Document:

Exhibit 10.1

 

AMENDED AND RESTATED CREDIT
AGREEMENT

 

 

among

 

 

RBS GLOBAL, INC.,

 

 

REXNORD CORPORATION,

 

VARIOUS LENDERS,

 

 

DEUTSCHE BANK TRUST COMPANY
AMERICAS,

as ADMINISTRATIVE AGENT,

 

 

GENERAL ELECTRIC CAPITAL
CORPORATION

 

 

and

 

 

WACHOVIA BANK, NATIONAL
ASSOCIATION,

as Co-Documentation Agents,

 

 

and

 

 

DEUTSCHE BANK SECURITIES INC.

 

 

and

 

 

CREDIT SUISSE, 

as JOINT LEAD ARRANGERS and JOINT BOOK RUNNERS

 

 

Dated as of November 25,
2002 and

amended and restated as of May 16, 2005

 

 

 

TABLE OF
CONTENTS

 

	
  SECTION 1.

  	
  Amount and Terms of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.01

  	
   

  	
  Commitments

  	
   

  
	
  1.02

  	
   

  	
  Minimum Borrowing Amounts, etc.

  	
   

  
	
  1.03

  	
   

  	
  Notice of Borrowing

  	
   

  
	
  1.04

  	
   

  	
  Disbursement of Funds

  	
   

  
	
  1.05

  	
   

  	
  Notes

  	
   

  
	
  1.06

  	
   

  	
  Conversions

  	
   

  
	
  1.07

  	
   

  	
  Pro Rata Borrowings

  	
   

  
	
  1.08

  	
   

  	
  Interest

  	
   

  
	
  1.09

  	
   

  	
  Interest Periods

  	
   

  
	
  1.10

  	
   

  	
  Increased Costs, Illegality, etc.

  	
   

  
	
  1.11

  	
   

  	
  Compensation

  	
   

  
	
  1.12

  	
   

  	
  Change of Lending Office

  	
   

  
	
  1.13

  	
   

  	
  Replacement of Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  2.01

  	
   

  	
  Letters of Credit

  	
   

  
	
  2.02

  	
   

  	
  Letter of Credit Requests; Notices of
  Issuance

  	
   

  
	
  2.03

  	
   

  	
  Agreement to Repay Letter of Credit
  Drawings

  	
   

  
	
  2.04

  	
   

  	
  Letter of Credit Participations

  	
   

  
	
  2.05

  	
   

  	
  Increased Costs

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  Fees; Commitments

  	
   

  
	
   

  	
   

  
	
  3.01

  	
   

  	
  Fees

  	
   

  
	
  3.02

  	
   

  	
  Voluntary Reduction of Commitments

  	
   

  
	
  3.03

  	
   

  	
  Mandatory Reductions of Commitments, etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  Payments

  	
   

  
	
   

  	
   

  
	
  4.01

  	
   

  	
  Voluntary Prepayments

  	
   

  
	
  4.02

  	
   

  	
  Mandatory Prepayments

  	
   

  
	
  4.03

  	
   

  	
  Method and Place of Payment

  	
   

  
	
  4.04

  	
   

  	
  Net Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  Conditions Precedent

  	
   

  
	
   

  	
   

  
	
  5.01

  	
   

  	
  Conditions Precedent to the Restatement
  Effective Date and the Occurrence of Credit Events on Such Date

  	
   

  
	
  5.02

  	
   

  	
  Conditions Precedent to All Credit Events

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  Representations, Warranties and Agreements

  	
   

  
	
   

  	
   

  
	
  6.01

  	
   

  	
  Corporate Status

  	
   

  
					

 

i

 

	
  6.02

  	
   

  	
  Corporate Power and Authority

  	
   

  
	
  6.03

  	
   

  	
  No Violation

  	
   

  
	
  6.04

  	
   

  	
  Litigation

  	
   

  
	
  6.05

  	
   

  	
  Use of Proceeds; Margin Regulations

  	
   

  
	
  6.06

  	
   

  	
  Governmental Approvals

  	
   

  
	
  6.07

  	
   

  	
  Investment Company Act

  	
   

  
	
  6.08

  	
   

  	
  Public Utility Holding Company Act

  	
   

  
	
  6.09

  	
   

  	
  True and Complete Disclosure

  	
   

  
	
  6.10

  	
   

  	
  Financial Condition; Financial Statements

  	
   

  
	
  6.11

  	
   

  	
  Security Interests

  	
   

  
	
  6.12

  	
   

  	
  Tax Returns and Payments

  	
   

  
	
  6.13

  	
   

  	
  Compliance with ERISA

  	
   

  
	
  6.14

  	
   

  	
  Subsidiaries

  	
   

  
	
  6.15

  	
   

  	
  Intellectual Property

  	
   

  
	
  6.16

  	
   

  	
  Environmental Matters

  	
   

  
	
  6.17

  	
   

  	
  Properties

  	
   

  
	
  6.18

  	
   

  	
  Labor Relations

  	
   

  
	
  6.19

  	
   

  	
  Compliance with Statutes, etc.

