan shall mean the amount, if any, by which the
present value of the accrued benefits under such Plan as of the close of its
most recent plan year exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the Code.

 

SECTION 1.02.                                  Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the context may require, pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and the neuter.  Except as
otherwise herein specifically provided, each accounting term used herein shall
have the meaning given to it under Generally Accepted Accounting Principles. The
term “including” shall not be limited or exclusive, unless specifically
indicated to the contrary.  The word “will”
shall be construed to have the same meaning in effect as the word “shall”.  The words “herein”, “hereof” and “hereunder”
and other words of similar import refer to this Agreement as a whole, including
the exhibits and schedules hereto and any amendments thereof, all of which are
by this reference incorporated into this Agreement.

 

H-18

 

SECTION 1.03.                                  Currency Equivalents Generally.  Except to the extent expressly provided
otherwise herein (including for purposes of any denomination of any
Eurocurrency Loan not denominated in Dollars into a Loan in Dollars but not for
purposes of the preparation of any financial statements delivered pursuant
hereto or any exchange rate determinations expressly required to be done using
a different method), the equivalent in any Approved Currency (or any other
currency) of an amount in Dollars, and the equivalent in Dollars of any amount
in any Approved Currency (or any other currency), shall be determined at the
Exchange Rate.

 

ARTICLE II

LOANS

 

SECTION 2.01.                                  Revolving
Credit Loans.

 

(a)                                  Subject to the terms and conditions, and
relying upon the representations and warranties, set forth herein, each Lender
severally agrees to make loans (individually a “Revolving Credit Loan” and,
collectively, the “Revolving Credit Loans”) in Dollars or any other Approved
Currency to the Company from time to time during the Revolving Credit
Commitment Period up to, but not exceeding, at any one time outstanding the
aggregate Dollar Equivalent Amount of its Revolving Credit Commitment; provided,
however, that no Revolving Credit Loan shall be made if, after giving
effect to such Revolving Credit Loan, the Dollar Equivalent Amount of the
Aggregate Outstandings would exceed the Total Commitment or the Dollar
Equivalent Amount of all Eurocurrency Loans denominated in a currency other
than Dollars would exceed the Eurocurrency Sublimit.  During the Revolving Credit Commitment
Period, the Company may from time to time borrow, repay and reborrow Revolving
Credit Loans on or after the date hereof and prior to the Revolving Credit
Commitment Termination Date, subject to the terms, provisions and limitations
set forth herein.  The Revolving Credit
Loans may be (i) Eurocurrency Loans, (ii) Prime Rate Loans or (iii) a
combination thereof, provided that all Loans in Approved Currencies
other than Dollars shall be Eurocurrency Loans.

 

(b)                                 The Company shall give the Administrative
Agent irrevocable written notice (or telephonic notice promptly confirmed in
writing) not later than: (i) the Applicable Offshore Time, four Business
Days prior to the date of each proposed Eurocurrency Loan under this Section 2.01
denominated in any Approved Currency other than Dollars, (ii) 11:00 a.m.
(New York, New York time) three Business Days prior to the date of each
proposed Eurocurrency Loan under this Section 2.01 denominated in Dollars,
or (iii) prior to 11:00 a.m. (New York, New York  time) on the date of each proposed Prime Rate
Loan under this Section 2.01, provided that no Eurocurrency Loan shall be
made less than one month prior to the Revolving Credit Commitment Termination
Date.  Such notice shall be irrevocable
and shall specify (i) the amount and Type of the proposed borrowing, (ii) the
proposed Borrowing Date, and (iii) if a Eurocurrency Loan, the initial
Interest Period and the proposed currency thereof which shall be an Approved
Currency.  Upon receipt of such notice
from the Company, the Administrative Agent shall promptly notify each Lender of
such request, and shall promptly thereafter, upon determination thereof, notify
each Lender of the amount of such Lenders’ Commitment Proportion of such
requested Loan and, if a Eurocurrency Loan denominated in an Approved Currency
other than Dollars, the Dollar Equivalent Amount thereof and the applicable
Exchange Rate used by the Administrative Agent to determine such Dollar
Equivalent Amount.  Except for borrowings
which utilize the full remaining amount of the Total Commitment, each borrowing
of a Prime Rate Loan (other than a Swingline Loan) shall be in an amount not
less than $1,000,000 or, if greater, whole multiples of $1,000,000 in excess
thereof.  Each borrowing of a
Eurocurrency Loan shall be in an amount not less than $2,000,000 (or the
Applicable Currency Equivalent thereof) or whole multiples of $1,000,000 (or
the Applicable Currency Equivalent thereof) in excess thereof.  Funding of all Revolving Credit Loans shall
be made in accordance with Section 3.12 of 

 

H-19

 

this Agreement.

 

(c)                                  The Company shall have the right, upon not
less than five Business Days’ prior written notice to the Administrative Agent,
to terminate the Total Commitment or from time to time to permanently reduce
the amount of the Total Commitment; provided, however, that no such termination
or reduction shall be permitted if, after giving effect thereto and to any
payments of the Revolving Credit Loans and the Swingline Loans made on the
effective date thereof, the Dollar Equivalent Amount of the Aggregate
Outstandings would exceed the Total Commitment as then reduced; provided,
further, that any such termination or reduction requiring prepayment of any
Eurocurrency Loan shall be made only on the last day of the Interest Period
with respect thereto or on the date of payment in full of all amounts owing
pursuant to Section 3.08 hereof as a result of such termination or
reduction. The Administrative Agent shall promptly notify each Lender of each
notice from the Company to terminate or permanently reduce the amount of the
Total Commitment pursuant to this Section 2.01(c).  Any such reduction shall be in the amount of
$5,000,000 or whole multiples of $1,000,000 in excess thereof, and shall reduce
permanently the amount of the Total Commitment then in effect.  The Total Commitment, once reduced or
terminated, may not be reinstated except in the Lenders’ sole discretion and
subject to receipt of such credit approval and other authorizations that the
Lenders may require.

 

(d)                                 The several agreements of the Lenders to make
Revolving Credit Loans pursuant to this Section 2.01 shall automatically
terminate on the Revolving Credit Commitment Termination Date.  Upon such termination, the Company shall
immediately repay in full the principal amount of the Revolving Credit Loans
then outstanding, together with all accrued interest thereon and all other
amounts due and payable hereunder.

 

SECTION 2.02.                                  Revolving Credit Note.   The Revolving Credit Loans made by each
Lender shall be evidenced by a promissory note of the Company (individually a “Revolving
Credit Note” and, collectively, the “Revolving Credit Notes”),
substantially in the form attached hereto as Exhibit A, each appropriately
completed, duly executed and delivered on behalf of the Company and payable to
the order of such Lender in a principal amount equal to the Revolving Credit
Commitment of such Lender.  Each Revolving
Credit Note shall (a) be dated the Closing Date, (b) be stated to
mature on the Revolving Credit Commitment Termination Date, and (c) bear
interest from the date of the first Revolving Credit Loan until paid in full on
the unpaid principal amount thereof from time to time outstanding as provided
in Section 3.01 hereof.  Each Lender
is authorized to record the date, Type and amount of each Revolving Credit
Loan, the Applicable Currency thereof, and the date and amount of each payment
or prepayment of principal of each Revolving Credit Loan in such Lender’s
records or on the grid schedule annexed to such Lender’s Revolving Credit
Note; provided, however, that the failure of a Lender to set
forth each such Revolving Credit Loan, payment and other information shall not
in any manner affect the obligation of the Company to repay each Revolving
Credit Loan made by such Lender in accordance with the terms of its Revolving
Credit Note and this Agreement.  The
Revolving Credit Note, the grid schedule and the books and records of each
Lender shall constitute presumptive evidence of the information so recorded
absent demonstrable error.

 

SECTION 2.03.                                  Letters
of Credit.

 

(a)                                  Generally. 
Subject to the terms and conditions set forth in this Agreement, upon
the written request of the Company in accordance herewith, the Issuing Lender
shall issue Letters of Credit at any time during the Revolving Credit
Commitment Period with pro rata participation by all of the Lenders in
accordance with their respective Commitment Proportions.  Notwithstanding the foregoing, no Letter of
Credit shall be issued if, after giving effect to the same, the Dollar
Equivalent 

 

H-20

 

Amount of the Aggregate Outstandings would exceed the Total Commitment
or Aggregate Letters of Credit Outstanding would exceed $20,000,000.  Furthermore, no Letter of Credit shall be
issued without the consent of the Required Lenders during the occurrence and
continuance of an Event of Default.  Each
request for issuance of a Letter of Credit shall be in writing and shall be
received by the Issuing Lender by no later than 12:00 noon (New York, New York
time) on the day which is at least two Business Days prior to the proposed date
of issuance.  Such issuance shall occur
by no later than 5:00 p.m. on the proposed date of issuance (assuming
proper prior notice as aforesaid). 
Subject to the terms and conditions contained herein, the expiry date,
the type of Letter of Credit (i.e., Commercial Letter of Credit or
Standby Letter of Credit) and the amount and beneficiary of the Letters of
Credit will be as designated by the Company. 
The Issuing Lender shall promptly notify the Administrative Agent and
the Lenders of the issuance of any Letter of Credit and of the amounts of all
Letters of Credit issued hereunder and of any extension, reduction, termination
or amendment of any Letter of Credit. 
Each Letter of Credit issued by the Issuing Lender hereunder shall be
denominated in Dollars and shall identify: (i) the dates of issuance and
expiry of such Letter of Credit, (ii) the amount of such Letter of Credit
(which shall be a sum certain), (iii) the beneficiary of such Letter of
Credit, and (iv) the drafts and other documents necessary to be presented
to the Issuing Lender upon drawing thereunder. 
In no event shall any Letter of Credit expire (or by its terms be
required to be renewed to a date) after the Revolving Credit Commitment
Termination Date. The Issuing Lender will not issue a Letter of Credit
hereunder which expires after the earlier to occur of (1) one (1) year
from the date of issuance of such Letter of Credit  (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (2) the Revolving
Credit Commitment Termination Date.  The
Company agrees to execute and deliver to the Issuing Lender such further
documents and instruments in connection with any Letter of Credit issued
hereunder (including without limitation, applications therefor) as the Issuing
Lender in accordance with its customary practices may reasonably request.

 

(b)                                 Drawings Under Letters of
Credit.  The Company hereby absolutely and
unconditionally promises to pay the Issuing Lender not later than 2:00 p.m.
(New York, New York time) the amount of each drawing under a Letter of Credit
if the Company receives notice of such drawing prior to 10:00 a.m. (New
York, New York time) on the date of such drawing, or if such notice has not
been received by the Company prior to such time on such date, then not later
than 12:00 noon (New York, New York time) on the Business Day immediately
following the day that the Company receives such notice; provided, however, (i) if
any drawing was in an amount not less than $1,000,000, the Company may, subject
to the conditions to borrowing set forth herein, request in accordance with Section 2.01
hereof that such payment be financed with a Revolving Credit Loan which is a
Prime Rate Loan  in an equivalent amount,
and, to the extent so financed, the Company’s obligation to make such payment
shall be discharged and replaced by such a Prime Rate Loan and (ii) if
such drawing or payment was in an amount 
less than $1,000,000, the Company may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.04 hereof
that such payment be financed with a Swingline Loan in an equivalent amount
and, to the extent so financed, the Company’s obligation to make such payment
shall be discharged and replaced by such Swingline Loan.   Such request shall be made by the Company on
the date of receipt of notice from the Issuing Lender of a drawing under a
Letter of Credit as applicable.  The
Issuing Lender shall notify the Administrative Agent and each Lender of such
request in accordance with Section 2.01 hereof.  If the Company fails to make such payment
when due, the Issuing Lender shall notify each Lender of the amount of the
drawing under the applicable Letter of Credit. 
Each Lender agrees that on the first Business Day after receipt of such
notice, it will immediately make available by no later than 12:00 noon (New
York, New York time), to the Issuing Lender at the Payment Office by payment in
Dollars and in immediately available funds, its Commitment Proportion of such
drawing, provided (i) each Lender’s obligation shall be reduced by its
Commitment Proportion of any reimbursement by the Company in respect of any
such drawing pursuant to this Section 2.03 and (ii) no 

 

H-21

 

Lender shall be required to make payments to the Issuing Lender with
respect to a drawing or payment which the Company reimbursed with the proceeds
of a Revolving Credit Loan, as contemplated above, if such Lender fully funded
its Commitment Proportion of such Revolving Credit Loan in accordance with Section 3.12
hereof.  Any payment made by a Lender
pursuant to this Section 2.03(b) to reimburse the Issuing Lender for
any drawing under a Letter of Credit (other than a Prime Rate Loan or a
Swingline Loan as contemplated above) shall not constitute a Revolving Credit
Loan or a Swingline Loan and shall not relieve the Company of its obligation to
reimburse the Issuing Lender for such drawing or payment.  Each drawing under a Letter of Credit which
is not paid on the date such drawing is made shall accrue interest, for each
day from and including the date of such drawing to but excluding the date that
the Company reimburses the Issuing Lender in full for such drawing at the rate
per annum then applicable to Prime Rate Loans; provided, however, that if the
Company fails to reimburse such drawing when due pursuant to this paragraph
(b), then the Company shall pay to the Issuing Lender interest on the amount of
such drawing at the rate per annum set forth in Section 3.01(c) hereof.  Interest accruing pursuant to the preceding
sentence shall be for the account of the Issuing Lender, except that interest
accrued on and after the date of payment by any Lender pursuant to this Section 2.03(b) to
reimburse the Issuing Lender shall be for the account of such Lender to the
extent of such payment.  The Issuing
Lender shall promptly notify the Administrative Agent (which shall notify each
Lender) of each drawing under a Letter of Credit.

 

(c)                                  Letter of Credit
Obligations Absolute.

 

(i)                                     The obligation of the Company to reimburse
the Issuing Lender as provided hereunder in respect of drawings under Letters
of Credit shall rank pari passu with the obligation of the Company to
repay the Revolving Credit Loans hereunder, and shall be absolute and
unconditional under any and all circumstances subject to subsection (ii) below.  Without limiting the generality of the
foregoing, the obligation of the Company to reimburse the Issuing Lender in
respect of drawings under Letters of Credit shall not be subject to any defense
based on the non-application or misapplication by the beneficiary of the
proceeds of any such drawing or the legality, validity, regularity or
enforceability of the Letters of Credit or any related document, even though
such document shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Company, the beneficiary of any Letter of Credit,
or any financial institution or other party to which any Letter of Credit may
be transferred.  The Issuing Lender may
accept or pay any draft presented to it under any Letter of Credit regardless
of when drawn or made and whether or not negotiated, if such draft,
accompanying certificate or documents and any transmittal advice are presented
or negotiated on or before the expiry date of such Letter of Credit or any
renewal or extension thereof then in effect, and is in substantial compliance
with the terms and conditions of such Letter of Credit.  Furthermore, neither the Issuing Lender nor
any of its correspondents nor any Lender shall be responsible, as to any
document presented under a Letter of Credit which appears to be regular on its
face, and appears on its face to be in substantial compliance with the terms of
such Letter of Credit, for the validity or sufficiency of any signature or
endorsement, for delay in giving any notice or failure of any instrument to
bear adequate reference to any Letter of Credit, or for failure of any Person
to note the amount of any draft on the reverse of any Letter of Credit.  The Issuing Lender shall have the right, in
its sole discretion, to decline to accept any documents and to decline to make
payment under any Letter of Credit if the documents presented are not in strict
compliance with the terms of such Letter of Credit.

 

(ii)                                  Any action, inaction or omission on the part
of the Issuing Lender or any of its correspondents under or in connection with
any Letter of Credit or the related instruments, documents or property, if in
good faith and in conformity with such laws, regulations or customs as are
applicable, shall be binding upon the Company and shall not place the Issuing
Lender or any of its 

 

H-22

 

correspondents or any Lender under any liability to the Company in the
absence of (x) gross negligence or willful misconduct by the Issuing Lender or
its correspondents or (y) the failure by the Issuing Lender to pay under a
Letter of Credit after presentation of a draft and documents strictly complying
with such Letter of Credit unless the Issuing Lender is prohibited from making
such payment pursuant to a court order. 
The Issuing Lender’s rights, powers, privileges and immunities specified
in or arising under this Agreement are in addition to any heretofore or at any
time hereafter otherwise created or arising, whether by statute or rule of
law or contract.  All Letters of Credit
issued hereunder will, except to the extent otherwise expressly provided
hereunder, be governed by the UCP to the extent applicable and not inconsistent
with the laws of the State of New York.

 

(d)                                 Obligations of Lenders in
Respect of Letters of Credit.   Each Lender acknowledges that each Letter of
Credit issued by the Issuing Lender pursuant to this Agreement is issued on
behalf of and with the ratable participation of all of the Lenders (i.e., in
accordance with their respective Commitment Proportions), and each Lender
agrees to make the payments required by subsection (b) above and
agrees to be responsible for its pro  rata share of all
liabilities incurred by the Issuing Lender with respect to each Letter of
Credit issued, established, opened or extended by the Issuing Lender pursuant
to this Agreement for the account of the Company hereunder.  Each Lender agrees with the Issuing Lender
and the other Lenders that its obligation to make the payments required by subsection (b) above
shall not be affected in any way by any circumstances (other than the gross
negligence or willful misconduct of the Issuing Lender) occurring before or
after the making of any payment by the Issuing Lender pursuant to any Letter of
Credit, including, without limitation: (i) any modification or amendment
of, or any consent, waiver, release or forbearance with respect to, any of the
terms of this Agreement or any other instrument or document referred to herein;
(ii) the existence of any Default or Event of Default; or (iii) any
change of any kind whatsoever in the financial position or credit worthiness of
the Company.

 

(e)                                  Replacement of the Issuing
Lender.  The Issuing Lender may be replaced at any
time by written agreement among the Company, the Administrative Agent, the
replaced Issuing Lender and the successor Issuing Lender.  The Administrative Agent shall notify the
Lenders of any such replacement of the Issuing Lender.  At the time any such replacement shall become
effective, the Company shall pay all unpaid fees accrued for the account of the
replaced Issuing Lender pursuant to Section 3.04 hereof.  From and after the effective date of any such
replacement, (i) the successor Issuing Lender shall have all the rights
and obligations of the Issuing Lender under this Agreement with respect to
Letters of Credit to be issued thereafter, and (ii) references herein to
the term “Issuing Lender” shall be deemed to refer to such successor or to any
previous Issuing Lender, or to such successor and all previous Issuing Lenders,
as the context shall require.  After the
replacement of an Issuing Lender hereunder, the replaced Issuing Lender shall
remain a party hereto and shall continue to have all the rights and obligations
of an Issuing Lender under this Agreement with respect to Letters of Credit
issued prior to such replacement, but shall not be required to issue additional
Letters of Credit.

 

SECTION 2.04.                                  Swingline
Loans.

 

(a)                                  Subject to the terms and conditions, and
relying upon the representations and warranties, set forth herein, the
Swingline Lender agrees to make loans in Dollars (individually a “Swingline
Loan” and, collectively, the “Swingline Loans”) to the Company from time to
time during the Revolving Credit Commitment Period up to, but not exceeding, at
any one time outstanding the Swingline Commitment; provided, however,
that no Swingline Loan shall be made if, after giving effect to such Swingline
Loan, the Dollar Equivalent Amount of the Aggregate Outstandings would exceed
the Total Commitment; and provided  further that no Swingline Loan
shall be made without the consent of the 

 

H-23

 

Required Lenders during the occurrence and continuance of an Event of
Default.  The proceeds from Swingline
Loans may not be used to repay outstanding Revolving Credit Loans.  During the Revolving Credit Commitment
Period, the Company may from time to time borrow, repay and reborrow Swingline
Loans on or after the date hereof and prior to the Revolving Credit Commitment
Termination Date, subject to the terms, provisions and limitations set forth
herein.  Each Swingline Loan shall be a
Prime Rate Loan.

 

(b)                                 The Company shall give the Administrative
Agent irrevocable written notice (or telephonic notice promptly confirmed in
writing) not later than 2:00 p.m. (New York, New York time) on the date of
each proposed Swingline Loan under this Section 2.04.  Such notice shall be irrevocable and shall
specify (i) the amount of the proposed borrowing, and (ii) the
proposed Borrowing Date.  Upon receipt of
such notice from the Company, the Administrative Agent shall promptly notify
the Swingline Lender and each Lender thereof. 
Each borrowing of a Swingline Loan shall be in an amount not less than
$100,000 or, if greater, whole multiples of $100,000 in excess thereof.  The Swingline Lender shall make each
Swingline Loan available to the Company by means of a credit to the operating
account of the Company with the Swingline Lender (or, in the case of a Swingline
Loan made to finance or reimburse a Letter of Credit drawing in accordance with
Section 2.04(b) hereof, by remittance to the Issuing Lender) by 4:00 p.m.
(New York, New York time) on the requested date of such Swingline Loan.

 

(c)                                  So long as no Default or Event of Default has
occurred and is continuing, the Company may repay Swingline Loans with the
proceeds of a Revolving Credit Loan. 
Each Swingline Loan shall be payable on demand.  The Swingline Lender may, at any time,
require the Lenders to acquire participations with respect to all or a portion
of the Swingline Loans outstanding.  If (i) the
Company desires to repay such Swingline Loan with the proceeds of a Revolving
Credit Loan or (ii) the Swingline Lender desires to have the Lenders
acquire participations, the Swingline Lender shall, by written notice given to
the Administrative Agent not later than 10:00 a.m. (New York, New York
time) on any Business Day, require the Lenders to acquire participations on
such Business Day with respect to all or a portion of the Swingline Loans
outstanding.  Such notice shall specify
the aggregate amount of Swingline Loans which will become Revolving Credit
Loans.  Promptly upon receipt of such
notice, the Administrative Agent will give notice thereof to each Lender,
specifying in such notice such Lender’s Commitment Proportion of such Swingline
Loan or Loans.  Each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided
above, to pay to the Administrative Agent, for the account of the Swingline
Lender, such Lender’s Commitment Proportion of such Swingline Loan or
Loans.  Each Lender acknowledges and
agrees that its obligation to acquire a 
participation in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or Event of Default or
reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.  Each Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 3.12 hereof with respect to Loans made
by such Lender, and the Administrative Agent shall promptly pay to the
Swingline Lender the amounts so received by it from the Lenders.  The Administrative Agent shall notify the
Company of any participation in any Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender
from the Company (or other party on behalf of the Company) in respect of a
Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale
of a participation therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear.   The purchase of a
participation in a Swingline Loan pursuant to 

 

H-24

 

this paragraph (c) shall not relieve the Company of any default in
the payment thereof.

 

(d)                                 The agreement of the Swingline Lender to make
Swingline Loans pursuant to this Section 2.04 shall automatically
terminate on the Revolving Credit Commitment Termination Date.  Upon such termination, the Company shall
immediately repay the Swingline Lender or the Administrative Agent (for the
benefit of the applicable Lenders), as applicable, in full the principal amount
of the Swingline Loans then outstanding, together with all accrued interest
thereon and all other amounts due and payable hereunder.

 

(e)                                  The Swingline Loans made by the Swingline
Lender shall be evidenced by a promissory note of the Company (the “Swingline
Note”), substantially in the form attached hereto as Exhibit B,
appropriately completed, duly executed and delivered on behalf of the Company
and payable to the order of the Swingline Lender in a principal amount equal to
the Swingline Commitment.  The Swingline
Note shall (a) be dated the Closing Date, (b) be stated to mature on
the Revolving Credit Commitment Termination Date, and (c) bear interest
from the date thereof until paid in full on the unpaid principal amount thereof
from time to time outstanding as provided in Section 3.01 hereof.  The Swingline Lender is authorized to record
the date and amount of each Swingline Loan and the date and amount of each
payment or prepayment of principal of each Swingline Loan in the Swingline
Lender’s records or on the grid schedule annexed to the Swingline Note; provided,
however, that the failure of the Swingline Lender to set forth each such
Swingline Loan, payment and other information shall not in any manner affect
the obligation of the Company to repay each Swingline Loan made by the
Swingline Lender in accordance with the terms of the Swingline Note and this
Agreement.  The Swingline Note, the grid schedule and
the books and records of the Swingline Lender shall constitute presumptive
evidence of the information so recorded absent demonstrable error.

 

ARTICLE III

PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;

FEES AND PAYMENTS

 

SECTION 3.01.                                  Interest
Rate; Continuation and Conversion of Loans,

 

(a)                                  Each Prime Rate Loan  shall bear interest for the period from the
date thereof on the unpaid principal amount thereof at a fluctuating rate per
annum equal to the Prime Rate plus the Applicable Rate.

 

(b)                                 Each Eurocurrency Loan shall bear interest
for the Interest Period applicable thereto on the unpaid principal amount
thereof at a rate per annum equal to the Reserve Adjusted Eurocurrency Rate
determined for each Interest Period thereof in accordance with the terms hereof
plus the Applicable Rate.

 

(c)                                  Upon the occurrence and during the
continuance of an Event of Default the outstanding principal amount of the
Loans shall, at the option of the Required Lenders, bear interest payable on
demand at a rate of interest (i) with respect to payments of principal, 2%
per annum plus the interest rate otherwise then in effect and (ii) with
respect to payments of any other amount, 2% per annum plus the rate that would
be applicable to Prime Rate Loans, from time to time.

 

(d)                                 If the Company shall default in the payment
of the principal or interest on any portion of any Loan or any other amount
becoming due hereunder, whether with respect to the reimbursement of drawings
under Letters of Credit, interest, fees, expenses or otherwise, the Company 

 

H-25

 

shall on demand from time to time pay interest on such defaulted amount
accruing from the date of such default (without reference to any period of
grace) up to and including the date of actual payment (after as well as before
judgment) at a rate of two (2%) percent per annum plus the interest rate
otherwise then in effect, or if no interest rate is in effect, two (2%) percent
per annum plus the Prime Rate.

 

(e)                                  The Company may elect from time to time to
convert outstanding Revolving Credit Loans from Eurocurrency Loans denominated
in Dollars to Prime Rate Loans by giving the Administrative Agent  irrevocable written notice of such election
not later than 11:00 a.m. (New York, New York time) three Business Day
prior to the effective date of such election, provided that any such conversion
of Eurocurrency Loans shall only be made on the last day of an Interest Period
with respect thereto or upon the date of payment in full of any amounts owing
pursuant to Section 3.08 hereof as a result of such conversion.  Upon receipt of such notice, the
Administrative Agent shall promptly notify each Lender thereof.  The Company may elect from time to time to
convert outstanding Revolving Credit Loans from Prime Rate Loans to
Eurocurrency Loans by giving the Administrative Agent irrevocable written
notice of such election not later than (i) the Applicable Offshore Time,
four Business Days prior to the date of the proposed conversion if the
conversion is to a Eurocurrency Loan denominated in any Approved Currency other
than Dollars, or (ii) 11:00 a.m. (New York, New York time) three
Business Days prior to the date of the proposed conversion if the conversion is
to a Eurocurrency Loan denominated in Dollars. 
Upon receipt of such notice the Administrative Agent shall promptly
notify each Lender thereof.  All or any part
of outstanding Prime Rate Loans (other than Swingline Loans) may be converted
as provided herein, provided that each conversion shall be in the principal
amount of $2,000,000 (or the Applicable Currency Equivalent thereof) or whole
multiples of $1,000,000 (or the Applicable Currency Equivalent thereof) in
excess thereof; and further provided that no Default or Event of Default shall
have occurred and be continuing.  Any
conversion to or from Eurocurrency Loans hereunder shall be in such amounts and
be made pursuant to such elections so that, after giving effect thereto, the
aggregate principal amount of all Eurocurrency Loans having the same Interest
Period and denominated in the same currency shall not be less than $2,000,000
(or the Applicable Currency Equivalent thereof).

 

(f)                                    Any Eurocurrency Loan in a minimum principal
amount of $2,000,000 (or the Applicable Currency Equivalent thereof) may be
continued as such upon the expiration of an Interest Period with respect
thereto by compliance by the Company with the notice provisions contained in
the definition of Interest Period.  If
the Company shall not have so notified the Administrative Agent of its
intention to continue such Loan, upon the expiration of such Interest Period
for (i) any Eurocurrency Loan denominated in Dollars, or any portion
thereof, such Loan or portion thereof shall be automatically converted to a
Prime Rate Loan, except to the extent that such Loan shall have been repaid
hereunder or shall be required to be repaid hereunder, or (ii) any
Eurocurrency Loan denominated in an Approved Currency other than Dollars, or
any portion thereof, such Loan or portion thereof shall be required to be
repaid.  Notwithstanding anything to the
contrary, no Eurocurrency Loan may be continued as such when any Default or
Event of Default has occurred and is continuing, but shall be automatically
converted to a Prime Rate Loan, if such Eurocurrency Loan is denominated in
Dollars or repaid in full, if such Eurocurrency Loan is denominated in an
Approved Currency other than Dollars, on the last day of the Interest Period in
effect when the Administrative Agent is notified, or otherwise has actual
knowledge, of such Default or Event of Default.

 

(g)                                 If the Company shall fail to select the
duration of any Interest Period for any Eurocurrency Loan in accordance with
the definition of “Interest Period” set forth in Section 1.01 hereof, the
Company shall be deemed to have selected an Interest Period of one month.

 

H-26

 

(h)                                 No Revolving Credit Loan may be converted to
or continued as a Eurocurrency Loan (i) with an Interest Period that
extends beyond the Revolving Credit Commitment Termination Date, or (ii) 
less than one month before the Revolving Credit Commitment Termination
Date.   In addition, except as otherwise
provided in Sections 3.01(e) and 3.06 
hereof or in the definition of “Interest Period” in Section 1.01
hereof, no Loan in one Approved Currency may be converted to a Loan in another
Approved Currency.

 

(i)                                     Anything in this Agreement or in any Note to
the contrary notwithstanding, the obligation of the Company to make payments of
interest shall be subject to the limitation that payments of interest shall not
be required to be paid to a Lender to the extent that the charging or receipt
thereof would not be permissible under the law or laws applicable to such
Lender limiting the rates of interest that may be charged or collected by such
Lender.  In each such event payments of
interest required to be paid to such Lender shall be calculated at the highest
rate permitted by applicable law until such time as the rates of interest
required hereunder may lawfully be charged and collected by such Lender.  If the provisions of this Agreement or any
Note would at any time otherwise require payment by the Company to any Lender
of any amount of interest in excess of the maximum amount then permitted by
applicable law, the interest payments to such Lender shall be reduced to the
extent necessary so that such Lender shall not receive interest in excess of
such maximum amount.

 

(j)                                     Interest on each Loan shall be payable in
arrears on each applicable Interest Payment Date and shall be calculated on the
basis of a year of 360 days and shall be payable for the actual days
elapsed.  Any rate of interest on the
Loans or other Obligations which is computed on the basis of the Prime Rate
shall change when and as the Prime Rate changes in accordance with the
definition thereof.  Each determination
by the Administrative Agent of an interest rate or fee hereunder shall, absent
demonstrable error, be conclusive and binding for all purposes.

 

SECTION 3.02.                                  Use
of Proceeds.  The proceeds of the
Revolving Credit Loans shall be used (a) to pay the Existing Indebtedness,
(b) to finance Permitted Acquisitions, (c) for general working
capital and other corporate purposes and (d) to finance up to $25,000,000
of repurchases by the Company of the Subordinated Notes.  The Swingline Loans shall be used by the
Company for general working capital and other corporate purposes.  Letters of Credit shall be issued by the
Issuing Lender for the account of the Company and shall be issued for purposes
in connection with, and in the ordinary course of, the business of the Company
or the Guarantors consistent with historical purposes of standby and commercial
letters of credit issued for the account of the Company prior to the date
hereof.

 

SECTION 3.03.                                  Prepayments.

 

(a)                                  Voluntary.  The Company may, at any time
and from time to time, prepay the then outstanding Loans (including, without
limitation, Swingline Loans), in whole or in part, without premium or penalty,
except as provided in Section 3.08 hereof, upon written notice to the
Administrative Agent (or telephonic notice promptly confirmed in writing) not
later than 11:00 a.m. (New York, New York time) three Business Days before
the date of prepayment with respect to prepayments of Eurocurrency Loans, or
11:00 a.m. (New York, New York time) on the day of prepayment with respect
to Prime Rate Loans.  Each notice shall
be irrevocable and shall specify the date and amount of prepayment and whether
such prepayment is of Eurocurrency Loans or Prime Rate Loans or a combination
thereof, and if a combination thereof, the amount of prepayment allocable to
each.  Upon receipt of such notice to
repay Revolving Credit Loans, the Administrative Agent shall promptly notify
each Lender thereof.  If such notice is
given, the Company shall make such prepayment, and the amount specified in such
notice shall be due and payable, on the date specified therein.  Each partial prepayment pursuant to this Section 

 

H-27

 

3.03 shall be in a principal amount of (i) $1,000,000 (or the
Applicable Currency Equivalent thereof), or whole multiples of $1,000,000 (or
the Applicable Currency Equivalent thereof) in excess thereof with respect to
Eurocurrency Loans, and (ii) $500,000 or whole multiples of $100,000 in
excess thereof with respect to Prime Rate Loans.

 

(b)                                 Mandatory.  To the extent that (i) the
Dollar Equivalent Amount of the Aggregate Outstandings exceeds the Total Commitment
or (ii) the Dollar Equivalent Amount of all Obligations denominated in
Approved Currencies other than Dollars exceeds the Eurocurrency Sublimit due to
a change in applicable Exchange Rates, then the Company shall immediately
prepay the Revolving Credit Loans to the extent necessary to cause compliance
after repayment in full of the Loans with each of the foregoing.  To the extent that such prepayments are
insufficient to cause such compliance, the Company shall pledge to the
Administrative Agent, for the ratable benefit of the Lenders, Cash Collateral
in an amount equal to the amount of such short-fall, which Cash Collateral
shall secure the reimbursement obligations of the Company to the Issuing Lender
with respect to Letters of Credit.  All
such prepayments shall be applied, first, to Prime Rate Loans outstanding and
second, to Eurocurrency Loans outstanding, in such order as the Administrative
Agent shall determine in its sole and absolute discretion.

 

All
prepayments shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment.

 

SECTION 3.04.                                  Fees.

 

(a)                                  The Company agrees to pay to the
Administrative Agent for the account of, and pro rata distribution to, each
Lender a commitment fee (the “Commitment Fee”) on the average daily
unused portion of the Total Commitment (without giving effect to any Swingline
Loans then outstanding) from the date of this Agreement until the Revolving
Credit Commitment Termination Date at a rate per annum equal to the Applicable
Rate, based on a year of 360 days, payable in arrears on the last day of March,
June, September, and December of each year commencing March 31, 2005,
on the Revolving Credit Commitment Termination Date and on each date the
Revolving Credit Commitment is permanently reduced in whole or in part.

 

(b)                                 The Company agrees to pay to the
Administrative Agent for the account of, and pro rata distribution to, each
Lender a closing fee equal to 0.30% of such Lender’s Revolving Credit
Commitment on the Closing Date.

 

(c)                                  The Company shall pay to the Administrative
Agent for the account of, and pro rata distribution to, the Lenders a
commission with respect to the Lenders’ participation in Standby Letters of
Credit equal to the Standby LC Margin multiplied by the average daily amount of
the Standby LC Exposure during the period from and including the Closing Date
to but excluding the later of (a) the Revolving Credit Commitment
Termination Date and (b) the date on which such Lender ceases to have any
Standby LC Exposure.   Such commissions
with respect to Standby Letters of Credit shall be payable in arrears on the
last Business Day of March, June, September and December of each
year, commencing March 31, 2005; provided that all such fees shall be
payable on the date on which the Total Commitment terminates and any such fees
accruing after the date on which the Total Commitment terminates shall be
payable on demand.  All commissions with
respect to Standby Letters of Credit shall be computed on the basis of a year
of three hundred sixty (360) days and shall be payable for the actual number of
days elapsed.

 

(d)                                 The Company shall pay to the Administrative
Agent for the account of, and pro rata

 

H-28

 

distribution to each Lender, a payment fee equal to 0.25% of the amount
paid on each Commercial Letter of Credit payable on the date of payment of such
amount by the Issuing Lender.

 

(e)                                  In addition, the Company shall pay to the
Issuing Lender for its own account, upon issuance of any Letter of Credit
hereunder, a fronting fee equal to the greater of (i) 0.125% of the face
amount of each Letter of Credit issued hereunder, and (ii) $250.  In addition, the Company shall pay to the
Issuing Lender, upon its demand and for its own account, the customary fees
charged by the Issuing Lender with respect to the processing and administration
of Letters of Credit (including, without limitation, amendments to Letters of
Credit).

 

(f)                                    In addition, the Company agrees to pay to the
Administrative Agent and the Lead Arranger for the Administrative Agent’s and
the Lead Arranger’s own account, such agency, arrangement and other fees as
agreed to between the Administrative Agent, the Lead Arranger and the Company.

 

SECTION 3.05.                                  Inability to Determine Interest Rate.      In
the event that the Administrative Agent shall have determined in good faith
(which determination shall be conclusive and binding upon the Company, absent
demonstrable error) that, by reason of circumstances affecting the London interbank
market, adequate and reasonable means do not exist for ascertaining the Reserve
Adjusted Eurocurrency Rate applicable pursuant to Section 3.01(b) hereof
for any requested Interest Period with respect to (a) the making of a
Eurocurrency Loan, (b) a Eurocurrency Loan that will result from the
requested conversion of a Prime Rate Loan 
into a Eurocurrency Loan, or (c) the continuation of a Eurocurrency
Loan beyond the expiration of the then current Interest Period with respect
thereto, the Administrative Agent shall forthwith give notice by telephone of
such determination, promptly confirmed in writing, to the Company and each
Lender.  Until the Administrative Agent
notifies the Company and the Lenders that the circumstances giving rise to the
suspension described herein no longer exist, the Company shall not have the
right to request or continue a Eurocurrency Loan or to convert a Prime Rate
Loan  to a Eurocurrency Loan.