  	
   

  
	
  6.20

  	
   

  	
  Subordination

  	
   

  
	
  6.21

  	
   

  	
  Capitalization

  	
   

  
	
  6.22

  	
   

  	
  Legal
  Names; Type of Organization (and Whether a Registered Organization);  Jurisdiction of Organization; etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  Affirmative Covenants

  	
   

  
	
   

  	
   

  
	
  7.01

  	
   

  	
  Information Covenants

  	
   

  
	
  7.02

  	
   

  	
  Books, Records and Inspections

  	
   

  
	
  7.03

  	
   

  	
  Insurance

  	
   

  
	
  7.04

  	
   

  	
  Payment of Taxes

  	
   

  
	
  7.05

  	
   

  	
  Corporate Franchises

  	
   

  
	
  7.06

  	
   

  	
  Compliance with Statutes, etc.

  	
   

  
	
  7.07

  	
   

  	
  ERISA

  	
   

  
	
  7.08

  	
   

  	
  Good Repair

  	
   

  
	
  7.09

  	
   

  	
  End of Fiscal Years; Fiscal Quarters

  	
   

  
	
  7.10

  	
   

  	
  New Subsidiaries; Additional Security;
  Further Assurances

  	
   

  
	
  7.11

  	
   

  	
  Compliance with Environmental Laws

  	
   

  
	
  7.12

  	
   

  	
  Permitted Acquisitions

  	
   

  
	
  7.13

  	
   

  	
  New Mortgages

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  Negative Covenants

  	
   

  
	
   

  	
   

  
	
  8.01

  	
   

  	
  Changes in Business

  	
   

  
	
  8.02

  	
   

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

  	
   

  
	
  8.03

  	
   

  	
  Liens

  	
   

  
	
  8.04

  	
   

  	
  Indebtedness

  	
   

  
	
  8.05

  	
   

  	
  Consolidated Capital Expenditures

  	
   

  
	
  8.06

  	
   

  	
  Advances, Investments and Loans

  	
   

  
	
  8.07

  	
   

  	
  Modifications; Prepayments; etc.

  	
   

  
						

 

ii

 

	
  8.08

  	
   

  	
  Dividends, etc.

  	
   

  
	
  8.09

  	
   

  	
  Transactions with Affiliates

  	
   

  
	
  8.10

  	
   

  	
  Consolidated Interest Coverage Ratio

  	
   

  
	
  8.11

  	
   

  	
  Consolidated Leverage Ratio

  	
   

  
	
  8.12

  	
   

  	
  Limitation On Issuance of Stock

  	
   

  
	
  8.13

  	
   

  	
  Change of
  Legal Names; Type of Organization (and Whether a Registered Organization);
  Jurisdiction of Organization; etc.

  	
   

  
	
  8.14

  	
   

  	
  No Designation of Other Indebtedness as
  “Designated Senior Indebtedness”

  	
   

  
	
  8.15

  	
   

  	
  Limitations on Restrictions Affecting
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  Events of Default

  	
   

  
	
   

  	
   

  
	
  9.01

  	
   

  	
  Payments

  	
   

  
	
  9.02

  	
   

  	
  Representations, etc.

  	
   

  
	
  9.03

  	
   

  	
  Covenants

  	
   

  
	
  9.04

  	
   

  	
  Default Under Other Agreements

  	
   

  
	
  9.05

  	
   

  	
  Bankruptcy, etc.

  	
   

  
	
  9.06

  	
   

  	
  ERISA

  	
   

  
	
  9.07

  	
   

  	
  Security Documents

  	
   

  
	
  9.08

  	
   

  	
  Guaranty

  	
   

  
	
  9.09

  	
   

  	
  Judgments

  	
   

  
	
  9.10

  	
   

  	
  Change of Control

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  Definitions and Accounting Terms

  	
   

  
	
   

  	
   

  
	
  10.01

  	
   

  	
  Defined Terms

  	
   

  
	
  10.02

  	
   

  	
  Certain Pro Forma Calculations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  The Agents

  	
   

  
	
   

  	
   

  
	
  11.01

  	
   

  	
  Appointment

  	
   

  
	
  11.02

  	
   

  	
  Nature of Duties

  	
   

  
	
  11.03

  	
   

  	
  Lack of Reliance on the Agents

  	
   

  
	
  11.04

  	
   

  	
  Certain Rights of the Agents

  	
   

  
	
  11.05

  	
   

  	
  Reliance

  	
   

  
	
  11.06

  	
   

  	
  Indemnification

  	
   

  
	
  11.07

  	
   

  	
  The Agents in Their Individual Capacity

  	
   

  
	
  11.08

  	
   

  	
  Holders

  	
   

  
	
  11.09

  	
   

  	
  Resignation

  	
   

  
	
  11.10

  	
   

  	
  Collateral Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.01

  	
   

  	
  Payment of Expenses, etc.