 

SECTION 3.06.                                  Illegality.     Notwithstanding
any other provisions herein, if any introduction of or change in, after the
date hereof, any law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Lender to make or
maintain Eurocurrency Loans or if any Lender determines that it is unable to
make a Eurocurrency Loan in any Approved Currency because such Approved
Currency is unavailable as contemplated by this Agreement, such Lender shall
forthwith give notice by telephone of such circumstances, promptly confirmed in
writing, to the Administrative Agent, which notice the Administrative Agent
shall promptly transmit to the Company and the other Lenders and, subject to
the provisions of Section 3.09 hereof, (a) the commitment of such
Lender to make and to allow conversion to or continuations of Eurocurrency
Loans or of Eurocurrency Loans in such Approved Currency, as the case may be,
shall forthwith be cancelled for the duration of such illegality, and (b) the
Revolving Credit Loans then outstanding as Eurocurrency Loans, if any, shall be
converted automatically to Prime Rate Loans on the next succeeding last day of
each Interest Period applicable to such Eurocurrency Loans or within such
earlier period as may be required by law. 
The Company shall pay to such Lender, upon demand, any additional
amounts required to be paid pursuant to Section 3.08 hereof.

 

SECTION 3.07.                                  Increased
Costs.

 

(a)                                  In the event that any introduction of or
change in, after the date hereof, any applicable law, regulation, treaty,
order, or directive, or in the interpretation or application thereof
(including, without limitation, any request, guideline or policy, whether or
not having the force of law, of 

 

H-29

 

or from any central bank or other governmental authority, agency or
instrumentality and including, without limitation, Regulation D), by any
authority charged with the administration or interpretation thereof shall
occur, which:

 

(i)                                     shall subject any Lender or the Issuing
Lender to any Non-Excluded Taxes; or

 

(ii)                                  shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement (whether or
not having the force of law) against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of any Lender or
the Issuing Lender; or

 

(iii)                               shall impose on any Lender or the Issuing Lender any other condition;

 

and
the result of any of the foregoing is to increase the cost to such Lender or
the Issuing Lender  of making, renewing
or maintaining or participating in advances or extensions of credit hereunder
or to reduce any amount receivable hereunder, in each case by an amount which
such Lender or the Issuing Lender deems reasonably material, then, in any such
case, subject to the provisions of Section 3.10 hereof, the Company shall
pay such Lender or the Issuing Lender, such additional amount or amounts as
such Lender or the Issuing Lender shall have determined in good faith will
compensate such Lender for such increased costs or reduction.

 

(b)                                 If any Lender or the Issuing Lender shall
have determined that the adoption of, or any change in, any applicable law, rule or
regulation regarding capital adequacy, 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 the Issuing Lender (or any lending office of any Lender
or the Issuing Lender which funds Loans hereunder) or any Lender’s or the
Issuing Lender’s holding company, with any request, guideline or directive
regarding capital adequacy (whether or not having the force of the law) of any
such authority, central bank or comparable agency, in each case adopted after
the Closing Date, has or would have the effect of reducing the rate of return
on such Lender’s or the Issuing Lender’s capital or on the capital of such
Lender’s or the Issuing Lender’s holding company as a consequence of its
obligations hereunder to a level below that which such Lender or the Issuing
Lender (or such holding company) could have achieved but for such adoption,
change or compliance (taking into consideration such Lender’s or the Issuing
Lender’s policies and the policies of such Lender’s or the Issuing Lender’s
holding company with respect to capital adequacy) by an amount deemed by such
Lender or the Issuing Lender to be material, then from time to time, the
Company shall pay to such Lender or the Issuing Lender the additional amount or
amounts as 

such Lender or the Issuing Lender shall have determined will compensate such
Lender or the Issuing Lender or such Lender’s or the Issuing Lender’s holding
company for such reduction.

 

(c)                                  A certificate of a Lender setting forth the
amount or amounts payable pursuant to Sections 3.07(a) and 3.07(b) hereof
shall be conclusive and binding on the Company absent demonstrable error.  The Company shall pay such Lender or the
Issuing Lender the amount shown as due on any such certificate within fifteen
days after receipt thereof.

 

(d)                                 In the event any Lender or the Issuing Lender
shall be entitled to compensation pursuant to Section 3.07(a) or Section 3.07(b) hereof,
it shall promptly notify the Administrative Agent and the Company of the event
by reason of which it has become so entitled; provided, however, no failure on
the part of any Lender or the Issuing Lender to demand compensation under
clause (a) or clause (b) 

 

H-30

 

above on one occasion shall constitute a waiver of its right to demand
compensation on any other occasion.

 

SECTION 3.08.                                  Indemnity.   The Company agrees to indemnify each Lender
and to hold each Lender harmless from any loss, cost or expense which such
Lender may sustain or incur, including, without limitation, interest or fees
payable by such Lender to lenders of funds obtained by it in order to maintain
Eurocurrency Loans hereunder, as a consequence of (a) default by the
Company in payment of the principal amount of or interest on any Eurocurrency
Loan, (b) default by the Company to accept or make a borrowing of a
Eurocurrency Loan or a conversion into or continuation of a Eurocurrency Loan
after the Company has requested such borrowing, conversion or continuation, (c) default
by the Company in making any prepayment of any Eurocurrency Loan after the
Company gives a notice in accordance with Section 3.03 hereof and/or (d) the
making of any payment or prepayment (whether mandatory or optional) of a
Eurocurrency Loan or the making of any conversion of a Eurocurrency Loan to a
Prime Rate Loan  on a day which is not
the last day of the applicable Interest Period with respect thereto.  A certificate of a Lender setting forth such
amounts shall be conclusive and binding on the Company absent demonstrable
error.  The Company shall pay such Lender
the amount shown as due on any certificate within fifteen days after receipt
thereof.

 

SECTION 3.09.                                  Mitigation,
Obligations; Replacement of Lenders.

 

(a)                                  Each Lender agrees to use reasonable efforts
to designate an alternate Lending Office with respect to any Type of Loan
affected by the events or circumstances described in Section 3.05, Section 3.06,
Section 3.07 or Section 3.10 hereof to avoid or minimize the Company’s
liability thereunder; provided, however, that such efforts shall not cause the
imposition on such Lender of any additional cost or legal, regulatory or
administrative burdens deemed by such Lender, in its sole discretion, to be
material.

 

(b)                                 If any Lender is affected by the events or
circumstances described in Section 3.05, 3.06, 3.07 or 3.10 hereof and
requests additional compensation pursuant to the terms of this Agreement, or if
any Lender defaults in its obligation to fund Loans hereunder, then the Company
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (and in accordance with the restrictions set forth in Section 10.05
hereof), all its interests, rights, and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another
Lender, if such Lender accepts such assignment); provided, that (i) the
Company shall have received the prior written consent of the Administrative
Agent (and if a Commitment is being assigned, the Issuing Lender and the
Swingline Lender), which consent shall not be unreasonably withheld or delayed,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal amount of its Loans and participation in Swingline Loans
and Letters of Credit, accrued interest thereon, accrued fees and other amounts
payable to it hereunder from the assignee (to the extent of the outstanding
principal and accrued interest and fees) or the Company (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from
a claim for compensation pursuant to Section 3.05, 3.06 or 3.07 hereof or
payments required to be made pursuant to Section 3.10 hereof, such
assignment will result in a reduction of such compensation or payments.  A Lender shall not be required to make any
such assignment or delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Company to require
such assignment and delegations cease to apply.

 

H-31

 

SECTION 3.10.                                  Taxes.

 

(a)                                  Except as set forth in clause (d) below
or as required by law, all payments made by the Company under this Agreement
shall be made free and clear of, and without reduction for or on account of,
any present or future taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding (i) income, branch profits and
franchise taxes (imposed in lieu of income taxes) imposed on the Administrative
Agent, the Issuing Lender or a Lender as a result of a present, former or
future connection between the jurisdiction of the government or the taxing
authority imposing such tax and the Administrative Agent, the Issuing Lender or
a Lender or the lending office of the Administrative Agent, the Issuing Lender
or a Lender (excluding a connection arising solely from the Administrative
Agent, the Issuing Lender or a Lender having executed this Agreement, the Notes
or the other Loan Documents) or any political subdivision or taxing authority
thereof or therein, and (ii) taxes (including withholding taxes) imposed
by reason of the failure of the Administrative Agent, the Issuing Lender or a
Lender, if organized outside of the United States, to comply with Section 3.10(c) hereof
(or the inaccuracy at any time of the certificates, documents or other evidence
delivered thereunder) (such non-excluded taxes being called “Non-Excluded
Taxes”).  If any Non-Excluded Taxes
are required to be withheld from any amounts payable to the Administrative
Agent, the Issuing Lender or any Lender hereunder, or under the Notes, the amount
so payable to the Administrative Agent, the Issuing Lender or such Lender shall
be increased to the extent necessary to yield to the Administrative Agent, the
Issuing Lender or such Lender (after payment of all Non-Excluded Taxes, and
free and clear of all liability in respect of such Non-Excluded Taxes) interest
or any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement and the Notes provided, however, that
the Company shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to
such Lender’s failure to comply with the requirements of Section 3.09
hereof, (ii) that are United States withholding taxes imposed (or branch
profits taxes imposed in lieu thereof) on amounts payable to such Lender at the
time such Lender becomes a party to this Agreement, except to the extent that
such Lender’s assignor (if any) was entitled, at the time of assignment, to
receive additional amounts from the Company with respect to such Non-Excluded
Taxes pursuant to this Section 3.10(a), or (iii) that are imposed as
a result of any event occurring after such Lender becomes a Lender other than a
change in law or regulation or the introduction of any law or regulation or a
change in interpretation or administration of any law. Whenever any
Non-Excluded Taxes are payable by the Company, as promptly as possible
thereafter, the Company shall send to the Administrative Agent for its own
account or for the account of the Issuing Lender or such Lender, as the case
may be, a certified copy of an original official receipt showing payment
thereof.  If the Company fails to pay
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Company shall indemnify the Administrative Agent, the
Issuing Lender and the Lenders for any incremental taxes, interest or penalties
that may become payable by the Administrative Agent, the Issuing Lender or such
Lender as a result of any such failure together with any expenses payable by
the Administrative Agent, the Issuing Lender or such Lender in connection
therewith; provided that the Administrative Agent, Issuing Lender or such
Lender has provided the Company with notice thereof as required by Section 10.01
hereof, accompanied by a demand for payment.

 

(b)                                 If a Lender or the Administrative Agent
becomes aware that it is entitled to claim a refund from a governmental authority
in respect of any Non-Excluded Taxes as to which it has been indemnified by the
Company or with respect to which the Company has paid additional amounts
pursuant to this Section 3.10, it promptly shall notify the Company in
writing of the availability of such refund claim and shall make a timely claim
to such taxation authority for such refund at the Company’s expense.  If a Lender or the Administrative Agent
receives a refund (including pursuant to a claim for refund made pursuant to
the preceding sentence) or a permanent net tax benefit in respect of any
Non-Excluded Taxes 

 

H-32

 

as to which it has been indemnified by the Company or with respect to
which the Company has paid additional amounts pursuant to this Section 3.10,
it shall within 30 days from the date of such receipt pay over the amount of
such refund or permanent net tax benefit to the Company, net of all reasonable
out-of-pocket expenses of such Lender or the Administrative Agent and without interest
(other than interest paid by the relevant taxation authority with respect to
such refund); provided that the Company, upon the request of such Lender or the
Administrative Agent, agrees to repay the amount paid over to the Company (plus
penalties, interest or other reasonable charges) to such Lender or the
Administrative Agent  in the event such
Lender or the Administrative Agent is required to repay such refund to such
taxation authority or loses such net tax benefit.

 

(c)                                  On or before the date on which it becomes a
party to this Agreement, each Lender that is not organized under the laws of
the United States or a state thereof agrees that it will deliver to the Company
and the Administrative Agent, as applicable: (i) two duly completed copies
of United States Internal Revenue Service Form W-8BEN, or successor
applicable form, certifying in each case under an applicable treaty that such
Lender is entitled to receive all payments under this Agreement without
deduction or withholding of any United States federal income taxes, (ii) two
duly completed copies of United States Internal Revenue Service Form W-8ECI,
or successor applicable form, or (iii) two duly completed copies of United
States Internal Revenue Service Form W-8BEN, or successor applicable form,
and a statement in the form of Exhibit H hereto.  Each Lender which delivers to the Company and
the Administrative Agent a Form W-8BEN or W-8ECI pursuant to the preceding
sentence further undertakes to deliver to the Administrative Agent two further copies
of the said statement and Form W-8BEN or W-8ECI, or successor applicable
forms, and, if applicable, the statement, or other manner of certification, as
the case may be, on or before the date that any such statement or form expires
or becomes obsolete or after the occurrence of any event requiring a change in
the most recent statement or form previously delivered by it to the
Administrative Agent, and such extensions or renewals thereof as may be
requested by the Administrative Agent, certifying that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of
any United States federal income taxes. Each Lender shall promptly notify the
Company and the Administrative Agent at any time it determines that it is no longer
in a position to provide any previously delivered above-mentioned form or
statement (or successor thereto) to the Company and the Administrative Agent.

 

(d)                                 For any period with respect to which a Lender
required to do so has failed to provide the Company with the appropriate form
described in Section 3.10(c) above (other than if such failure is due
to a change in law occurring subsequent to the date on which a form originally
was required to be provided, or if such form otherwise is not required under Section 3.10(c) above),
such Lender shall not be entitled to indemnification under this Section 3.10  with respect to Non-Excluded Taxes imposed by
reason of such failure; provided, however, that should a Lender
become subject to Non-Excluded Taxes because of its failure to deliver a form
required hereunder, the Company shall take such steps as such Lender reasonably
shall request to assist such Lender in recovering such Non-Excluded Taxes.

 

SECTION 3.11.                                  Pro Rata Treatment and Payments.  Each borrowing by the Company from the
Lenders, each conversion of a Revolving Credit Loan pursuant to Section 3.01(d) hereof
or continuation of a Revolving Credit Loan pursuant to Section 3.01(e) hereof,
each payment by the Company on account of any fee (other than with respect to
fees which are expressly payable to the Administrative Agent or the Issuing
Lender for its own account), and any reduction of the Commitments of the
Lenders hereunder shall be made pro  rata according to the
respective relevant Commitment Proportions of the Lenders.  Each payment (including each prepayment) by
the Company on account of principal of and interest on each Loan shall be made
in the Applicable Currency in which such Loan is denominated and shall be made pro
rata according to the respective outstanding principal amounts of such 

 

H-33

 

Loans held by each Lender. 
Except as otherwise provided in Section 2.04 hereof, all payments
by the Company on account of principal of and interest on any Swingline Loan
shall be made to the Swingline Lender at its office specified on its signature page hereof
in Dollars in immediately available funds. 
All payments (including prepayments) to be made by the Company on
account of principal, interest, fees and reimbursement obligations shall be
made without set-off or counterclaim and, with respect to payments of the
Loans, shall be made to the Administrative Agent, for the account of the
Lenders (except as specified above), at the Payment Office, in Dollars or the
other Applicable Currency, in immediately available funds.  The Administrative Agent shall distribute
such payments with respect to Loans to the Lenders promptly upon receipt in
like funds by wire transfer of each Lender’s portion of such payment to such
Lender for the account of its Lending Office. 
The Administrative Agent may, in its sole discretion, directly charge
principal and interest payments due in respect of the Loans to the Company’s
accounts at the Payment Office or any other office of the Administrative
Agent.  The Issuing Lender may, in its
sole discretion, directly charge reimbursement obligations with respect to
Letters of Credit to the Company’s accounts at any office of the Issuing
Lender.  Except as otherwise provided in
the definition of “Interest Period”, if any payment hereunder becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.

 

SECTION 3.12.                                  Funding
and Disbursement of Loans.

 

(a)                                  Each Lender shall make each Revolving Credit
Loan denominated in Dollars to be made by it hereunder, at the Payment Office
for the account of such office and the Administrative Agent, on the applicable
Borrowing Date, in immediately available funds, by 2:00 p.m. (New York,
New York time).  Each Lender shall make
each Revolving Credit Loan denominated in an Approved Currency other than
Dollars to be made by it hereunder, at the Payment Office for the account of
such office and the Administrative Agent, on the applicable Borrowing Date, in
immediately available funds, by the Applicable Offshore Time. Unless any
applicable condition specified in Article V hereof has not been satisfied,
the amount so received by the Administrative Agent will be made available to
the Company at such Payment Office by crediting the account of the Company with
such amount and in like funds as received by the Administrative Agent; provided,
however, that if the proceeds of any Revolving Credit Loan or Swingline Loan or
any portion thereof are to be used to prepay outstanding Revolving Credit
Loans, Swingline Loans or Letter of Credit obligations, then the Administrative
Agent shall apply such proceeds for such purpose to the extent necessary and
credit the balance, if any, to the Company’s account.

 

(b)                                 Unless the Administrative Agent shall have
been notified in writing by any Lender prior to a proposed Borrowing Date that
such Lender will not make the amount which would constitute its Commitment
Proportion of the borrowing on such Borrowing Date available to the
Administrative Agent, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such Borrowing Date,
and the Administrative Agent may, in reliance upon such assumption, make
available to the Company a corresponding amount.  If such amount is not made available to the
Administrative Agent until a date after such Borrowing Date, such Lender shall
pay to the Administrative Agent on demand interest on such Lender’s Commitment
Proportion of such borrowing at a rate equal to the greater of (i) the
daily average Federal Funds Rate and (ii) a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation during such period, from and including such Borrowing
Date to the date on which such Lender’s Commitment Proportion of such borrowing
shall have become immediately available to the Administrative Agent.  A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts due pursuant to this Section 3.12(b) shall
be conclusive absent demonstrable error. 
Nothing

 

H-34

 

herein shall be deemed to relieve any Lender from its obligations to
fulfill its commitment hereunder or to prejudice any right which the Company
may have against any Lender as a result of any default by such Lender
hereunder.

 

SECTION 3.13.                                  Judgment
Currency.  The currency in which
each Loan made hereunder is denominated and the place of payment designated
therefor is of the essence.  The payment
obligation of the Company hereunder in any designated currency and designated
place of payment shall not be discharged by an amount paid in another currency
or in another place, whether pursuant to a judgment or otherwise, to the extent
that the amount so paid on prompt conversion to the currency in which such Loan
is denominated and transfer to the designated place of payment under normal
banking procedures does not yield the amount owing hereunder at the designated
place of payment.  In the event that any
payment by the Company, whether pursuant to a judgment or otherwise, upon such
conversion and transfer, does not result in payment of such amount in the
currency in which such Loan is denominated at the designated place of payment,
the Administrative Agent on behalf of the Lenders shall be entitled to demand
immediate payment of, and shall have a separate cause of action against the
Company for, the additional amount necessary to yield the amount of such
currency owing hereunder.