  	
   

  
	
  12.02

  	
   

  	
  Right of Setoff

  	
   

  
	
  12.03

  	
   

  	
  Notices

  	
   

  
	
  12.04

  	
   

  	
  Successors and Assigns

  	
   

  
	
  12.05

  	
   

  	
  No Waiver; Remedies Cumulative

  	
   

  
	
  12.06

  	
   

  	
  Payments Pro Rata

  	
   

  
						

 

iii

 

	
  12.07

  	
   

  	
  Calculations; Computations

  	
   

  
	
  12.08

  	
   

  	
  GOVERNING LAW; SUBMISSION TO JURISDICTION;
  VENUE; WAIVER OF JURY TRIAL.

  	
   

  
	
  12.09

  	
   

  	
  Counterparts

  	
   

  
	
  12.10

  	
   

  	
  Effectiveness

  	
   

  
	
  12.11

  	
   

  	
  Headings Descriptive

  	
   

  
	
  12.12

  	
   

  	
  Amendment or Waiver, etc.

  	
   

  
	
  12.13

  	
   

  	
  Survival

  	
   

  
	
  12.14

  	
   

  	
  Domicile of Loans

  	
   

  
	
  12.15

  	
   

  	
  Confidentiality

  	
   

  
	
  12.16

  	
   

  	
  Acquisition of Mecanica Falk S.A. de C.V.
  and Falk Shanghai Co., Ltd.

  	
   

  
	
  12.17

  	
   

  	
  Limitation on Certain Enforcement Actions

  	
   

  
	
  12.18

  	
   

  	
  USA Patriot Act

  	
   

  
	
  12.19

  	
   

  	
  Conversion of Currencies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  Holdings Guaranty

  	
   

  
	
   

  	
   

  
	
  13.01

  	
   

  	
  The Guaranty

  	
   

  
	
  13.02

  	
   

  	
  Bankruptcy

  	
   

  
	
  13.03

  	
   

  	
  Nature of Liability

  	
   

  
	
  13.04

  	
   

  	
  Independent Obligation

  	
   

  
	
  13.05

  	
   

  	
  Authorization

  	
   

  
	
  13.06

  	
   

  	
  Reliance

  	
   

  
	
  13.07

  	
   

  	
  Subordination

  	
   

  
	
  13.08

  	
   

  	
  Waiver

  	
   

  
	
  13.09

  	
   

  	
  Enforcement

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 1.01

  	
  —

  	
  Commitments

  	
   

  
	
  SCHEDULE 2.01(b)

  	
  —

  	
  Existing Letters of Credit

  	
   

  
	
  SCHEDULE 5.01(m)

  	
  —

  	
  Existing Indebtedness

  	
   

  
	
  SCHEDULE 6.13

  	
  —

  	
  ERISA Matters

  	
   

  
	
  SCHEDULE 6.14

  	
  —

  	
  Subsidiaries

  	
   

  
	
  SCHEDULE 6.17

  	
  —

  	
  Real Properties

  	
   

  
	
  SCHEDULE 6.22

  	
  —

  	
  Legal Names, Type of Organization,
  Jurisdiction of Organization

  	
   

  
	
  SCHEDULE 8.03(l)

  	
  —

  	
  Existing Liens

  	
   

  
	
  SCHEDULE 8.06(e)

  	
  —

  	
  Existing Investments

  	
   

  
	
  SCHEDULE 8.06(p)

  	
  —

  	
  Investments in connection with the Original
  Acquisition

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  —

  	
  Form of Notice of Borrowing

  	
   

  
	
  EXHIBIT B-1

  	
  —

  	
  Form of Term Note

  	
   

  
	
  EXHIBIT B-2

  	
  —

  	
  Form of Revolving Note

  	
   

  
	
  EXHIBIT B-3

  	
  —

  	
  Form of Swingline Note

  	
   

  
	
  EXHIBIT C

  	
  —

  	
  Form of Letter of Credit Request

  	
   

  
	
  EXHIBIT D

  	
  —

  	
  Form of Section 4.04 Certificate

  	
   

  
	
  EXHIBIT E

  	
  —

  	
  Form of Opinion of Latham &
  Watkins

  	
   

  
							

 

iv

 

	
  EXHIBIT F

  	
  —

  	
  Form of Officers’ Certificate

  	
   

  
	
  EXHIBIT G

  	
  —

  	
  Form of Pledge Agreement

  	
   

  
	
  EXHIBIT H

  	
  —

  	
  Form of Security Agreement

  	
   

  
	
  EXHIBIT I

  	
  —

  	
  Form of Solvency Certificate

  	
   

  
	
  EXHIBIT J

  	
  —

  	
  Form of Subsidiaries Guaranty

  	
   