 

SECTION 3.14.                                  Foreign
Exchange Indemnity.  If any sum
due from the Company or any Guarantor under this Agreement or any order or
judgment given or made in relation hereto has to be converted from the currency
(the “first currency”) in which the same is payable hereunder or under such
order or judgment into another currency (the “second currency”) for the purpose
of (a) making or filing a claim or proof against the Company or any
Guarantor with any Governmental Authority or in any court or tribunal or (b) enforcing
any order or judgment given or made in relation hereto, the Company or any
Guarantor, as the case may be, shall indemnify and hold harmless each of the
Persons to whom such sum is due from and against any loss actually suffered as
a result of any discrepancy between (i) the rate of exchange used to
convert the amount in question from the first currency into the second
currency, and (ii) the rate or rates of exchange at which such Person,
acting in good faith, purchased the first currency with the second currency
after receipt of a sum paid to it in the second currency in satisfaction, in
whole or in part, of any such order, judgment, claim or proof.  The foregoing indemnity shall constitute a
separate obligation of the Company or any Guarantor distinct from its other
obligations hereunder and shall survive the giving or making of any judgment or
order in relation to all or any of such other obligations.

 

SECTION 3.15.                                  Further
Modifications.  The
Administrative Agent may, from time to time, further modify the terms of, and
practices contemplated by, this Agreement with respect to the Euro to the
extent the Administrative Agent determines, in its reasonable discretion, that
such modifications are necessary or convenient to reflect new laws,
regulations, customs, or practices developed in connection with the Euro.  The Administrative Agent may effect such
modifications, and this Agreement shall be deemed so amended, without the
consent of the Company or the Lenders to the extent such modifications are not
materially disadvantageous to the Company and the Lenders, upon notice thereto.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

In
order to induce the Lenders to enter into this Agreement and to make the Loans
and other extensions of credit herein provided for, the Company represents and
warrants to the Administrative Agent and each Lender that:

 

SECTION 4.01.                                  Organization, Powers.  The
Company and each Guarantor (a) is a 

 

H-35

 

corporation, limited liability company, partnership or other legal
entity (as indicated on Schedule 4.11 hereto) duly organized or formed,
validly existing and in good standing under the laws of the jurisdiction of its
formation, (b) has the corporate, limited liability company, partnership
or such other power and authority to own its properties and to carry on its
business as being conducted, (c) is duly qualified to do business in every
jurisdiction wherein the conduct of its business or the ownership of its
properties are such as to require such qualification except those jurisdictions
in which the failure to be so qualified could not reasonably be expected to have
a Material Adverse Effect, and (d) has the corporate, limited liability
company, partnership or other power to execute, deliver and perform each of the
Loan Documents to which it is a party, including, without limitation, with
respect to the Company, the power to obtain extensions of credit hereunder and
to execute and deliver the Notes.  Each
other Subsidiary of the Company which is not a Guarantor (a) is a
corporation, limited liability company, partnership or other legal entity (as
indicated on Schedule 4.11 hereto) duly organized or formed, as
applicable, validly existing and,  in
good standing under the laws of the jurisdiction of its formation, (b) has
the corporate, limited liability company, partnership or other legal power and
authority to own or lease its properties and to carry on its business as being
conducted on the Closing Date and, (c) is duly qualified to do business in
every jurisdiction wherein the conduct of its business or the ownership of its
properties are such as to require such qualification, except in those
jurisdictions where the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect.

 

SECTION 4.02.                                  Authorization of Borrowing, Enforceable
Obligations.      The execution,
delivery and performance by the Company of this Agreement, and the other Loan
Documents to which it is a party, the borrowings and the other extensions of
credit to the Company hereunder, and the execution, delivery and performance by
each Guarantor of the Loan Documents to which such Guarantor is a party, (a) have
been duly authorized by all requisite corporate, limited partnership or limited
liability company action, (b) will not violate or require any consent
(other than consents as have been made or obtained and which are in full force
and effect) under (i) any provision of law applicable to the Company or
any Guarantor, any applicable rule or regulation of any Governmental
Authority, or the Certificate of Incorporation or By-laws of the Company or the
Certificate of Incorporation, By-Laws, or other organizational documents, as
applicable, of any Guarantor or (ii) any order of any court or other
Governmental Authority binding on the Company or any Guarantor, (c) will
not be in conflict with, result in a breach of or constitute (with due notice
and/or lapse of time) a default under, any indenture, agreement or other
instrument to which the Company or any Guarantor is a party, or by which the
Company or any Guarantor or any of its property is bound, which conflict,
breach or default could reasonably be expected to have a Material Adverse
Effect, or result in the creation or imposition of any Lien of any nature
whatsoever upon any of the property or assets of the Company or any Guarantor
other than as contemplated by this Agreement or the other Loan Documents.  This Agreement and each other Loan Document
to which the Company or any Guarantor is a party constitutes a legal, valid and
binding obligation of the Company and such Guarantor, as the case may be,
enforceable against the Company and each such Guarantor, as the case may be, in
accordance with its terms except to the extent that enforcement may be limited
by applicable bankruptcy, reorganization, moratorium, insolvency and similar
laws affecting creditors’ rights generally or by equitable principles of
general application, regardless of whether considered in a proceeding in equity
or at law.

 

SECTION 4.03.                                  Financial
Condition.

 

(a)                                  The Company has heretofore furnished to each
Lender the audited consolidated balance sheets, statements of income, retained
earnings and cash flow of the Company and its 
Subsidiaries, audited by Ernst & Young LLP, independent
certified public accountants, as of and for the fiscal year ended December 31,
2003.  Such financial statements were
prepared in conformity with 

 

H-36

 

Generally Accepted Accounting Principles, applied on a consistent
basis, and fairly present the consolidated financial condition and consolidated
results of operations of the Company and its Subsidiaries as of the date of
such financial statements and for the periods to which they relate and since December 31,
2003 (the “Determination Date”), no Material Adverse Effect has occurred,
except as set forth on Schedule 5.01(j). 
Other than obligations and liabilities arising in the ordinary course of
business since the Determination Date, there are no obligations or liabilities
contingent or otherwise, of the Company or any of its Subsidiaries which are
not reflected or disclosed on such audited statements other than obligations or
liabilities of the Company and its Subsidiaries which are not required to be so
disclosed.  Notwithstanding anything to
the contrary herein, on the date of delivery of any financial statements
pursuant to Section 6.03(a) hereof, the Determination Date shall be
deemed to be the date of the prior year’s audited financial statements.

 

(b)                                 Each of the Company and each Guarantor is
Solvent.

 

SECTION 4.04.                                  Taxes.  Each of the Company and each Subsidiary of
the Company has filed or has caused to be filed all tax returns (foreign,
federal, state and local) required to be filed (including, without limitation,
with respect to payroll and sales taxes) and each of the Company and each
Subsidiary of the Company has paid all taxes (including, without limitation,
all payroll and sales taxes), assessments and governmental charges and levies
shown thereon to be due, including interest and penalties except (a) where
the failure to file such tax returns or pay such taxes, charges or levies could
not reasonably be expected to have a Material Adverse Effect and (b) taxes,
assessments and governmental charges and levies being contested in good faith
by appropriate proceedings and with respect to which adequate reserves in
conformity with Generally Accepted Accounting Principles applied on a
consistent basis shall have been provided on the books of the Company and its
Subsidiaries.

 

SECTION 4.05.                                  Title to Properties.  Each of the Company and each Subsidiary of
the Company has good title to its respective properties and assets reflected on
the financial statements referred to in Section 4.03 hereof, except for
such properties and assets as have been disposed of since the date of such
financial statements as no longer used or useful in the conduct of their
respective businesses or as have been disposed of in the ordinary course of
business or as permitted pursuant to Section 7.04(b) hereof, and all
such properties and assets are free and clear of all Liens other than Permitted
Liens.

 

SECTION 4.06.                                  Litigation.  (a) Except as set forth on Schedule 4.06,
there are no actions, suits or proceedings (whether or not purportedly on
behalf of the Company or any Subsidiary of the Company) pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
such Subsidiary at law or in equity or before or by any Governmental Authority,
which involve any of the transactions contemplated herein or which could
reasonably be expected to result in a Material Adverse Effect; and (b) neither
the Company nor any Subsidiary of the Company is in default with respect to any
judgment, writ, injunction, decree, rule or regulation of any Governmental
Authority which could reasonably be expected to result in a Material Adverse
Effect.

 

SECTION 4.07.                                  Agreements.  Neither the Company nor any
Subsidiary of the Company is a party to any agreement, indenture, loan or
credit agreement or any lease or other agreement or instrument or subject to
any judgment, order, writ, injunction, decree or regulation which could
reasonably be expected to have a Material Adverse Effect.  Neither the Company nor any Subsidiary of the
Company is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party, which default could reasonably be expected
to have a Material Adverse Effect.

 

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SECTION 4.08.                                  Compliance
with ERISA.  Each Plan is in
compliance in all material respects with ERISA; no Plan is insolvent or in
reorganization (as defined in Section 4241 of ERISA), no Plan has an
Unfunded Current Liability which could reasonably be expected to have a
Material Adverse Effect or to result in the imposition of any Lien, and no Plan
has an accumulated or waived funding deficiency within the meaning of Section 412
of the Code; neither the Company nor any ERISA Affiliate has incurred any
material liability to or on account of a Plan pursuant to Section 515,
4062, 4063, 4064, 4201 or 4204 of ERISA or reasonably expects to incur any
material liability under any of the foregoing Sections on account of the prior
termination of participation in or contributions to any such Plan; no
proceedings have been instituted to terminate any Plan which could reasonably
be expected to have a Material Adverse Effect or to result in the imposition of
any Lien; no condition exists which could reasonably be expected to present a
risk to the Company or any ERISA Affiliate of incurring a liability to or on
account of a Plan pursuant to the foregoing provisions of ERISA and the Code;
and no lien imposed under the Code or ERISA on the assets of the Company or any
of its ERISA Affiliates exists or to the knowledge of the Company is likely to
arise on account of any Plan.

 

SECTION 4.09.                                  Federal
Reserve Regulations; Use of Proceeds.

 

(a)                                  Neither the Company nor any Subsidiary of the
Company is engaged principally in, nor has as one of its important activities,
the business of extending, maintaining or arranging credit for the purpose of
purchasing or carrying any “margin stock” (within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System of the United States,
as amended from time to time).

 

(b)                                 No part of the proceeds of any Loan and no
other extension of credit hereunder will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to
purchase or to carry margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock, or to refund indebtedness originally
incurred for such purposes, or (ii) for any purpose which violates or is
inconsistent with the provisions of Regulation T, U, or X of the Board of
Governors of the Federal Reserve System.

 

(c)                                  The proceeds of each Loan, and each other
extension of credit hereunder, shall be used solely for the purposes permitted
under Section 3.02 hereof.

 

SECTION 4.10.                                  Approvals.  No registration with or consent or approval
of, or other action by, any Governmental Authority or any other Person is
required in connection with the execution, delivery and performance of this
Agreement by the Company or any Guarantor, or with the execution, delivery and
performance of other Loan Documents to which it is a party or, with respect to
the Company, the borrowings and each other extension of credit hereunder other
than registrations, consents and approvals received prior to the date hereof
and disclosed to the Lenders and which are in full force and effect or such
registrations, consents and approvals required pursuant to Section 5.01
hereof.

 

SECTION 4.11.                                  Subsidiaries
and Affiliates.  Attached hereto
as Schedule 4.11 is a correct and complete list of each of the Company’s
Subsidiaries and Affiliates as of the Closing Date showing as to each (a) Subsidiary,
its name, the jurisdiction of its incorporation or formation, its shareholders
or other owners of an interest in each Subsidiary and the number of outstanding
shares or other ownership interest owned by each shareholder or other owner of
an interest and (b) Affiliate in which the Company or any of its
Subsidiaries owns an interest, the number of shares or other ownership
interests of such Affiliate owned directly or indirectly by the Company.

 

SECTION 4.12.                                  Hazardous Materials.   The
Company and each Subsidiary are in 

 

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compliance in all material respects with all applicable Environmental
Laws and neither the Company nor any Subsidiary has used Hazardous Materials
on, from, or affecting any property now owned or occupied or hereafter owned or
occupied by the Company or any such Subsidiary in any manner which violates any
applicable Environmental Law. To the best actual knowledge of any officer of
the Company, no prior owner of any such property or any tenant, subtenant,
prior tenant or prior subtenant has used Hazardous Materials on, from, or
affecting such property in any manner which violates, in any material respect,
any applicable Environmental Law.

 

SECTION 4.13.                                  Investment Company Act.  Neither the Company nor any Subsidiary of the
Company is an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended.

 

SECTION 4.14.                                  No Default.  No Default or Event of Default has occurred
and is continuing.

 

SECTION 4.15.                                  Credit
Arrangements.  Schedule 4.15
attached hereto is a complete and correct list of all credit agreements,
indentures, purchase agreements (other than purchase orders), guaranties, Capital
Leases and other investments, agreements and arrangements in effect on the
Closing Date providing for or relating to extensions of credit to the Company
or any Subsidiaries of the Company, or any of them (including agreements and
arrangements for the issuance of letters of credit or for acceptance financing)
in respect of which the Company or any Subsidiaries of the Company, or any of
them, are in any manner directly or contingently obligated to make aggregate
payments of $1,000,000 or more; and the maximum principal or face amounts of
the credit in question, outstanding and which can be outstanding, are correctly
stated, and all Liens of any nature given or agreed to be given as security
therefor are correctly described or indicated in such Schedule 4.15.

 

SECTION 4.16.                                  Permits
and Licenses.  Each of the
Company and each Subsidiary of the Company has all permits, licenses,
certifications, authorizations and approvals required for it lawfully to own
and operate their respective businesses except those the failure of which to
have could not reasonably be expected to have a Material Adverse Effect.

 

SECTION 4.17.                                  Compliance
with Law.   The Company and each Subsidiary of the Company
are each in compliance with all laws, rules, regulations, orders and decrees
which are applicable to the Company or any such Subsidiary, or to any of their
respective properties, which the failure to comply with could reasonably be
expected to have a Material Adverse Effect.

 

SECTION 4.18.                                  Disclosure.  Neither this Agreement, any other Loan
Document, nor any other document, certificate or written statement furnished to
the Administrative Agent, the Issuing Lender, or any Lender by or on behalf of
the Company or any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which they were made.

 

SECTION 4.19.                                  Labor
Disputes and Acts of God.  Neither
the business nor the properties of the Company or any Subsidiary of the Company
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), which could
reasonably be expected to have a Material Adverse Effect.

 

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SECTION 4.20.                                  Pledge
Agreements.  Each Pledge
Agreement executed by the Company and the Guarantors shall constitute a valid
and continuing lien on and security interest in the Pledged Interests (as
defined in such Pledge Agreement) referred to in such Pledge Agreement to the
extent provided therein and under applicable law in favor of the Administrative
Agent for the ratable benefit of the Lenders, prior to all Liens, other than
Permitted Liens.

 

ARTICLE V

CONDITIONS OF LENDING

 

SECTION 5.01.                                  Conditions to Initial Extension of Credit.  The obligation of each Lender to make its
initial Loan hereunder, and the obligation of the Issuing Lender to issue the
initial Letter of Credit, are subject to the following conditions precedent:

 

(a)                                  Notes.  On or
prior to the Closing Date, the Administrative Agent shall have received (i) for
the account of each Lender (other than the Issuing Lender and the Swingline
Lender), a Revolving Credit Note and (ii) for the account of the Swingline
Lender, a Swingline Note, each duly executed by the Company.

 

(b)                                 Guaranties.  On or prior to the Closing Date, the
Administrative Agent shall have received, with a counterpart for each Lender, a
Guaranty duly executed by each Guarantor.

 

(c)                                  Pledge Agreements.  On or prior to the Closing Date, the
Administrative Agent shall have received the Pledge Agreements duly executed by
the Company and Guarantors, as applicable, together with all stock
certificates, if any, evidencing the shares pledged under the Pledge Agreements
and undated stock powers duly executed in blank by the Company or the
Guarantors and UCC-1 financing statements required pursuant to the Pledge
Agreements, as appropriate.

 

(d)                                 Opinion of Counsel.  On or prior to the Closing Date, the
Administrative Agent shall have received a written opinion of Kaye Scholer, LLP
substantially in the form of Exhibit G attached hereto.

 

(e)                                  Supporting Documents.  On or prior to the Closing
Date, the Administrative Agent shall have received (i) a certificate of
good standing for the Company and each Guarantor from the secretary of state of
the states of their organizational jurisdiction dated as of a recent date; (ii) copies
of the Certificate of Incorporation and By-laws or other organization
documents, as applicable of the Company and each Guarantor, certified by the
Secretary or an Assistant Secretary of such entity; and (iii) a
certificate of the Secretary or an Assistant Secretary of the Company and each
Guarantor dated the Closing Date and certifying:  (x) that neither the Certificates of
Incorporation, the By-laws nor any other applicable organizational documents of
the Company or any Guarantor has been amended since the date of their
certification (or if there has been any such amendment, attaching a certified
copy thereof); (y) that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors of the Company and by the board
of directors or other governing body or Persons of each Guarantor authorizing
the execution, delivery and performance of each Loan Document to which it is a
party; and (z) the incumbency and specimen signature of each officer of the
Company and of each officer or other authorized Person of each Guarantor
executing each Loan Document to which the Company or any Guarantor is a party
and a certification by another officer of the Company and each Guarantor as to
the incumbency and signature of the Secretary or Assistant Secretary of the
Company and each Guarantor.

 

(f)                                    Insurance.  On or
prior to the Closing Date, the Administrative Agent shall have 

 

H-40

 

received a certificate or certificates of insurance from an independent
insurance broker or brokers or other evidence confirming the insurance required
to be maintained by the Company and its Domestic Subsidiaries pursuant to Section 6.01
hereof.

 

(g)                                 Fees and Expenses.  On or prior to the Closing Date, the Lenders
shall have received all fees that may be payable to them pursuant to this
Agreement and reimbursement of expenses in accordance with Section 10.03(b) hereof.

 

(h)                                 No Litigation.  Except as set forth on Schedule 4.06,
there shall exist no action, suit, investigation, litigation or proceeding
affecting the Company or any of its Subsidiaries pending or, to the knowledge
of the Company, threatened before any court, governmental agency or arbiter
that could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

(i)                                     Consents and Approvals.  All
governmental and third party consents and approvals necessary in connection
with the transactions contemplated by this Agreement and the other Loan
Documents shall have been obtained (without the imposition of any conditions
that are not reasonably acceptable to the Required Lenders) and shall remain in
effect, and no law or regulation shall be applicable in the reasonable judgment
of the Required Lenders that imposes materially adverse conditions upon the
transactions contemplated hereby.

 

(j)                                     No Material Adverse Effect.  
Except as set forth on Schedule 5.01(j) attached hereto, there
shall not have occurred any Material Adverse Effect in the business,
operations, properties or condition (financial or otherwise) of the Company and
its Subsidiaries or the Company and the Guarantors, taken as a whole, since December 31,
2003.

 

(k)                                  Existing Indebtedness.  The Administrative Agent shall
have received concurrently with the extension of the initial Loans described
herein evidence that the Existing Indebtedness has been paid in full and that
the agreements giving rise to such Existing Indebtedness have been terminated.

 

(l)                                     Other Information,
Documentation.  The Administrative Agent and the Lenders
shall have received such other and further information and documentation as any
of them may reasonably require.

 

(m)                               Completion of Proceedings.  All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by the Loan Documents, shall be
reasonably satisfactory in form and substance to the Administrative Agent, the
Lenders and their counsel.

 

SECTION 5.02.                                  Conditions to Extensions of Credit.  The obligation of each Lender to make each
Loan hereunder and the obligation of the Issuing Lender to issue, amend, renew
or extend any Letter of Credit, including, without limitation, the initial Loan
and initial Letter of Credit, are further subject to the following conditions
precedent:

 

(a)                                  Representations and Warranties.  The representations and
warranties by the Company and each Guarantor pursuant to this Agreement and the
other Loan Documents to which each is a party shall be true and correct in all
material respects on and as of the Borrowing Date or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, with
the same effect as though such representations and warranties had been made on
and as of such date unless such 

 

H-41

 

representation is as of a specific date, in which case, as of such
date.

 

(b)                                 No Default.  No Default or Event of Default shall have
occurred and be continuing on the Borrowing Date or on the date of issuance,
amendment, renewal or extension of a Letter of Credit or will result after
giving effect to the Loan requested or the requested issuance, amendment,
renewal or extension of a Letter of Credit.

 

(c)                                  Letter of Credit Documentation.  With respect to the issuance,
amendment, renewal or extension of any Letter of Credit, the Issuing Lender
shall have received the documents and instruments requested by the Issuing
Lender in accordance with the last sentence of Section 2.03(a) hereof.

 

Each
borrowing hereunder and each issuance, amendment, renewal or extension of a
Letter of Credit shall constitute a representation and warranty of the Company
that the statements contained in clauses (a), (b), and (c) of this Section 5.02
are true and correct on and as of the Borrowing Date or as of the date of
issuance, amendment, renewal or extension of a Letter of Credit, as applicable,
as though such representation and warranty had been made on and as of such date.

 

ARTICLE VI

AFFIRMATIVE COVENANTS

 

The
Company covenants and agrees with the Lenders that so long as the Commitments
remain in effect, or any of the principal of or interest on the Notes or any
other Obligations hereunder shall be unpaid it will, and will cause each of its
Subsidiaries to:

 

SECTION 6.01.                                  Existence, Properties, Insurance. 
Except to the extent permitted by Section 7.12 hereof, do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate, partnership, limited liability company, or other form of
organization, as applicable (except as set forth on Schedule 6.01 hereto),
existence (other than as expressly permitted herein) and comply, in all
material respects, with all laws applicable to it; at all times maintain,
preserve, protect or renew all trade names, patents, trademarks and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect and preserve all of its property, in each case,
material to its business and keep the same in good repair, working order and
condition (normal wear and tear excepted) and from time to time make, or cause
to be made, all needful and proper repairs, renewals, replacements, betterments
and improvements thereto so that the business carried on in connection
therewith may be properly and advantageously conducted in the ordinary course
at all times in the manner and custom of similar businesses; at all times,
preserve and maintain in full force and effect all rights (including
governmental rights), privileges, qualifications, permits, licenses and
franchises necessary for the normal conduct of its business; and at all times
maintain insurance covering its assets and its business with financially sound
and reputable insurance companies or associations in such amounts and against
such risks (including, without limitation, hazard, business interruption,
public liability and product liability) as are usually carried by companies
engaged in the same or similar business.

 

SECTION 6.02.                                  Payment
of Indebtedness and Taxes. (a) Pay all material indebtedness and
obligations, now existing or hereafter arising, as and when due and payable
except where (i) the validity, amount, or timing thereof is being
contested in good faith and by appropriate proceedings, which proceedings shall
include good faith negotiations, and (ii) the Company or any Subsidiary of
the Company has set aside on its books adequate reserves with respect thereto
in accordance with Generally 

 

H-42

 

Accepted Accounting Principles, and (iii) the failure to make such
payment pending such contest could not reasonably be expected to have a
Material Adverse Effect, and (b) pay and discharge or cause to be paid and
discharged promptly all taxes, assessments and government charges or levies
imposed upon it or upon its income and profits, or upon any of its property,
real, personal or mixed, or upon any part thereof, as and when due and payable,
as well as all lawful claims for labor, materials and supplies or otherwise
which, if unpaid, might become a lien or charge upon such properties or any
part thereof, except where the failure to make such payment could not
reasonably be expected to have a Material Adverse Effect; provided, however,
that neither the Company nor any Subsidiary of the Company shall be required to
pay and discharge or cause to be paid and discharged any such tax, assessment,
charge, levy or claim so long as the validity thereof shall be contested in
good faith by appropriate proceedings, and the Company or such Subsidiary, as
the case may be, shall have set aside on its books adequate reserves determined
in accordance with Generally Accepted Accounting Principles with respect to any
such tax, assessment, charge, levy or claim so contested; further,  provided
that, subject to the foregoing proviso, the Company and each Subsidiary of the
Company will pay or cause to be paid all such taxes, assessments, charges,
levies or claims upon the commencement of proceedings to foreclose any lien
which has attached as security therefor.

 

SECTION 6.03.                                  Financial
Statements, Reports, etc. 
Furnish to the Administrative Agent (with sufficient copies for each
Lender):

 

(a)                                  within ninety (90) days of the end of each
fiscal year of the Company, or such earlier date on which the following is
required to be filed with the Securities and Exchange Commission, audited
consolidated financial statements of the Company and its Subsidiaries which
shall include consolidated balance sheets of the Company and its Subsidiaries
as of the end of such fiscal year, together with consolidated income statements
and statements of cash flows for the Company and its Subsidiaries for such
fiscal year and as of and for the prior fiscal year, all prepared in accordance
with Generally Accepted Accounting Principles and accompanied by an opinion
thereon of Ernst & Young, LLP or other nationally recognized
independent certified public accountants reasonably acceptable to the Lenders
(the “Auditor”) which opinion shall not include a going concern or like
qualification or exception or a qualification or exception as to the scope of
the audit (except with respect to any newly acquired Subsidiary), together with
the corresponding consolidating balance sheets of the Company and its
Subsidiaries and the consolidating statements of income for the Company and its
Subsidiaries, all prepared under the supervision of the Chief Financial Officer
of the Company in accordance with Generally Accepted Accounting Principles;

 

(b)                                 within forty-five (45) days after the end of
each of the first, second and third fiscal quarters of each fiscal year of the
Company, unaudited consolidated and consolidating financial statements of the
Company and its Subsidiaries, which shall include unaudited consolidated and
consolidating balance sheets of the Company and its Subsidiaries as of the end
of each such quarter, together with consolidated and consolidating income
statements and consolidated statements of cash flows of the Company and its
Subsidiaries for each such quarter and for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter, all in
reasonable detail stating in comparative form the respective figures for the
corresponding date and period in the previous fiscal year, all prepared by or
under the supervision of the Chief Financial Officer of the Company in
accordance with Generally Accepted Accounting Principles (subject to year-end
adjustments and except for the absence of notes thereto);

 

(c)                                  (i) a certificate prepared and signed by
the Auditor with each delivery required by clause (a), and (ii) a
certificate prepared and signed by the Chief Financial Officer with each
delivery 

 

H-43

 

required by clauses (a) and (b), stating whether the Auditor or
Chief Financial Officer, as the case may be, shall have obtained knowledge of
any Default or Event of Default, together with a certificate of the Chief
Financial Officer of the Company demonstrating that as of the last day of the
relevant fiscal year or quarter, as applicable, the Company was in compliance
with the financial condition covenants set forth in Section 7.13 hereof, provided
that the certificate described in subclause (i) above for the fiscal year
ended December 31, 2004 shall be delivered by no later than March 31,
2005;

 

(d)                                 together with delivery of the statements
referred to in clause (a) above, a copy of 
the management letter, if any, prepared by the Auditor, or if such
management letter has not been received by the Company as of such date,
promptly upon receipt thereof;

 

(e)                                  together with delivery of the statements
referred to in clauses (a) and (b) above, a certificate of the Chief
Financial Officer indicating the “book-to-bill” ratio at the end of such fiscal
quarter;

 

(f)                                    promptly after filing thereof, copies of all
financial statements and material reports that the Company sends to its
shareholders, and copies of all regular, periodic and special financial
information, proxy materials, reports and other information which the Company
shall file with the Securities and Exchange Commission;

 

(g)                                 promptly after submission to any government
or regulatory agency, all documents and information (including Forms 8-K)
furnished to such government or regulatory agency other than such documents and
information prepared in the normal course of business and which could not
reasonably be expected to result in a Material Adverse Effect, provided
that if such documents and information are available on or through the Company’s
website, the Company may comply with this clause (g) by delivering a
notice to the Lenders setting forth a written reference to such documents and
information to be found on or through such website;

 

(h)                                 promptly upon execution thereof, copies of
any amendments or modifications to the Indenture;

 

(i)                                     promptly upon completion thereof, copies of
the restated unaudited consolidated and consolidating financial statements of
the Company and its Subsidiaries, including unaudited consolidated and consolidating
balance sheets of the Company and its Subsidiaries, for the fiscal quarters
ended March 31, 2004, June 30, 2004 and September 30, 2004,
together with consolidated and consolidating income statements and consolidated
statements of cash flows of the Company and its Subsidiaries for each such
quarter; and

 

(j)                                     promptly, from time to time, such other
information regarding the operations, business affairs and condition (financial
or otherwise) of the Company or any Subsidiary of the Company as any Lender may
reasonably request.

 

SECTION 6.04.                                  Books
and Records; Access to Premises.

 

(a)                                  Maintain adequate records and proper books of
record and account in which full, true and correct entries will be made in a
manner to enable the preparation of financial statements in accordance with
Generally Accepted Accounting Principles, and which shall reflect all material
financial transactions of the Company and each of its Subsidiaries and material
matters involving the assets and business of the Company and such Subsidiaries.

 

H-44

 

(b)                                 At any time during normal business hours (and
upon reasonable advance notice so long as no Default or Event of Default has
occurred and is then continuing), permit the Administrative Agent or any Lender
or any agents or representatives thereof to examine and make copies of and
abstracts from the books and records of such information which the
Administrative Agent or any Lender reasonably deems necessary or desirable
(including, without limitation, the financial records of the Company and its
Subsidiaries) and to visit the properties of the Company or any of its
Subsidiaries and to discuss the affairs, finances and accounts of the Company
or any of its Subsidiaries with any of their respective executive officers or
the Company’s independent accountants, provided that the costs thereof shall be
for the account of the Lenders so long as no Default or Event of Default shall
have occurred and is then continuing. 
The Lenders shall use reasonable efforts to coordinate any such
examinations, copying, visits or discussions.

 

SECTION 6.05.                                  Notice of Adverse Change.  Promptly notify the Administrative Agent (and
the Administrative Agent shall promptly notify each Lender) in writing of (a) any
change in the business or the operations of the Company or its Subsidiaries
which could reasonably be expected to have a Material Adverse Effect, and (b) any
information which indicates that any financial statements which are the subject
of any representation contained in this Agreement, or which are furnished to
the Administrative Agent or the Lenders pursuant to this Agreement, fail to
present fairly, as of the date thereof and for the period covered thereby, the
financial condition and results of operations purported to be presented
therein, disclosing the nature thereof.

 

SECTION 6.06.                                  Notice of Default.  Promptly notify the
Administrative Agent (and the Administrative Agent shall promptly notify each
Lender) of any Default or Event of Default which shall have occurred or the
occurrence or existence of any event or circumstance that in the reasonable
judgment of the Company is likely to become a Default or Event of Default,
which notice shall include a written statement as to such occurrence,
specifying the nature thereof and the action (if any) which is proposed to be
taken with respect thereto.

 

SECTION 6.07.                                  Notice of Litigation and Investigations.  Promptly notify the Administrative Agent (and
the Administrative Agent shall promptly notify each Lender) of any action, 

suit, investigation or proceeding at law or in equity or by or before any
governmental instrumentality or other agency which could reasonably be expected
to have a Material Adverse Effect.

 

SECTION 6.08.                                  Notice
of Default in Other Agreements.  Promptly
notify the Administrative Agent (and the Administrative Agent shall promptly
notify each Lender) of any default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which the Company or any Subsidiary of the Company
is a party which default could reasonably be expected to have a Material
Adverse Effect.

 

SECTION 6.09.                                  Notice of ERISA Event.  Promptly, and in any event within ten (10) days,
after the Company or any Guarantor knows any of the following, deliver to the
Administrative Agent (and the Administrative Agent shall promptly notify each
Lender) a certificate of the Chief Financial Officer of the Company setting
forth details as to the occurrence and the action, if any, which the Company,
any Guarantor or any ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by the
Company, such Guarantor, such ERISA Affiliate, the PBGC, a Plan participant or
the Plan administrator, with respect thereto: 
that a Reportable Event has occurred with respect to a Plan, that an
accumulated funding deficiency (as defined in Section 412 of the Code) has
been incurred or an application may be or has been made to the Secretary of the

 

H-45

 

Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a
Single-Employer Plan, that a Plan has been terminated, reorganized, partitioned
or declared insolvent under Title IV of ERISA, that one or more Single-Employer
Plans have an Unfunded Current Liability in excess of $1,000,000 in the
aggregate, that involuntary proceedings may be or have been instituted to
terminate a Plan, that a proceeding has been instituted pursuant to Section 515
of ERISA to collect a delinquent contribution to a Plan, or that the Company,
any Guarantor or any ERISA
Affiliate will incur any liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4201 or 4204 of ERISA.  Upon request of any Lender, the Company will
deliver to each Lender a complete copy of the annual report (Form 5500)
filed for each Single-Employer Plan.

 

SECTION 6.10.                                  Notice
of Environmental Law Violations.  Promptly
notify the Administrative Agent (and the Administrative Agent shall promptly
notify each Lender) of the receipt of any notice of an action, suit, or
proceeding before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, pending against the
Company or any Subsidiary of the Company relating to any alleged violation of
any Environmental Law which could reasonably be expected to have a Material
Adverse Effect.

 

SECTION 6.11.                                  Compliance with Applicable Laws.  Comply
with the requirements of all applicable laws, rules, regulations and orders of
any Governmental Authority, the breach of which could reasonably be expected to
have a Material Adverse Effect, including, without limitation, the rules and
regulations of the Board of Governors of the Federal Reserve System and the
Federal Deposit Insurance Corporation.

 

SECTION 6.12.                                  Additional
Subsidiaries.  Give the
Administrative Agent prompt written notice of the creation, establishment or
acquisition, in any manner, of any Material Subsidiary not existing on the
Closing Date.  Subject to the last
sentence of this Section 6.12, the Company or a Material Domestic
Subsidiary, as appropriate, (a) shall execute a Pledge Agreement, in the
form of Exhibit E-1 or E-2 hereto (or such other agreement as
shall be required by the Administrative Agent), as applicable, with respect to (i) all
of the shares of capital stock or other ownership interest of each Subsidiary
which is or becomes a Material Domestic Subsidiary and (ii) not more than
65% of the capital stock of each First-Tier Subsidiary of such Person which is
or becomes a Material Non-Domestic Subsidiary, (b) shall cause each
Subsidiary of such Person which is a Material Domestic Subsidiary to execute
amendments with respect to the Guaranty and the Security Agreement, pursuant to
which such Subsidiary becomes a “Guarantor” and “Grantor” under the Guaranty
and the Security Agreement, respectively, (c) shall deliver an opinion of
counsel, (i) simultaneously with the delivery of any Pledge Agreement
executed pursuant to clause (a)(i) above and (ii) within 60 days of
the delivery of any Pledge Agreement executed pursuant to clause (a)(ii) above,
that such Pledge Agreement is valid and enforceable in the jurisdiction of
formation of such Material Domestic Subsidiary and Material Non-Domestic Subsidiary,
as the case may be, provided that if such opinion, in connection with the
delivery of any Pledge Agreement executed pursuant to clause (a)(ii) above,
cannot be provided, the Company or such Material Non-Domestic Subsidiary, as
appropriate, shall execute any additional documents that may be required in
order to perfect the lien granted by such Pledge Agreement in such jurisdiction
and to enable such counsel to deliver an acceptable opinion with respect
thereto and (d) with respect to the pledge of capital stock or other
ownership interest of any Material Domestic Subsidiary that is a “certificated
security” within the meaning of Section 8-102(a)(4) of the
Uniform Commercial Code, deliver certificates and powers with respect to such
interests duly endorsed in blank, and, in the event of uncertificated
interests, to the extent the Administrative Agent’s Lien therein is not already
perfected by the filing of the UCC-1 financing 

 

H-46

 

statements referred to in Section 5.01(c) hereof, additional
UCC-1 financing statements; in the case of both (a), (b) and (d),
within ten (10) Business Days after the creation, establishment or
acquisition of such Material Subsidiary and in connection therewith shall
deliver or cause to be delivered such proof of corporate action, incumbency of
officers and other documents as are consistent with those delivered as to each
Subsidiary pursuant to Section 5.01 hereof on the Closing Date, or as the
Administrative Agent may request, each in form and substance satisfactory to
the Administrative Agent.  In no event
shall the Company be required to pledge any of the assets of a Subsidiary of
the Company that is a controlled foreign corporation, as defined in Section 957(a) of
the Code, including, but not limited to the stock of any Subsidiary of the
Company held directly or indirectly by any such Subsidiary.

 

SECTION 6.13.                                  Environmental
Laws.  Comply in all material
respects with the requirements of all applicable Environmental Laws, provide to
the Lenders all documentation in connection with such compliance that any of
the Lenders may reasonably request, and defend, indemnify, and hold harmless
the Administrative Agent and each Lender and their respective employees,
agents, officers, and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs, or expenses of
whatever kind or nature, known or unknown, contingent or otherwise, arising out
of, or in any way related to, (a) the presence, disposal, or release of
any Hazardous Materials on any property at any time owned or occupied by the
Company or any Subsidiary of the Company, (b) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to such Hazardous Materials, (c) any lawsuit brought or
threatened, settlement reached, or government order relating to such Hazardous
Materials, and/or (d) any violation of applicable Environmental Laws,
including, without limitation, reasonable attorney and consultant fees,
investigation and laboratory fees, court costs, and litigation expenses.

 

SECTION 6.14.                                  Non-Material
Subsidiaries.  In the event that
the assets or revenues of the Non-Material Subsidiaries, taken as a whole,
shall, at any time, exceed ten percent (10%) of Consolidated Total Assets or
Consolidated Total Revenues, then, at such time one or more Non-Material
Subsidiaries, as selected by the Company, shall be deemed Material Subsidiaries
so that the Non-Material Subsidiaries, taken as a whole, shall no longer,
account for more than ten percent of Consolidated Total Assets or Consolidated
Total Revenues.  In the event that any
Non-Material Subsidiary shall be deemed a Material Subsidiary, such Subsidiary
or such Subsidiary’s parent shall comply with the relevant provisions of Section 6.12
hereof.