  
	
  EXHIBIT K

  	
  —

  	
  Form of Joinder Agreement

  	
   

  
	
  EXHIBIT L

  	
  —

  	
  Form of Subordination Agreement

  	
   

  
	
  EXHIBIT M

  	
  —

  	
  Form of Assignment Agreement

  	
   

  
	
  EXHIBIT N

  	
  —

  	
  Form of Incremental Term Loan
  Commitment Agreement 

  	
   

  

 

v

 

AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of May 16, 2005, among RBS GLOBAL, INC., a Delaware corporation (“Holdings”),
REXNORD CORPORATION, a Delaware corporation (the “Borrower”), the Lenders party
hereto from time to time, DEUTSCHE BANK TRUST COMPANY AMERICAS, as
Administrative Agent (in such capacity, the “Administrative Agent”) GENERAL
ELECTRIC CAPITAL CORPORATION and WACHOVIA BANK, NATIONAL ASSOCIATION, as
Co-Documentation Agents, and DEUTSCHE BANK SECURITIES INC. and CREDIT SUISSE,
as Joint Lead Arrangers and Joint Book Runners (in such capacities, the “Joint
Lead Arrangers” and, each, a “Joint Lead Arranger”) (all capitalized terms used
herein and defined in Section 10 are used herein as therein defined).

 

W
I
T
N
E
S
S
E
T
H
:

 

WHEREAS, Holdings, the Borrower, the Existing
Lenders, the Administrative Agent, the Co-Documentation Agents and the Joint
Lead Arrangers are parties to a Credit Agreement, dated as of November 25,
2002 (as the same has been amended, modified or supplemented to, but not
including the Restatement Effective Date, the “Existing Credit Agreement”);

 

WHEREAS, the Borrower has requested that the
Existing Credit Agreement be amended and restated in its entirety, and certain
of the Lenders, the Joint Lead Arrangers and the Administrative Agent are
willing to amend and restate the same, upon the terms and conditions set forth
herein and in the Agreement to Amend and Restate;

 

NOW, THEREFORE, as provided in the Agreement
to Amend and Restate the parties thereto agreed that the Existing Credit
Agreement shall be and is hereby amended and restated in its entirety as
follows:

 

SECTION 1.   Amount and Terms of Credit.

 

1.01  Commitments.  (a)  (i) Subject to and upon
the terms and conditions set forth herein, (I) each Consenting Term Loan Lender
severally agrees that, on the Restatement Effective Date, the Existing Term
Loans made by such Consenting Term Loan Lender to the Borrower pursuant to the
Existing Credit Agreement and outstanding on the Restatement Effective Date
(immediately prior to giving effect thereto) as set forth on Schedule 1.01
hereto under the heading “Converted Existing Term Loans” shall convert (the “Existing
Term Loan Conversion”) into a new term loan owing by the Borrower (each such
term loan, a “Converted Existing Term Loan” and, collectively, the “Converted
Existing Term Loans”), and (II) each Lender with a New Term Loan Commitment
severally agrees to make, on the Restatement Effective Date, a new term loan or
term loans to the Borrower (each, a “New Term Loan” and, collectively, the “New
Term Loans” and, together with the Converted Existing Term Loans and the
Incremental Term Loans, the “Term Loans”), which (w) shall be denominated in
Dollars, (x) in the case of New Term Loans, shall be made pursuant to one
drawing on the Restatement Effective Date, (y) shall not exceed in aggregate
principal amount for any Lender at the time of the incurrence of the New Term
Loans that amount which equals the sum of (1) the aggregate principal
amount of Existing Term Loans, if any, made by such Lender and outstanding on
the Restatement Effective Date (immediately prior to giving effect thereto) and
(2) the New Term 

 

 

Loan Commitment, if any, of such Lender as in effect on the Restatement
Effective Date and (z) except as hereinafter provided, may, at the option of
the Borrower, be incurred and maintained as, and/or converted into, Base Rate
Loans or Eurodollar Loans, provided that (A) all Term Loans made as part
of the same Borrowing shall, unless specifically provided herein, consist of
Term Loans of the same Type and (B) unless either the Administrative Agent
and each Joint Lead Arranger otherwise agrees in their sole discretion or the
Syndication Date has occurred (at which time this clause (B) shall no
longer be applicable), prior to the 45th day following the
Restatement Effective Date, Term Loans may only be incurred and maintained as,
and/or converted into, Eurodollar Loans so long as all such outstanding
Eurodollar Loans are subject to a single Interest Period (which, unless the
Administrative Agent otherwise agrees in its sole discretion, may not begin
prior to the third Business Day after the Restatement Effective Date) of one
week, two weeks or one month which, in any such case, begins and ends on the
same day.  Once repaid, Term Loans may
not be reborrowed.

 

(ii)                                  In connection with
the Existing Term Loan Conversion and the incurrence of New Term Loans pursuant
to Section 1.01(a)(i), (w) proceeds from New Term Loans in excess of
$312,000,000 shall be utilized to repay outstanding Existing Term Loans of
Existing Lenders that are not Consenting Term Lenders, (x) the Interest Period
applicable to each Borrowing of Existing Term Loans existing on the Restatement
Effective Date immediately prior to the Existing Term Loan Conversion and
maintained as Eurodollar Loans under the Existing Credit Agreement shall,
simultaneously with the occurrence of the Existing Term Loan Conversion, be
broken, (y) the Administrative Agent shall (and is hereby authorized to) take
all appropriate actions to ensure that all Lenders with outstanding Term Loans
(after giving effect to the Existing Term Loan Conversion and the incurrence of
New Term Loans pursuant to this Section 1.01(a)(i)) participate in each
new Borrowing of Term Loans on a pro  rata basis (based upon the
principal amount of the Term Loans held by each such Lender (after giving
effect to the Restatement Effective Date) and (z) the Borrower shall be
obligated to pay to the respective Existing Lenders breakage or other costs of
the type referred to in Section 1.11 of the Existing Credit Agreement (if
any) incurred in connection with the Existing Term Loan Conversion and/or the
actions taken pursuant to preceding clause (y) of this Section 1.01(a)(ii).

 

(b)                                 Subject to and upon
the terms and conditions set forth herein, (I) each Existing Revolving
Commitment (as in effect on the Restatement Effective Date immediately prior to
giving effect thereto) of each Existing RF Lender is hereby converted on the
Restatement Effective Date into a Revolving Commitment of such Existing RF
Lender, and (II) each Existing RF Lender severally agrees (A) that, on the
Restatement Effective Date, each Existing Revolving Loan made by such Existing
RF Lender to the Borrower pursuant to the Existing Credit Agreement and
outstanding on the Restatement Effective Date shall convert into a revolving
loan owing by the Borrower (each, a “Converted Revolving Loan” and,
collectively, the “Converted Revolving Loans”) and (B) to make, at any
time and from time to time on and after the Restatement Effective Date and
prior to the RF Maturity Date, a revolving loan or revolving loans to the
Borrower (together with each Converted Revolving Loan, each a “Revolving Loan”
and, collectively, the “Revolving Loans”) which Revolving Loans (i) except
as hereinafter provided, may, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that all Revolving Loans made as part of the same Borrowing shall,
unless otherwise specifically provided herein, consist of Revolving Loans of
the same Type, (ii) may be repaid and reborrowed in accordance with the
provisions 

 

2

 

hereof, (iii) shall be denominated in Dollars and (iv) shall
not exceed (giving effect to any incurrence thereof and the use of the proceeds
of such incurrence) for any Lender in aggregate principal amount at any time
outstanding that amount which, when combined with such Lender’s Adjusted RF
Percentage of the sum of (x) the Letter of Credit Outstandings at such time and
(y) the outstanding principal amount of Swingline Loans at such time, equals
the Revolving Commitment of such Lender.

 

(c)                                  (I) On the
Restatement Effective Date, the Existing Swingline Loans (if any) made by the
Swingline Lender to the Borrower pursuant to the Existing Credit Agreement and
outstanding on the Restatement Effective Date (immediately prior to giving
effect thereto) shall be converted to a swingline loan or swingline loans to
the Borrower and (II) subject to and upon the terms and conditions herein set
forth, the Swingline Lender agrees to make at any time and from time to time on
and after the Restatement Effective Date and prior to the Swingline Expiry
Date, a revolving loan or revolving loans (together with the Existing Swingline
Loans continued pursuant to preceding clause (I), the “Swingline Loans”
and, each a “Swingline Loan”) to the Borrower, which Swingline Loans (i) shall
be made and maintained as Base Rate Loans, (ii) may be repaid and
reborrowed in accordance with the provisions hereof, (iii) shall be
denominated in Dollars, (iv) shall not exceed (giving effect to any
incurrence thereof and the use of the proceeds of such incurrence) in aggregate
principal amount at any time outstanding that amount which, when combined with
the aggregate principal amount of all Revolving Loans made by Non-Defaulting
Lenders then outstanding and the Letter of Credit Outstandings at such time,
equals the Adjusted Total Revolving Commitment then in effect (after giving
effect to any changes on such date) and (v) shall not exceed in aggregate
principal amount at any time outstanding the Maximum Swingline Amount.  Notwithstanding anything to the contrary
contained in this Section 1.01(c), the Swingline Lender shall not make any
Swingline Loan after it has received written notice from the Required Lenders
stating that one or more of the applicable conditions to Credit Events
specified in Section 5 are not then satisfied until such time as all such
conditions are satisfied.