 

ARTICLE VII

NEGATIVE COVENANTS

 

The
Company covenants and agrees with the Lenders that so long as the Commitments
remain in effect or any of the principal of or interest on any Note or any
other Obligations hereunder shall be unpaid, it will not, and will not cause or
permit any of its Subsidiaries,
directly or indirectly, to:

 

SECTION 7.01.                                  Indebtedness.  Incur, create, assume or suffer to exist or
otherwise become liable in respect of any Indebtedness, other than:

 

(a)                                  Indebtedness incurred prior to the date
hereof as described in Schedule 7.01 attached hereto and any refinancing
of such Indebtedness, provided that the aggregate principal amount of such
Indebtedness is not increased (unless such increase is otherwise permitted
under Sections 7.01(b) through 7.01(h) hereof;

 

(b)                                 Indebtedness to the Lenders under this
Agreement, the Notes or any other Loan 

 

H-47

 

Document;

 

(c)                                  Indebtedness for trade payables incurred in
the ordinary course of business; provided such payables shall be paid or
discharged when due;

 

(d)                                 Indebtedness consisting of guarantees
permitted pursuant to Section 7.03 hereof;

 

(e)                                  Subordinated Indebtedness, including without
limitation, indebtedness evidenced by the Subordinated Notes, provided
that such Subordinated Indebtedness shall not exceed $300,000,000, in the
aggregate, and provided further, that no Default or Event of Default
shall have occurred and be continuing at the time of incurrence thereof or
would occur after giving effect to the incurrence of such Subordinated
Indebtedness;

 

(f)                                    Indebtedness secured by purchase money liens
as permitted under Section 7.02(i) hereof and Indebtedness arising
under Capital Leases; provided that the aggregate amount of such Indebtedness
shall not exceed $15,000,000 during any fiscal year of the Company, or
$30,000,000 at any one time outstanding, and, further, provided no Default or
Event of Default shall have occurred and be continuing at the time of
incurrence thereof or would occur after giving effect to the incurrence of such
Indebtedness;

 

(g)                                 Indebtedness with respect to Hedging
Agreements entered into by the Company, provided that the aggregate net
liabilities under all Hedging Agreements shall not exceed $5,000,000 at the
time of incurrence thereof, and provided further, that such Hedging Agreements
shall be entered into only in the ordinary course of its business and not for
speculative purposes;

 

(h)                                 Indebtedness arising under or with respect to
foreign exchange contracts entered into by the Company or any of its
Subsidiaries in the ordinary course of its business and not for speculative
purposes for the purchase or sale of foreign currency and with respect to which
the net daily settlement amount of any particular date, shall not exceed
$25,000,000, in the aggregate;

 

(i)                                     Indebtedness for taxes, assessments or other
governmental charges or levies not yet delinquent or which are being contested
in good faith by appropriate proceedings; provided, however, that adequate
reserves with respect thereto are maintained on the books of the Company or any
Subsidiary of the Company in accordance with Generally Accepted Accounting
Principles;

 

(j)                                     Indebtedness owing by (i) the Company to
any of its Material Subsidiaries or (ii) any Material Subsidiary of the
Company to the Company or any other Material Subsidiary of the Company;

 

(k)                                  Indebtedness owing by (i) the Company to
any of its Non-Material Subsidiaries or (ii) any Non-Material Subsidiary
of the Company to the Company or any other Non-Material Subsidiary of the
Company, provided such Indebtedness shall not exceed $25,000,000, in the
aggregate;

 

(l)                                     unsecured Indebtedness of Non-Domestic
Subsidiaries incurred in connection with performance standby letters of credit,
bank guarantees, bonds or similar arrangements, incurred in the ordinary course
of its business, the Dollar Equivalent Amount of which shall not exceed
$10,000,000 at any time;

 

(m)                               Indebtedness assumed in connection with any
Permitted Acquisition, provided 

 

H-48

 

that such Indebtedness is secured only by those liens permitted under Section 7.02(h) hereof,

 

(n)                                 additional Indebtedness assumed in connection
with any Permitted Acquisition (not described in Section 7.01(l) or (n)
hereof), not to exceed $5,000,000, in the aggregate, provided that such
Indebtedness is unsecured and shall be terminated within six months after the
closing date of such Permitted Acquisition and, provided further that, no
Default or Event of Default shall have occurred and be continuing or would
occur after giving effect to the incurrence of such Indebtedness;

 

(o)                                 additional Indebtedness incurred in
connection with any Permitted Acquisition (not described in Section 7.01(l)
or (m) hereof), not to exceed $5,000,000, in the aggregate, provided that such
Indebtedness is unsecured and shall solely consist of promissory notes issued
by the Company or the Subsidiary of the Company, as applicable, in favor of the
seller with respect to such Permitted Acquisition and, provided further that,
no Default or Event of Default shall have occurred and be continuing or would
occur after giving effect to the incurrence of such Indebtedness; and

 

(p)                                 additional unsecured Indebtedness of the
Company and its Subsidiaries (not described in Section 7.01 (a) through
(n) hereof), not to exceed $5,000,000, in the aggregate.

 

SECTION 7.02.                                  Liens.     Incur,
create, make, assume or suffer to exist any Lien on any of their respective
properties or assets, now or hereafter owned, other than:

 

(a)                                  Liens existing on the date hereof (which are
not described in Sections 7.02(b) through 7.02(i) hereof) as set
forth on Schedule 7.02 attached hereto, securing Indebtedness outstanding
on such date or incurred in connection with the extension, renewal or
refinancing of the Indebtedness secured by such existing Liens; provided
that any extension, renewal or replacement Lien shall be limited to the
property encumbered by the existing Lien and the principal amount of the
Indebtedness being extended, renewed or refinanced does not increase;

 

(b)                                 Liens securing Indebtedness described in Section 7.01(i) hereof,
provided that no notice of lien has been filed or recorded under the Code;

 

(c)                                  carriers’, warehousemens’, mechanics’,
suppliers’ or other like Liens arising in the ordinary course of business and
not overdue for a period of more than sixty (60) days or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject
thereto;

 

(d)                                 Liens incurred or deposits to secure (i) the
non-delinquent performance of tenders, bids, trade contracts (other than for
borrowed money), leases and statutory obligations, (ii) contingent
obligations on surety, performance and appeal bonds, and (iii) other
non-delinquent obligations of similar nature; in each case, incurred in the
ordinary course of business;

 

(e)                                  any attachment, judgment or similar Lien
arising in connection with any court or governmental proceeding, provided that
the execution or other enforcement of such Lien is effectively stayed within
thirty (30) days, provided, further that an Event of Default shall not be
deemed to occur solely by reason of the continuance of such Liens beyond such
thirty (30) day period so long as the aggregate amount secured by all such
continuing Liens does not exceed $500,000;

 

(f)                                    easements, rights of way, restrictions and
other similar charges or encumbrances incurred in the ordinary course of
business which, in the aggregate, do not interfere in any material 

 

H-49

 

respect with the occupation, use and enjoyment by the Company or any
Subsidiary of the Company of the

 

property or assets encumbered thereby in the normal course of their
respective business or materially impair the value of the property subject
thereto;

 

(g)                                 deposits or pledges required in the ordinary
course of business in connection with workers’ compensation, unemployment insurance
and other social security laws;

 

(h)                                 Liens upon assets acquired in Permitted
Acquisitions, provided that such Liens encumber only (i) specific
equipment or real property; or (ii) other assets acquired in such
Permitted Acquisition, provided that Liens on such other assets do not secure
more than $5,000,000 of Indebtedness in the aggregate and provided further that
such Liens on such other assets are released within six months after the
closing date of such Permitted Acquisition;

 

(i)                                     purchase money Liens on any property acquired
or held by the Company or its Subsidiaries in the ordinary course of business,
securing Indebtedness permitted pursuant to Section 7.01(f) hereof;
provided in each case (i) no Default or Event of Default shall have
occurred and be continuing at the time such Lien is created or shall occur
after giving effect to such Lien, (ii) such purchase money lien does not
secure more than 100% of the purchase price of, and encumbers only, the
property acquired, and (iii) such purchase money Lien does not secure any
Indebtedness other than in respect of the purchase price of the asset acquired;

 

(j)                                     Liens arising in connection with Capital
Leases permitted under Section 7.01(f) hereof; provided, that
no such Lien shall extend to or cover any assets other than the assets subject
to such Capital Lease;

 

(k)                                  Liens arising from precautionary Uniform
Commercial Code financing statements filed solely for notice purposes in
respect of operating leases, consignments and similar arrangements entered into
by the Company or any of its Subsidiaries in the ordinary course of business;

 

(l)                                     statutory and common law landlord’s liens
under leases;

 

(m)                               Liens in favor of banks or other depository
institutions upon property or assets arising under the common law or pursuant
to contractual rights of set off; and

 

(n)                                 Liens granted to the Administrative Agent for
the benefit of the Lenders pursuant to the Security Agreement.

 

SECTION 7.03.                                  Guaranties.         Guarantee, endorse, become surety for, or
otherwise in any way become or be responsible for the Indebtedness or
obligations of any Person, whether by agreement to maintain working capital or
equity capital or otherwise maintain the net worth or solvency of any Person or
by agreement to purchase the Indebtedness of any other Person, or agreement for
the furnishing of funds, directly or indirectly, through the purchase of goods,
supplies or services for the purpose of discharging the Indebtedness of any
other Person or otherwise, or enter into or be a party to any contract for the
purchase of merchandise, materials, supplies or other property if such contract
provides that payment for such merchandise, materials, supplies or other
property shall be made regardless of whether delivery of such merchandise,
supplies or other property is ever made or tendered except:

 

H-50

 

(a)                                  guaranties executed or committed prior to the
date hereof as described on Schedule 7.03 attached hereto including any
renewals or extension thereof provided that such renewals or extension do not
increase the maximum exposure pursuant to the guaranty (unless such increase is
permitted by Section 7.03(d) hereof);

 

(b)                                 endorsements of negotiable instruments for
collection or deposit in the ordinary course of business;

 

(c)                                  guaranties of any Indebtedness under this
Agreement or any other Loan Document; and

 

(d)                                 guaranties by the Company of any Indebtedness
permitted pursuant to Section 7.01 hereof of any Subsidiary of the Company
or guaranties by any Subsidiary of the Company of such Indebtedness of the
Company or any other Subsidiary.

 

SECTION 7.04.                                  Sale of Assets.  Sell, lease, transfer or otherwise dispose of
their respective properties and assets, whether or not pursuant to an order of
a federal agency or commission, except for (a) the sale of inventory
disposed of in the ordinary course of business, or (b)  so long as no
Event of Default shall have occurred and is continuing or could occur as a
result thereof, (i) the sale or other disposition of properties or assets
no longer used or useful in the conduct of their respective businesses, and (ii) the
sale or disposition of assets in arms length transactions provided that the net
proceeds of any such sale shall not exceed $5,000,000, in any fiscal year, or $10,000,000,
in the aggregate.

 

SECTION 7.05.                                  Sales
of Receivables.  Sell, transfer,
discount or otherwise dispose of notes, accounts receivable or other
obligations owing to the Company or any Subsidiary of the Company, with or
without recourse, except for collection in the ordinary course of business.

 

SECTION 7.06.                                  Loans
and Investments.  Make or commit
to make any advance, loan, extension of credit or capital contribution to, or
purchase or hold beneficially any stock or other securities, or evidence of
Indebtedness, of, purchase or acquire all or a substantial part of the assets
of, or make or permit to exist any interest whatsoever in, any other Person
except for (a) Eligible Investments; (b) trade credit to customers,
provided that such credit is extended in the ordinary course of the business of
the Company or such Subsidiary or if such credit is not extended in the
ordinary course, such credit does not exceed $5,000,000, in the aggregate, at
any time; (c) so long as no Default or Event of Default shall have
occurred and is then continuing, Permitted Equity Investments by the Company or
any Subsidiary of the Company in any Person which is not a Subsidiary of the
Company and loans by the Company or any Subsidiary to such Person in connection
with such Permitted Equity Investment, provided that such non-subsidiary
entities are engaged in a business which is related to the business of the
Company, and provided further that aggregate Permitted Equity Investment Costs
incurred in connection with all Permitted Equity Investments shall not be in
excess of $12,000,000; (d) Permitted Acquisitions by the Company and any
of its Subsidiaries; (e) distributions received by the Company solely as a
result of the involuntary conversion of a contractual right to a stock or other
investment; (f) investments, loans or advances by the Company in any of
its Subsidiaries or by any Subsidiary of the Company in the Company or in any
other Subsidiary of the Company; and (g) so long as no Default or Event of
Default shall have occurred and is then continuing or would result therefrom,
the repurchase by the Company of up to $25,000,000, in the aggregate, of
outstanding Subordinated Notes.

 

SECTION 7.07.                                  Nature
of Business.   Fail to carry on its business in substantially
the 

 

H-51

 

same manner and in substantially the same fields as such business is
carried on and maintained as of the Closing Date.

 

SECTION 7.08.                                  Sale
and Leaseback.  Enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, whether real or personal, used or useful in its
business, whether now owned or hereafter acquired, if at the time of such sale
or disposition it intends to lease or otherwise acquire the right to use or
possess (except by purchase) such property or like property for a substantially
similar purpose.

 

SECTION 7.09.                                  Federal Reserve Regulations.  Permit any Loan or the proceeds of any Loan
or any other extension of credit hereunder to be used for any purpose which
violates or is inconsistent with the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System.

 

SECTION 7.10.                                  Accounting Policies and Procedures.  Permit any change in the accounting policies
and procedures of the Company or any of its Subsidiaries, including a change in
fiscal year, provided, however, that any policy or procedure required to be
changed by the Financial Accounting Standards Board (or other board or
committee thereof) in order to comply with Generally Accepted Accounting
Principles may be so changed; provided further, that any changes to the
accounting practices and procedures of a Subsidiary acquired in a Permitted
Acquisition shall be permitted only to the extent necessary or appropriate to
conform the accounting practices and procedures of such Subsidiary with those
of the Company and its other Subsidiaries.

 

SECTION 7.11.                                  Hazardous Materials.  Cause or permit any of its properties or
assets to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce or process Hazardous Materials, except in
compliance in all material respects, with all applicable federal, state and
local laws or regulations, or cause or permit, as a result of any intentional or
negligent act or omission on the part of the Company or any of its
Subsidiaries, a release of Hazardous Materials onto such property or asset or
onto any other property, except in compliance in all material respects with
such laws and regulations.

 

SECTION 7.12.                                  Limitations on Fundamental Changes, Limitations on
Consideration; Amendments of Organizational Documents.   Except as permitted by Section 7.04
hereof, (a) merge or consolidate with, or sell, assign, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now or hereafter acquired) to, any
Person, or (b) except with respect to a Permitted Acquisition, and except
as set forth on Schedule 7.12 hereto, merge or consolidate with or acquire
all of the stock or all or substantially all of the assets or the business of
any Person or liquidate, wind up or dissolve or suffer any liquidation or
dissolution, or (c) enter into or agree to any amendment, modification or
waiver of any term or condition of its respective organizational documents
which would adversely affect the rights and remedies of the Administrative
Agent or the Lenders or would otherwise have a Material Adverse Effect.  Notwithstanding the foregoing, (a) any
Domestic Subsidiary may merge with and 
into the Company or any Domestic Subsidiary, (b) any Non-Domestic
Subsidiary may merge with and into another Non-Domestic Subsidiary, provided,
that no Non-Domestic Subsidiary with respect to which the Administrative
Agent has received a pledge of stock shall merge with and into another
Non-Domestic Subsidiary if 65% of the shares or other ownership interests of
the surviving Subsidiary cannot be pledged to the Administrative Agent for the
benefit of the Lenders.

 

H-52

 

SECTION 7.13.                                  Financial Condition Covenants.

 

(a)                                  Consolidated Senior Funded Debt to
Consolidated EBITA.  Commencing with the fiscal year ended December 31,
2004, permit the ratio of Consolidated Senior Funded Debt to Consolidated EBITA
to be greater than 3.00:1.00.

 

(b)                                 Consolidated Quick Ratio. 
Commencing with the fiscal year ended December 31, 2004, permit the
Consolidated Quick Ratio to be less than 1.00:1.00 at any time.

 

(c)                                  Consolidated Fixed Charge Coverage Ratio. 
Commencing with the fiscal year ended December 31, 2005, permit the
Consolidated Fixed Charge Coverage Ratio to be less than 1.50:1.00.

 

(d)                                 Consolidated EBT. (i) Commencing with the fiscal quarter
ending September 30, 2005 (with respect to the two fiscal quarters then
ending), permit Consolidated EBT to be less than $0, for any two consecutive
fiscal quarters, on an aggregate basis, or (ii) commencing with the fiscal
quarter ending March 31, 2005, permit Consolidated EBT to be less than
negative $4,000,000, in any one fiscal quarter.

 

(e)                                  Consolidated EBITDA. 
Permit Consolidated EBITDA for the fiscal year ended December 31,
2004 to be less than $23,000,000.

 

Compliance
with all of the financial covenants in this Section 7.13 may be determined
by reference to the consolidated financial statements of the Company delivered
to the Administrative Agent in accordance with Section 6.03 hereof.  All financial covenants will be applicable at
all times and tested quarterly, as of the last day of each fiscal quarter.

 

SECTION 7.14.                                  Subordinated
Debt.  (a) Except as
permitted in Section 7.06(g) hereof, directly or indirectly prepay,
defease, purchase or redeem any Subordinated Debt, or (b) amend,
supplement or otherwise modify any of the provisions governing such
subordination in any way which would materially affect the interests of the
Lenders, without the prior written consent of the Required Lenders.

 

SECTION 7.15.                                  Dividends.  Declare any cash dividend on, or make any
payment on account of, or set apart assets for a sinking or other analogous
fund for the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of stock of the Company whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash, securities or property or in obligations of the
Company or in any combination thereof, or permit any Affiliate to make any
payment on account of, or purchase or otherwise acquire, any shares of any class
of the stock of the Company from any Person, except for (a) so long as no
Default or Event of Default shall have occurred and is then continuing or could
occur as a result thereof, repurchase by the Company of its common stock and
dividends and distributions by the Company to its shareholders provided that
the aggregate amount of such permitted repurchases and dividends and
distributions does not exceed $10,000,000, in the aggregate, during the term of
this Agreement and (b) dividends or distributions paid by any Subsidiary
of the Company to its immediate parent.

 

SECTION 7.16.                                  Transactions with Affiliates.  Enter into any transaction, including,
without limitation, the purchase, sale, or exchange of property or the
rendering of any service, with any Affiliate, except in the ordinary course of
and pursuant to the reasonable requirements of the Company’s or any of its
Subsidiaries’ business and upon fair and reasonable terms no less favorable to
the Company 

 

H-53

 

or such Subsidiary than they would obtain in a comparable arms-length
transaction with a Person not an Affiliate.

 

SECTION 7.17.                                  Negative Pledge.  Enter into any agreement with any Person
other than the Lenders pursuant to this Agreement or any of the other Loan
Documents which prohibits or limits the ability of the Company or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon its
property, assets or revenues, whether now owned or hereafter acquired, except
to the extent that any such agreement relates only to specific property that is
the subject of a Permitted Lien.