 

(d)                                 On any Business Day,
the Swingline Lender may, in its sole discretion, give notice to the RF Lenders
that its outstanding Swingline Loans shall be funded with a Borrowing of
Revolving Loans (provided that each such notice shall be deemed to have
been automatically given upon the occurrence of an Event of Default under Section 9.05
or upon the exercise of any of the remedies provided in the last paragraph of Section 9),
in which case a Borrowing of Revolving Loans constituting Base Rate Loans (each
such Borrowing, a “Mandatory Borrowing”) shall be made on the immediately
succeeding Business Day by all RF Lenders pro  rata based on each
RF Lender’s Adjusted RF Percentage, and the proceeds thereof shall be applied
directly to repay the Swingline Lender for such outstanding Swingline
Loans.  Each RF Lender hereby irrevocably
agrees to make Base Rate Loans upon one Business Day’s prior notice pursuant to
each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the date specified in writing by the Swingline Lender
notwithstanding:  (i) that the
amount of the Mandatory Borrowing may not comply with the Minimum Borrowing
Amount otherwise required hereunder, (ii) whether any conditions specified
in Section 5.02 are then satisfied, (iii) whether a Default or an
Event of Default has occurred and is continuing, (iv) the date of such
Mandatory Borrowing and (v) the amount of the Total Revolving Commitment
at such time.  In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a

 

3

 

result of the commencement of a proceeding under the Bankruptcy Code in
respect of the Borrower), each RF Lender hereby agrees that it shall forthwith
purchase from the Swingline Lender (without recourse or warranty) such
assignment of the outstanding Swingline Loans as shall be necessary to cause
the RF Lenders to share in such Swingline Loans ratably based upon their
respective Adjusted RF Percentages, provided that all interest payable
on the Swingline Loans shall be for the account of the Swingline Lender until
the date the respective assignment is purchased and, to the extent attributable
to the purchased assignment, shall be payable to the RF Lender purchasing same
from and after such date of purchase.

 

(e)                                  Subject to Section 1.14,
the other terms and conditions set forth herein and the relevant Incremental
Term Loan Commitment Agreement, each Lender with an Incremental Term Loan
Commitment severally agrees to make a term loan or term loans (each, an “Incremental
Term Loan” and, collectively, the “Incremental Term Loans”) to the Borrower,
which Incremental Term Loans: (i) only may be incurred on one or more
Incremental Term Loan Borrowing Dates (which dates, in any event (x) shall not
be earlier than the Syndication Date and (y) shall not be later than the RF
Maturity Date); (ii) except as hereafter provided, shall, at the option of
the Borrower, be incurred and maintained as, and/or converted into, Base Rate
Loans or Eurodollar Loans, provided that all Incremental Term Loans made
as part of the same Borrowing shall, unless otherwise specifically provided
herein, consist of Incremental Term Loans of the same Type; (iii) shall be
made by each such Lender in that aggregate principal amount which does not
exceed the Incremental Term Loan Commitment of such Lender (as set forth in the
relevant Incremental Term Loan Commitment Agreement) on the respective Incremental
Term Loan Borrowing Date, (iv) shall be added to then outstanding
borrowings of Term Loans as provided in Section 1.14(c) and (v) shall
not exceed $75,000,000 in aggregate principal amount for all Incremental Term
Loans made by all Incremental Term Loan Lenders pursuant to this Agreement and
the various Incremental Term Loan Commitment Agreements.  Once prepaid or repaid, Incremental Term
Loans may not be reborrowed.

 

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

 

1.03  Notice
of Borrowing.  (a)  Whenever
the Borrower desires to incur Loans under any Facility (excluding Borrowings of
Swingline Loans and Mandatory Borrowings), it shall give the Administrative
Agent at the Notice Office, prior to 12:00 Noon (New York time), at least three
Business Days’ prior written notice (or telephonic notice promptly confirmed in
writing) of each proposed incurrence of Eurodollar Loans and at least one
Business Day’s prior written notice (or telephonic notice promptly confirmed in
writing) of each proposed incurrence of Base Rate Loans.  Each such notice (each, a “Notice of
Borrowing”) shall be substantially in the form of Exhibit A and shall be
irrevocable and shall specify (i) the Facility pursuant to which such
incurrence is being made, (ii) the aggregate principal amount of the Loans
to be made pursuant to such incurrence, (iii) the date of incurrence
(which shall be a Business Day) and (iv) whether the respective Borrowing
shall consist of Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans,
the Interest Period to be initially applicable thereto.  The Administrative Agent shall promptly give
each Lender with commitments pursuant to the respective Facility written notice
(or telephonic notice promptly confirmed in writing) of each proposed
incurrence 

 

4

 

of Loans, of such Lender’s proportionate share thereof and of the other
matters covered by the Notice of Borrowing.

 

(b)                                 (i)  Whenever
the Borrower desires to make a Borrowing of Swingline Loans hereunder, it shall
give the Swingline Lender, prior to 2:00 P.M. (New York time) on the day
such Swingline Loan is to be made, written notice (or telephonic notice
promptly confirmed in writing) of each Swingline Loan to be made
hereunder.  Each such notice shall be irrevocable
and shall specify in each case (x) the date of such Borrowing (which shall be a
Business Day) and (y) the aggregate principal amount of the Swingline Loan to
be made pursuant to such Borrowing.

 

(ii)                                  Mandatory Borrowings
shall be made upon the notice specified in Section 1.01(d), with the
Borrower irrevocably agreeing, by its incurrence of any Swingline Loan, to the
making of Mandatory Borrowings as set forth in such Section 1.01(d).

 

(c)                                  Without in any way
limiting the obligation of the Borrower to confirm in writing any telephonic
notice permitted to be given hereunder, the Administrative Agent, the Swingline
Lender (in the case of a Borrowing of Swingline Loans), or the respective
Letter of Credit Issuer (in the case of the issuance of Letters of Credit), as
the case may be, may prior to receipt of written confirmation act without
liability upon the basis of and consistent with such telephonic notice,
believed by the Administrative Agent, the Swingline Lender or the respective
Letter of Credit Issuer in good faith to be from an Authorized Officer of the
Borrower.  In each such case, the
Borrower hereby waives the right to dispute the Administrative Agent’s, the
Swingline Lender’s or the respective Letter of Credit Issuer’s record of the
terms of such telephonic notice, unless such record reflects gross negligence
or willful misconduct on the part of the Administrative Agent, the Swingline
Lender or the respective Letter of Credit Issuer, as the case may be.

 

1.04  Disbursement
of Funds.  (a)  No later
than 1:00 P.M. (New York time) on the date specified in each Notice of
Borrowing or 4:00 P.M. (New York time) on the date specified in a notice
described in Section 1.03(b)(i), each Lender with a Commitment under the
respective Facility will make available its pro  rata share of
each Borrowing requested to be made on such date or in the case of Swingline
Loans, the Swingline Lender shall make available the full amount thereof in the
manner provided below.  All such amounts
shall be made available to the Administrative Agent in Dollars and immediately
available funds at the Payment Office and the Administrative Agent promptly
will make available to the Borrower by depositing to its account at the Payment
Office or as otherwise directed in the applicable Notice of Borrowing the
aggregate of the amounts so made available in the type of funds received.  Unless the Administrative Agent shall have
been notified by any Lender prior to the date of the proposed incurrence that
such Lender does not intend to make available to the Administrative Agent its
portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date, and the Administrative Agent, in
reliance upon such assumption, may (in its sole discretion and without any
obligation to do so) make available to the Borrower a corresponding
amount.  If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender and the
Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Lender.

 

5

 

If such Lender does not pay such corresponding amount forthwith upon
the Administrative Agent’s demand therefor, the Administrative Agent may notify
the Borrower, and, upon receipt of such notice, the Borrower shall promptly pay
such corresponding amount to the Administrative Agent.  The Administrative Agent shall also be
entitled to recover on demand from such Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by such Lender,
the overnight Federal Funds Effective Rate for the first three days and at the
interest rate otherwise applicable to such Loans for each day thereafter or (y)
if paid by the Borrower, the then applicable rate of interest, calculated in
accordance with Section 1.08, for the respective Loans.

 

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

 

1.05  Notes.  (a)  The Borrower’s obligation to
pay the principal of, and interest on, the Loans made to it by each Lender
shall be evidenced in the Lender Register maintained by the Administrative
Agent pursuant to Section 12.04(c) and, if requested by such Lender,
shall also be evidenced (i) if Term Loans, by a promissory note
substantially in the form of Exhibit B-1 with blanks appropriately
completed in conformity herewith (each, a “ Term Note” and, collectively,
the “ Term Notes”), (ii) if Revolving Loans, by a promissory note
substantially in the form of Exhibit B-2 with blanks appropriately
completed in conformity herewith (each, a “Revolving Note” and, collectively,
the “Revolving Notes”), and (iii) if Swingline Loans, by a promissory note
substantially in the form of Exhibit B-3, with blanks appropriately
completed in conformity herewith (the “Swingline Note”).

 

(b)                                 The Term Note issued
to each Lender requesting same that has a New Term Loan Commitment, an
Incremental Term Loan Commitment or outstanding Term Loans shall (i) be
executed by the Borrower, (ii) be payable to the Lender or its registered
assigns and be dated the Restatement Effective Date (or, if issued after the
Restatement Effective Date, be dated the date of issuance thereof), (iii) be
in a stated principal amount equal to the sum of (x) the aggregate principal
amount of Existing Term Loans held by each Lender and (y) the New Term
Loan Commitment of such Lender (or, if issued after the Restatement Effective
Date, be in a stated principal amount equal to the sum of (x) the aggregate
principal amount of Term Loans held by such Lender and (y) the Incremental Term
Loan Commitment (if any) of such Lender) and be payable in the principal amount
of Term Loans evidenced thereby, (iv) mature on the Term Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08
in respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other
Credit Documents.