 

SECTION 7.18.                                  Indenture.   Amend or modify any of the provisions of the
Indenture without the prior consent of the Required Lenders other than
amendments or modifications which do not adversely affect the Lenders.

 

ARTICLE VIII

EVENTS OF DEFAULT

 

SECTION 8.01.                                  Events of Default.  In the case of the happening of any of the
following events (each an “Event of Default”):

 

(a)                                  failure to pay (i) the principal of any
Loan or any reimbursement obligations with respect to a drawing under any
Letter of Credit as and when due and payable, or (ii) interest on any Loan
or any fees or other amounts under this Agreement, as and when due and payable
and, in the case of subclause (ii) only, such failure shall continue
unremedied for a period of two (2) Business Days;

 

(b)                                 any representation or warranty made or deemed
made in this Agreement or any other Loan Document shall prove to be false or
misleading in any material respect when made or given or when deemed made or
given;

 

(c)                                  any report, certificate, financial statement
or other instrument furnished in connection with this Agreement or any other
Loan Document or the extensions of credit hereunder, shall prove to be false or
misleading in any material respect when furnished, made or given or when deemed
made or given;

 

(d)                                 default shall be made in the due observance
or performance of any covenant, condition or agreement of the Company or any
Subsidiary of the Company to be performed (i) pursuant to Article 6
of this Agreement (other than Section 6.03(a), (b), (c), or (d), Section 6.04(b) and
Section 6.06 hereof) and, in the case of this subclause (i) only,
such default shall continue unremedied for a period of thirty (30) consecutive
days or (ii) pursuant to any other provision of this Agreement or any
other Loan Document that is not specifically addressed in Sections 8.01(a),
(b), (c) or (d)(i) hereof;

 

(e)                                  default in the performance or compliance in
respect of any agreement or condition relating to any Indebtedness of the
Company or any Guarantor in excess of $5,000,000 individually or in the
aggregate (other than the Notes), if the effect of such default is to
accelerate the maturity of such Indebtedness or to permit the holder or obligee
thereof (or a trustee on behalf of such holder or obligee) to cause such
Indebtedness to become due prior to the stated maturity thereof, or any such
Indebtedness shall not be paid when due (beyond any applicable grace period);

 

(f)                                    the Company or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code or any other federal 

 

H-54

 

or state bankruptcy, insolvency or similar law, (ii) consent to
the institution of, or fail to controvert in a timely and appropriate manner,
any such proceeding or the filing of any such petition, (iii) apply for or
consent to the employment of a receiver, trustee, custodian, sequestrator or
similar official for the Company or any Material Subsidiary or for a
substantial part of its property; (iv) file an answer admitting the
material allegations of a petition filed against it in such proceeding, (v) make
a general assignment for the benefit of creditors, or (vi) take corporate
action for the purpose of effecting any of the foregoing; or the Company or any
Material Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due;

 

(g)                                 an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of the Company or any Material Subsidiary or
of a substantial part of their respective property, under Title 11 of the
United States Code or any other federal or state bankruptcy, insolvency or
similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for the Company or any Subsidiary of the
Company or for a substantial part of their property, or (iii) the
winding-up or liquidation of the Company or any Material Subsidiary and such
proceeding or petition shall continue undismissed for sixty (60) days or an
order or decree approving or ordering any of the foregoing shall continue
unstayed and in effect for sixty (60) days;

 

(h)                                 one or more orders, judgments or decrees for
the payment of money in excess of $5,000,000 in the aggregate shall be rendered
against the Company or any Subsidiary of the Company which is not covered by
insurance and the same shall not have been paid in accordance with such
judgment, order or decree or settlement and either (i) an enforcement
proceeding shall have been commenced by any creditor upon such judgment, order
or decree, or (ii) there shall have been a period of sixty (60) days
during which a stay of enforcement of such judgment, order or decree, by reason
of pending appeal or otherwise, was not in effect;

 

(i)                                     any Plan shall fail to maintain the minimum funding
standard required under Section 412 of the Code for any Plan year or part
thereof or a waiver of such standard or extension of any amortization period is
applied for or granted under Section 412 of the Code, any Plan is
terminated by the Company, any Subsidiary of the Company or any ERISA Affiliate
or the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, a Reportable Event shall have occurred with respect
to a Plan or the Company, any Subsidiary of the Company, or any ERISA Affiliate
shall have incurred a liability to or on account of a Plan under Section 515,
4062, 4063, 4201 or 4204 of ERISA, and there shall result from any such event
or events the imposition of a lien upon the assets of the Company or any
Subsidiary of the Company, the granting of a security interest on such assets,
or a liability to the PBGC or a Plan or a trustee appointed under ERISA or a
penalty under Section 4971 of the Code, and in each case, such event or
condition, together with all such events or conditions, if any, could
reasonably be expected to result in liability of the Company and the
Subsidiaries of the Company in an aggregate amount exceeding $1,000,000;

 

(j)            any material provision of any Loan
Document shall for any reason cease to be in full force and effect in
accordance with its terms or the Company or any Guarantor shall so assert in
writing;

 

(k)                                  a Change of Control shall have occurred;

 

H-55

 

(l)                                     the Company shall designate any Indebtedness
other than Indebtedness arising under the Credit Agreement as “Designated
Senior Indebtedness” (as that term is defined in the Indenture) without the
prior written approval of the Required Lenders; or

 

(m)                               an Event of Default (as defined in the Indenture) shall have occurred
and be continuing;

 

then,
at any time thereafter during the continuance of any such event, the
Administrative Agent may, and, upon the request of the Required Lenders, shall,
by written or telephonic notice to the Company, take either or both of the
following actions, at the same or different times, (a) terminate the
Commitments and (b) declare (i) the Notes, both as to principal and
interest, (ii) an amount equal to the Aggregate Letters of Credit
Outstanding and (iii) all other Obligations, to be forthwith due and
payable without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived, anything contained herein or in the Notes
to the contrary notwithstanding; provided, however, that if an
event specified in Section 8.01(f) or (g) hereof shall have
occurred, the Commitments shall automatically terminate and interest, principal
and amounts referred to in the preceding clauses (i), (ii) and (iii) shall
be immediately due and payable without presentment, demand, protest, or other
notice of any kind, all of which are expressly waived, anything contained
herein or in the Notes to the contrary notwithstanding.  With respect to all Letters of Credit that
shall not have expired or presentment for honor shall not have occurred, the
Company shall provide the Administrative Agent with Cash Collateral in an
amount equal to the aggregate undrawn amount of such Letters of Credit.  Such Cash Collateral shall be applied by the
Administrative Agent to reimburse Issuing Lender for drawings under Letters of
Credit for which the Issuing Lender has not been reimbursed and, to the extent
not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Company at such time or, if the maturity of the Loans has
been accelerated, be applied to satisfy other Obligations, with any amount
remaining after such satisfactions to be returned to the Company or paid to
such other party as may legally be entitled to the same.

 

ARTICLE IX

THE ADMINISTRATIVE AGENT

 

SECTION 9.01.                                  Appointment, Powers and Immunities.  Each
Lender hereby irrevocably appoints and authorizes the Administrative Agent to
act as its agent hereunder and under the other Loan Documents with such powers
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.  The
Administrative Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the other Loan Documents and shall
not be a trustee for any Lender, nor is the Administrative Agent acting in a
fiduciary capacity of any kind under this Agreement or the other Loan Documents
or in respect thereof or in respect of any Lender.  The Administrative Agent shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or the other Loan Documents, in any
certificate or other document referred to or provided for in, or received by
any of them under, this Agreement or the other Loan Documents, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or the other Loan Documents or any other document referred to or
provided for herein or therein or for the collectibility of the Loans or for
the validity or effectiveness of any assignment, mortgage, pledge, security
agreement, financing statement, document or instrument, or for the filing,
recording, re-filing, continuing or re-recording of any thereof or for any
failure by the Company or any Guarantor to perform any of its obligations
hereunder or under the other Loan Documents. 
The Administrative Agent may take all actions by itself and/or it may employ
agents and attorneys-in-fact, and shall not be responsible to any Lender,
except as to money or the securities received by it or its authorized agents,
for the negligence or 

 

H-56

 

misconduct of itself or its employees or of any such agents or
attorneys-in-fact, if such agents or attorneys-in-fact are selected by it with
reasonable care.  Neither the
Administrative Agent nor any of its directors, officers, employees or agents
shall be liable or responsible for any action taken or omitted to be taken by
it or them hereunder or under the other Loan Documents or in connection
herewith or therewith, except for its or their own gross negligence or willful
misconduct.

 

SECTION 9.02.                                  Reliance
by Administrative Agent.  The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability to any Lender for relying upon, any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the
Administrative Agent.  As to any matters not
expressly provided for by this Agreement or the other Loan Documents, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or under the other Loan Documents in
accordance with instructions signed by the Required Lenders, or such other
number of Lenders as is specified in Section 10.04 hereof, and such
instructions of the Required Lenders or other number of Lenders as aforesaid
and any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders.

 

SECTION 9.03.                                  Events of Default.  The
Administrative Agent shall not be deemed to have knowledge of the occurrence of
a Default or Event of Default (other than the non-payment of principal of or
interest on the Loans, of amounts payable in respect of draws under Letters of
Credit, or of fees to the extent the same are required to be paid to the
Administrative Agent for the account of the Lenders), unless the Administrative
Agent has received notice from a Lender or the Company 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 Lenders.  The Administrative Agent shall (subject to Section 9.07
hereof) take such action with respect to such Default or Event of Default as
shall be directed by the Required Lenders, except as otherwise provided in Section 10.04
hereof; provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but is not 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 Lenders.

 

SECTION 9.04.                                  Rights as a Lender.  With
respect to its Commitment and the Loans made by it, the Person which is the
Administrative Agent, in its capacity as a Lender hereunder, shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not acting as the Administrative Agent, and the term “Lender”
or “Lenders” shall, unless the context otherwise indicates, include each entity
which is the Administrative Agent in its individual capacity.  The Person which is the Administrative Agent
and its Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to and generally engage in any kind of
banking, trust or other business with the Company or its Affiliates, as if it
were not acting as the Administrative Agent, and, except to the extent
otherwise herein specifically set forth, the Administrative Agent may accept
fees and other consideration from the Company or its Affiliates, for services
in connection with this Agreement or any of the other Loan Documents or
otherwise without having to account for the same to the Lenders.

 

SECTION 9.05.                                  Indemnification.  The Lenders shall
indemnify the Administrative Agent (to the extent not reimbursed by the Company
under Section 10.03 hereof), ratably in accordance with the aggregate
outstanding principal amount of the Loans made by the Lenders (or, if no Loans
are at the time outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, 

 

H-57

 

obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in its
capacity as the Administrative Agent in any way relating to or arising out of
this Agreement or any of the other Loan Documents or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby and thereby (including, without limitation, the costs and
expenses which the Company is obligated to pay under Section 10.03 hereof
or under the applicable provisions of any other Loan Document) or the
enforcement of any of the terms hereof or of any other Loan Document, 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 Administrative
Agent.

 

SECTION 9.06.                                  Non-Reliance on Administrative Agent and Other
Lenders.  Each Lender agrees that it has,
independently and without reliance on the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
under the other Loan Documents.  The
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by the Company of this Agreement or the other Loan
Documents or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Company.  Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or under the other Loan Documents, or
furnished to the Administrative Agent with counterparts or copies for the
Lenders, the Administrative Agent shall not have any duty or ability to provide
any Lender with any credit or other information concerning the affairs,
financial condition or business of the Company, which may come into the
possession of  the Administrative Agent
or any of its Affiliates.

 

SECTION 9.07.                                  Failure to Act.  Except for action
expressly required of the Administrative Agent hereunder or under any other
Loan Documents, the Administrative Agent shall in all cases be fully justified
in failing or refusing to act hereunder or thereunder unless it shall be indemnified
to its satisfaction by the Lenders against any and all liability (except gross
negligence and willful misconduct) and expense which may be incurred by it by
reason of taking or continuing to take any such action.

 

SECTION 9.08.                                  Resignation of the Administrative Agent.  Subject
to the appointment and acceptance of a successor Administrative Agent as
provided in this Section 9.08, the Administrative Agent may resign at any
time by notifying the Lenders and the Company. 
Upon any such resignation, the Required Lenders shall have the
right,  with the approval of the Company
provided no Default or Event of Default shall have occurred and then be
continuing, such approval not to be unreasonably withheld, delayed or conditioned,
to appoint a successor to the Administrative Agent.  If no successor shall have been so appointed
by the Required Lenders (with the approval of the Company) and shall have
accepted such appointment within 30 days after the resigning Administrative
Agent gives notice of its resignation, then the resigning Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent which
shall be a bank of similar standing with an office in New York, New York, or an
Affiliate of any such bank.  Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Administrative Agent, and the resigning
Administrative Agent shall be discharged from its duties and obligations
hereunder as of such date.  The fees
payable by the Company to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Company
and such successor.  After the
Administrative Agent’s resignation 

 

H-58

 

hereunder, the provisions of this Article and Section 10.03
hereof shall continue in effect for the benefit of such resigning
Administrative Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Administrative Agent.

 

SECTION 9.09.                                  Sharing of Collateral and Payments.  In
the event that at any time any Lender shall obtain payment in respect of the
Obligations, or receive any collateral in respect thereof, whether voluntarily
or involuntarily, through the exercise of a right of banker’s lien, set-off or
counterclaim against the Company or otherwise, which results in it receiving
more than its pro rata share of the aggregate payments with respect to all of
the Obligations (other than any payment expressly provided hereunder to be
distributed on other than a pro rata basis), then such Lender  shall be deemed to have simultaneously purchased
from the other Lenders a share in their Obligations so that the amount of the
Obligations held by each of the Lenders shall be pro rata;  provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from the Lender
which received the proportionate over-payment, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.  The
Company agrees, to the extent it may do so under applicable law, that each
Lender so purchasing a portion of another Lender’s Loan or participation in any
Letter of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.

 

ARTICLE X

MISCELLANEOUS

 

SECTION 10.01.    Notices.  All
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including telecopy), and unless otherwise
expressly provided herein, shall be conclusively deemed to have been received
by a party hereto and to be effective on the day on which delivered by hand to
such party or one Business Day after being sent by overnight mail to the
address set forth below, or, in the case of telecopy notice, when acknowledged
as received, or if sent by registered or certified mail, three (3) Business
Days after the day on which mailed in the United States, addressed to such
party at such address:

 

(a)                                  if to the Administrative Agent, at:

 

HSBC
Bank USA, National Association

534
Broad Hollow Road

Melville,
New York 11747

Attention:                                         Christopher J. Mendelsohn or Relationship
Manager - Veeco

Instruments Inc.

Telecopy:                                           (631) 752-4340

 

With a copy to:

 

Farrell
Fritz, P.C.

EAB
Plaza, West Tower

Uniondale,
New York 11556

Attention:                                         Robert C. Creighton, Esq.

Telecopy:                                           (516) 227-0777

 

H-59

 

(b)                                 if to the Company, at:

 

Veeco
Instruments Inc.

100 Sunnyside Boulevard, Suite B

Woodbury, New York 
11797

Attention:                                         Chief Financial Officer

Telecopy:                                           (516) 677-0380

 

With a copy to:

 

Veeco
Instruments Inc.

100 Sunnyside Boulevard, Suite B

Woodbury, New York 
11797

Attention:                                         General Counsel

Telecopy:                                           (516) 714-1208

 

(c)                                  if to any Lender, to its address set forth in
the signature page of this Agreement and to the person so designated

 

- and -

 

(d)                         as to each such party at such other address
as such party shall have designated, (i) if such party is a Lender, by
written notice to the Administrative Agent and the Company, (ii) if such
party is the Company, by written notice to the Administrative Agent and each
Lender, and (iii) if such party is the Administrative Agent, by written
notice to the Company and each Lender, in each case delivered in accordance
with the provisions of this Section 10.01.

 

SECTION 10.02.                           Effectiveness; Survival; Integration.  This Agreement shall become effective on the
date on which all parties hereto shall have signed a counterpart copy hereof
and shall have delivered the same to the Administrative Agent.  All representations and warranties made
herein and in the other Loan Documents and in the certificates delivered
pursuant hereto or thereto shall survive the making by the Lenders of the Loans
and the issuance by the Issuing Lender of Letters of Credit, in each case, as
herein contemplated and the execution and delivery to the Lenders of the Notes
evidencing the Loans and shall continue in full force and effect so long as the
Obligations hereunder are outstanding and unpaid and the Commitments are in
effect.  The obligations of the Company
pursuant to Section 3.07, Section 3.08, Section 3.10, Section 3.13,
Section 3.14, Section 6.13, and Section 10.03 hereof shall,
notwithstanding anything herein to the contrary,  survive termination of this Agreement and
payment of the Obligations.  This
Agreement and any separate letter agreements with respect to fees payable to
the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof.

 

SECTION 10.03.                           Expenses.  The Company agrees (a) to indemnify,
defend and hold harmless the Administrative Agent, the Issuing Lender and each
Lender and their respective officers, directors, employees, and affiliates
(each, an “indemnified person”) from and against any and all losses, claims,
damages, liabilities or judgments to which any such indemnified Person may be
subject and arising out of or in connection with the Loan Documents, the
financings contemplated hereby, the use of any proceeds of such financings or
any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any of such indemnified persons is a party thereto,
and to reimburse each of 

 

H-60

 

such indemnified persons upon demand for any reasonable  legal or other expenses incurred in
connection with the investigation or defending any of the foregoing; provided
that the foregoing indemnity will not, as to any indemnified person, apply to
losses, claims, damages, liabilities, judgments or related expenses to the
extent arising from the willful misconduct or gross negligence of such
indemnified person, (b) to pay or reimburse the Administrative Agent for
all its out-of-pocket costs and reasonable expenses incurred in connection with
the preparation and execution of and any amendment, supplement or modification
to this Agreement, the Notes any other Loan Documents, and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including without limitation, the
reasonable fees and disbursements of Farrell Fritz, P.C., counsel to the
Administrative Agent, and (c) to pay or reimburse each Lender and the
Administrative Agent for all their costs and expenses incurred in connection
with the enforcement and preservation of any rights under this Agreement, the
Notes and the other Loan Documents, including, without limitation, the reasonable
fees and disbursements of counsel (including, without limitation, in-house
counsel) to the Administrative Agent and to the several Lenders, including all
such out-of-pocket expenses incurred during any work-out, restructuring or
negotiations in respect of the Obligations.

 

SECTION 10.04.                           Amendments and Waivers.  With the written consent of the Required
Lenders, the Administrative Agent and the Company may, from time to time, enter
into written amendments, supplements or modifications hereto for the purpose of
adding any provisions to this Agreement or the Notes or any of the other Loan
Documents or changing in any manner the rights of the Lenders or of the Company
hereunder or thereunder, and with the written consent of the Required Lenders,
the Administrative Agent on behalf of the Lenders may execute and deliver to
the Company a written instrument waiving, on such terms and conditions as the
Administrative Agent or the Required Lenders may specify in such instrument,
any of the requirements of this Agreement or the Notes or any of the other Loan
Documents or any Default or Event of Default; provided, however,
that no such waiver and no such amendment, or supplement or modification shall (a) extend
the maturity of any Note or any installment thereof or the Revolving Credit
Commitment Termination Date; (b) reduce the rate or extend the time of
payment of interest on any Note or any fees payable to the Lenders hereunder; (c) reduce
the principal amount of any Note or the amount of any reimbursement due in
respect of any Letter of Credit; (d) amend, modify or waive any provision
of this Section 10.04; (e) reduce the percentage specified in the
definition of Required Lenders or amend or modify any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination granting consent
hereunder; (f) consent to the assignment or transfer by the Company of any
of its rights or obligations under this Agreement; (g) except as expressly
permitted pursuant to this Agreement or any other Loan Document release any
collateral security granted to the Administrative Agent, if any; (h) release
any Guarantor from its Guaranty, or limit any Guarantor’s liability with
respect to its Guaranty, except with respect to the release of any Guarantor
which subsequently becomes a Non-Material Subsidiary; or (i) increase the
amount of the Total Commitment; or (j) permit any Letter of Credit issued
hereunder to expire on or after the Revolving Credit Commitment Termination
Date, in each case specified in clauses (a) through (j) above without the
written consent of all the Lenders; and provided, further, that
no such waiver and no such amendment, supplement or modification shall (i) amend,
modify, supplement or waive any provision of Article IX hereof with
respect to the Administrative Agent without the written consent of the
Administrative Agent or (ii) increase the amount of any Lender’s
Commitment without the written consent of such Lender.  Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Company, the Lenders, the Administrative Agent and all
future holders of the Notes.

 

H-61

 

SECTION 10.05.                           Successors
and Assigns; Participations.

 

(a)                                  This Agreement shall be binding upon and
inure to the benefit of the Company, the Lenders, the Administrative Agent, all
future holders of the Notes and their respective successors and assigns, except
that the Company may not assign or transfer any of its rights or obligations
under this Agreement or any other Loan Document without the prior written
consent of each Lender (and any such assignment or transfer without such
consent shall be null and void).

 

(b)                                 Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at any time
sell to one or more banks or other financial institutions (“Participants”)
participating interests in any Loan owing to such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interest of such Lender
hereunder.  In the event of any such sale
by a Lender of participating interests to a Participant, such Lender’s
obligations under this Agreement to the other parties under this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement, and the Company and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement.  The Company agrees that each Participant
shall be entitled to the benefits of Sections 3.07, 3.08, 3.10, 3.13 and 3.14
hereof with respect to its participation in the Commitments and in the Loans
and Letters of Credit outstanding from time to time; provided, however,
that no Participant shall be entitled to receive any greater amount pursuant to
such Sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.  No Participant shall have the right to consent
to any amendment to, or waiver of, any provision of this Agreement, except the
transferor Lender may provide in its agreement with the Participant that such
Lender will not, without the consent of the Participant, agree to any amendment
or waiver described in clause (a) through clause (k) of Section 10.04
hereof.

 

(c)                                  Subject to the last sentence of this
paragraph (c) any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to any
Lender or any domestic banking affiliate thereof, and, with the consent of the
Administrative Agent, and, so long as no Default or Event of Default shall have
occurred and be continuing, the Company (which in each case shall not be
unreasonably withheld, delayed or conditioned), to one or more additional banks
or financial institutions (“Purchasing Lenders”) all or any part of its
rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance Agreement, executed by such Purchasing
Lender, such transferor Lender and the Administrative Agent (and, in the case
of an Assignment and Acceptance Agreement relating to a Purchasing Lender that
is not then a Lender or a domestic banking affiliate thereof, also executed by
the Company), and delivered to the Administrative Agent for its
acceptance.  Upon such execution,
delivery and acceptance from and after the effective date specified in such
Assignment and Acceptance Agreement, (i) the Purchasing Lender thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance
Agreement, have the rights and obligations of a Lender hereunder with
Commitments as set forth therein and (ii) the transferor Lender thereunder
shall, to the extent provided in such Assignment and Acceptance Agreement, be
released from its obligations under this Agreement arising after such
transfer  (and, in the case of an
Assignment and Acceptance Agreement covering all or the remaining portion of a
transferor Lender’s rights and obligations under this Agreement, such
transferor Lender shall cease to be a party hereto except as to Sections 3.07,
3.08, 3.10 and 10.03 hereof for the period prior to the effective date).  Such Assignment and Acceptance Agreement
shall be deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Lender and the resulting
adjustment of Commitment Proportions arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under or in respect of this Agreement and the Notes.  On or prior to the effective date specified
in such Assignment and Acceptance Agreement, the 

 

H-62

 

Company, at its own expense, shall execute and deliver to the
Administrative Agent, in exchange for the surrendered Note, a new Revolving
Credit Note to the order of such Purchasing Lender in an amount equal to each
Commitments assumed by it pursuant to such Assignment and Acceptance Agreement
and, if the transferor Lender has retained any Commitment hereunder, a new
Revolving Credit Note to the order of the transferor Lender in an amount equal
to such Commitment retained by it hereunder. 
Such new Notes shall be in a principal amount equal to the principal
amount of such surrendered Notes, shall be dated the effective date specified
in the Assignment and Acceptance Agreement and shall otherwise be in the form
of the Notes replaced thereby.  The Notes
surrendered by the transferor Lender shall be returned by the Administrative
Agent to the Company marked “cancelled”. 
Anything in this Section 10.05 to the contrary notwithstanding, no
transfer to a Purchasing Lender shall be made pursuant to this paragraph (c) if
(x) such transfer by any one transferor Lender to any one Purchasing Lender
(other than a Purchasing Lender which is a Lender hereunder prior to such
transfer) is in respect of less than $10,000,000 of the Commitments of such
transferor Lender or (y) if less than all of the Commitment of such transferor
Lender is transferred, after giving effect to such transfer the amount held by
any transferor Lender would be less than $10,000,000.

 

(d)                                 The Administrative Agent, on behalf of the
Company, shall maintain at its address referred to in Section 10.01 hereof
a copy of each Assignment and Acceptance Agreement delivered to it and a
register (the “Register”) for the recordation of the names and addresses
of the Lenders and the commitments of, and principal amount of the Loans owing
to, each Lender from time to time.  The
entries in the Register shall be conclusive, in the absence of demonstrable
error and the Company, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register as the owner of the Loans
recorded therein for all purposes of this Agreement.  The Register shall be available for
inspection by the Company or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

 

(e)                                  Upon its receipt of an Assignment and
Acceptance Agreement executed by a transferor Lender and a Purchasing Lender
(and, in the case of a Purchasing Lender that is not then a Lender or an
Affiliate thereof, by the Company) together with payment by the Purchasing Lender
to the Administrative Agent of a registration and processing fee of $3,500 if
the Purchasing Lender is not a Lender prior to the execution of an Assignment
and Acceptance Agreement and $2,500 if the Purchasing Lender is a Lender prior
to the execution of an Assignment and Acceptance Agreement, the Administrative
Agent shall (i) accept such Assignment and Acceptance Agreement, (ii) record
the information contained therein in the Register, and (iii) give prompt
notice of such acceptance and recordation to the Lenders and the Company.

 

(f)                                    The Company authorizes each Lender to
disclose to any Participant or Purchasing Lender (each, a “Transferee”)
and any prospective Transferee any and all financial information in such Lender’s
possession concerning the Company and its Affiliates which has been delivered
to such Lender by or on behalf of the Company pursuant to this Agreement or
which has been delivered to such Lender by the Company in connection with such
Lender’s credit evaluation of the Company and its Subsidiaries prior to
entering into this Agreement.

 

(g)                                 If, pursuant to this Section 10.05, any
interest in this Agreement, a participation agreement, or any Note is
transferred to any transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, (i) to represent to the transferor Lender (for the benefit of
the transferor Lender, the Administrative Agent and the Company) that under
applicable law and treaties no taxes will be required to be withheld by the
Administrative Agent, the 

 

H-63

 

Company, or the transferor Lender with respect to any payments to be made
to such Transferee in respect of the Loans, (ii) to furnish to the
Administrative Agent, the transferor Lender and the Company the documentation
required of Lenders under Section 3.10(c) hereof, and (iii) to
agree (for the benefit of the Administrative Agent, the transferor Lender and
the Company) to provide the Administrative Agent, the transferor Lender and the
Company such additional documentation required by Lenders in the future under Section 3.10(c) hereof.

 

(h)                                 Any Lender may at any time pledge or assign
or grant a security interest in all or any part of its rights under this
Agreement and the other Loan Documents, including any portion of its Notes, to
any of the twelve (12) Federal Reserve Banks organized under Section 4 of
the Federal Reserve Act, 12 U.S.C. Section 341, provided that no such
assignment shall release the transferor Lender from its Commitments or its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party to this Agreement.

 

SECTION 10.06.                           No Waiver; Cumulative Remedies.  Neither any failure nor any delay on the part
of any Lender, the Issuing Lender or the Administrative Agent in exercising any
right, power or privilege hereunder or under any Note or any other Loan
Document shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise of any other right,
power or privilege.  The rights,
remedies, powers and privileges herein provided or provided in the other Loan
Documents are cumulative and not exclusive of any rights, remedies powers and
privileges provided by law.

 

SECTION 10.07.                           APPLICABLE
LAW.  THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.

 

SECTION 10.08.                           SUBMISSION
TO JURISDICTION; JURY WAIVER.  THE
COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR STATE
COURT IN THE STATE OF NEW YORK, COUNTY OF NEW YORK, COUNTY OF NASSAU OR COUNTY
OF SUFFOLK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, AND TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH FEDERAL OR
STATE COURTS, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OTHER
DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR THEREIN OR THE SUBJECT MATTER
HEREOF OR THEREOF MAY NOT BE LITIGATED IN OR BY SUCH FEDERAL OR STATE
COURTS.  TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY AGREES NOT TO (i) SEEK AND HEREBY WAIVES THE
RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER
NATION OR 

 

H-64

 

JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF
SUCH JUDGMENT OR (ii) ASSERT ANY COUNTERCLAIM IN ANY SUCH SUIT, ACTION OR
PROCEEDING UNLESS SUCH COUNTERCLAIM IS A COMPULSORY OR MANDATORY COUNTERCLAIM
UNDER APPLICABLE LAWS GOVERNING CIVIL PROCEDURE.  THE COMPANY AGREES THAT SERVICE OF PROCESS MAY BE
MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET
FORTH IN THIS AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK.  EACH PARTY HERETO KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE EXTENT PERMITTED BY APPLICABLE LAW THE RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT OR ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY RELATING THERETO, AND AGREES THAT NO PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED.  EXCEPT AS
PROHIBITED BY LAW, THE COMPANY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES.  THE COMPANY CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT, THE ISSUING
LENDER OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THEY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR THE LENDERS TO ENTER INTO THIS AGREEMENT AND TO MAKE THE LOANS AND OTHER
EXTENSIONS OF CREDIT.

 

SECTION 10.09.                           Severability.  In case any one or more of the provisions
contained in this Agreement, any Note or any other Loan Document should be
invalid, illegal or unenforceable in any respect in any jurisdiction, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby in such
jurisdiction nor shall such invalidity, illegality or unenforceability
invalidate such affected provision in any other jurisdiction.

 

SECTION 10.10.                           Right of Setoff.  The Company and the Guarantors hereby grant
to the Administrative Agent, the Issuing Lender, each Lender and each Affiliate
of each Lender, a continuing lien, security interest and right of setoff as
security for all liabilities and obligations to the Administrative Agent, the
Issuing Lender and each Lender, whether now existing or hereafter arising, upon
and against all deposits, credits, collateral and property, now or hereafter in
the possession, custody, safekeeping or control of the Administrative Agent,
the Issuing Lender, any Lender or any Affiliate of such Lender and their
respective successors or assigns or in transit to any of them.  At any time, without demand or notice (any
such notice being expressly waived by the Company), the Administrative Agent,
the Issuing Lender, each Lender and each Affiliate of 

 

H-65

 

each Lender may set off the same or any part thereof and apply the same
to any liability or obligation of the Company or any Guarantor even though
unmatured and regardless of the adequacy of any other collateral securing this
Agreement.  ANY AND ALL RIGHTS TO REQUIRE THE ADMINISTRATIVE AGENT, THE ISSUING
LENDER, EACH LENDER OR ANY AFFILIATE OF EACH LENDER TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THIS AGREEMENT,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE COMPANY OR ANY GUARANTOR, ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.

 

SECTION 10.11.                           Confidentiality.   Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information, materials and
documents furnished by the Company to the Administrative Agent and the Lenders
pursuant to this Agreement (the “Confidential Information”).  Notwithstanding the foregoing, such party
shall be permitted to disclose Confidential Information (a) to such of its
officers, directors, employees, agents, representatives and professional
advisors in any of the transactions contemplated by, or the administration of,
this Agreement; (b) to the extent such Confidential Information (i) becomes
publicly available other than as a result of a breach of this Section 10.11
by the disclosing party, or (ii) becomes available to such party on a
non-confidential basis from a source other than the Company or its Subsidiaries
which to such party’s knowledge is not prohibited from disclosing such
Confidential Information to such party by a contractual or other legal
obligation; (c) to the extent the Company or any of its Subsidiaries shall
have consented to such disclosure in writing; or (d) to any prospective
transferee or participant in connection with any contemplated transfer of the
Notes or any interest therein provided such transferee or participant agrees to
treat the Confidential Information in a manner consistent with this Section 10.11.  Nothing herein shall prohibit the disclosure
of Confidential Information required in connection with any litigation or where
such disclosure is required pursuant to applicable laws, regulations, court
order or similar legal process or requested by any governmental agency or
authority; provided, however, in the event that such party is requested or
required by law to disclose any of the Confidential Information, such party
shall provide the Company with written notice, unless notice is prohibited by
law, of any such request or requirement so that the Company may seek a
protective order or other appropriate remedy; provided that no such
notification shall be required in respect of any disclosure to regulatory
authorities having jurisdiction over such party.

 

SECTION 10.12.                           Headings.  Section headings used herein are for
convenience of reference only and are not to affect the construction of or be
taken into consideration in interpreting this Agreement.

 

SECTION 10.13.                           Construction.  This Agreement is the result of negotiations
between, and has been reviewed by, the Company, the Administrative Agent, the
Lenders and their respective counsel. 
Accordingly, this Agreement shall be deemed to be the product of each
party hereto, and no ambiguity shall be construed in favor of or against either
the Company, the Administrative Agent, or any Lender.

 

SECTION 10.14.                           Counterparts.  This Agreement may be executed in two or more

 

H-66

 

counterparts, each of which shall constitute an original, but all of
which, taken together, shall constitute one and the same instrument.

 

SECTION 10.15.                           Special
Provisions with Respect to Subordinated Notes.   The parties acknowledge and agree that the
indebtedness of the Company to the Lenders hereunder shall constitute “Designated
Senior Indebtedness” for purposes of the Indenture.

 

SECTION 10.16.                           US
Patriot Act.  Each Lender that is
subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”) hereby notifies the
Company that pursuant to the requirements of the Act, it is required to obtain,
verify and record information that identifies the Company, which information
includes the name and address of the Company and other information that will
allow such Lender to identify the Company in accordance with the Act.  The Company will provide such information and
take such actions as are reasonably requested by the Administrative Agent or
any Lender in order to assist such party in maintaining compliance with the
Act.

 

[next page is
signature page]

 

H-67

 

IN
WITNESS WHEREOF, the Company,
the Administrative Agent and the Lenders have caused this Agreement to be duly
executed by their duly authorized officers, as of the day and year first above
written.

 

 

	
   

  	
  VEECO INSTRUMENTS INC.

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  John F. Rein, Jr.

  	
   

  
	
   

  	
  Name:
  

  	
  John
  F. Rein, Jr.

  
	
   

  	
  Title:
  

  	
  Executive
  Vice President/Chief

  Financial Officer

  
					

 

H-68

 

	
  Revolving Credit

  	
   

  	
  HSBC BANK USA, NATIONAL

  
	
  Commitment: $25,000,000

  	
   

  	
  ASSOCIATION, as Administrative Agent, as a

  Lender, as Swingline Lender and as Issuing Lender

  

 

	
   

  	
  By:
  

  	
  /s/
  Christopher Mendelsohn

  	
   

  
	
   

  	
  Name:
  

  	
  Christopher
  Mendelsohn

  
	
   

  	
  Title:

  	
  First Vice President

  
					

 

 Lending
Office for Prime Rate Loans:

 

HSBC
Bank USA, National Association

Special
Lending Dept., 26th Floor

1
HSBC Center

Buffalo,
New York 14203

 

Lending
Office for Eurocurrency Loans:

 

HSBC
Bank USA, National Association

Special
Lending Dept., 26th Floor

1
HSBC Center

Buffalo,
New York 14203

 

Address
for Notices:

 

HSBC
Bank USA, National Association

534
Broad Hollow Road

Melville,
New York 11747

Attention:                                         Relationship Manager -

Veeco
Instruments Inc.

 Telecopy:                                        (631) 752-4340

 

H-69

 

	
  Revolving Credit

  	
   

  	
  THE BANK OF NEW YORK, as a Lender

  
	
  Commitment: $15,000,000

  	
   

  	
   

  

 

	
   

  	
  By:
  

  	
  /s/ William Ewing

  	
   

  
	
   

  	
  Name:
  

  	
  William Ewing

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

 Lending
Office for Prime Rate Loans:

 

The
Bank of New York

1401
Franklin Avenue

Garden
City, New York 11530

Attention:
Scott Kolark

 

Lending Office for Eurocurrency Loans:

 

The
Bank of New York

1401
Franklin Avenue

Garden
City, New York 11530

Attention: Scott Kolark

 

Address
for Notices:

 

The
Bank of New York

1401
Franklin Avenue

Garden
City, New York 11530

Attention:                                         Anita Schmidt, Relationship

Manager - Veeco Instruments Inc.

 Telecopy:                                        (516) 294-2055

 

H-70

 

	
  Revolving Credit

  	
   

  	
  NORTH FORK BANK, as a Lender

  
	
  Commitment: $10,000,000

  	
   

  	
   

  

 

	
   

  	
  By:
  

  	
  /s/ Robert J. Milas

  	
   

  
	
   

  	
  Name:
  

  	
  Robert J. Milas

  
	
   

  	
  Title:

  	
  Vice President

  
					

 

Lending Office for Prime
Rate Loans:

 

North Fork Bank

275 Broad Hollow Road

Melville, New York 11747

Attention:                                            Laura Lowy, Vice President

Telecopy No.:                     (631) 844-1459

 

Lending Office for
Eurocurrency Loans:

 

North Fork Bank

275 Broad Hollow Road

Melville, New York 11747

Attention:                                            Laura Lowy, Vice President

Telecopy No.:                     (631) 844-1459

 

Address for Notices:

 

North Fork Bank

275 Broad Hollow Road

Melville, New York 11747

Attention:                                         Kevin M. Brown, Senior

Vice President

Telecopy No.:                     (631) 501-4840

 

H-71

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