 

(c)                                  The Revolving Note
issued to each RF Lender requesting same shall (i) be executed by the
Borrower, (ii) be payable to the RF Lender or its registered assigns and
be dated the Restatement Effective Date (or, if issued after the Restatement
Effective Date, be dated the date of issuance thereof), (iii) be in a
stated principal amount equal to the Revolving Commitment of such RF Lender and
be payable in the principal amount of the Revolving Loans evidenced thereby, (iv) mature
on the RF Maturity Date, (v) bear interest as provided in the

 

 

6

 

appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.

 

(d)                                 The Swingline Note
issued to the Swingline Lender (if requested) shall (i) be executed by the
Borrower, (ii) be payable to the Swingline Lender or its registered
assigns and be dated the Restatement Effective Date (or, if issued after the
Restatement Effective Date, be dated the date of issuance thereof), (iii) be
in a stated principal amount equal to the Maximum Swingline Amount and be
payable in the principal amount of Swingline Loans evidenced thereby, (iv) mature
on the Swingline Expiry Date, (v) bear interest as provided in Section 1.08
in respect of the Base Rate Loans evidenced thereby, (vi) be subject to
mandatory prepayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.

 

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

 

(f)                                    Notwithstanding
anything to the contrary contained above in this Section 1.05 or elsewhere
in this Agreement, Notes shall only be delivered to Lenders which at any time
specifically request the delivery of such Notes.  No failure of any Lender to request or obtain
a Note evidencing its Loans to the Borrower shall affect or in any manner
impair the obligations of the Borrower to pay the Loans (and all related
Obligations) incurred by the Borrower which would otherwise be evidenced
thereby in accordance with the requirements of this Agreement, and shall not in
any way affect the security or guaranties therefor provided pursuant to the
various Credit Documents.  Any Lender
which does not have a Note evidencing its outstanding Loans shall in no event
be required to make the notations otherwise described in preceding clause
(e).  At any time when any Lender
requests the delivery of a Note to evidence any of its Loans, the Borrower
shall promptly execute and deliver to the respective Lender the requested Note
in the appropriate amount or amounts to evidence such Loans.

 

1.06  Conversions.  The Borrower shall have the option to convert
on any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Loans (other than
Swingline Loans which at all times shall be maintained as Base Rate Loans)
owing pursuant to a single Facility into a Borrowing or Borrowings pursuant to
such Facility of another Type of Loan provided that (i) no partial
conversion of a Borrowing of Eurodollar Loans shall reduce the outstanding
principal amount of the Eurodollar Loans made pursuant to such Borrowing to
less than the Minimum Borrowing Amount applicable thereto, (ii) Base Rate
Loans may not be converted into Eurodollar Loans when a Default under Section 9.01
or 9.05 or an Event of Default is in existence on the date of the proposed
conversion if the Administrative Agent or the Required Lenders shall have
determined in its or their sole discretion not to permit such conversion, (iii) Borrowings
of Eurodollar Loans resulting from this Section 1.06 shall be limited in
number as provided in Section 1.02, (iv) unless the Administrative
Agent otherwise agrees in its sole discretion, conversions may not be effected
pursuant to this Section 1.06 which result in Term Loans that 

 

7

 

are maintained as Eurodollar
Loans having an Interest Period beginning prior to the third Business Day after
the Restatement Effective Date and (v) until the 45th day
following the Restatement Effective Date, unless the Administrative Agent and
each Joint Lead Arranger otherwise agrees in their sole discretion or the
Syndication Date has occurred, any conversions of Term Loans that are
maintained as Base Rate Loans into Eurodollar Loans shall be subject to the
applicable requirements contained in clause (B) of the proviso to Section 1.01(a)(i).  Each such conversion shall be effected by the
Borrower giving the Administrative Agent at its Notice Office, prior to 12:00
Noon (New York time), at least three Business Days’ (or one Business Day’s,
in the case of a conversion into Base Rate Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each, a “Notice of Conversion”)
specifying the Loans to be so converted (including the relevant Facility), the
Type of Loans to be converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable thereto.  The Administrative Agent shall give each
Lender prompt notice of any such proposed conversion affecting any of its
Loans.

 

1.07  Pro
Rata Borrowings.  All Loans under
this Agreement (other than Swingline Loans) shall be made by the Lenders pro
rata on the basis of their respective Commitments, provided, that
each Mandatory Borrowing shall be funded by the RF Lenders on the basis of
their Adjusted RF Percentages.  It is
understood that no Lender shall be responsible for any default by any other
Lender in its obligation to make Loans hereunder and that each Lender shall be
obligated to make the Loans provided to be made by it hereunder, regardless of
the failure of any other Lender to fulfill its commitments hereunder.

 

1.08  Interest.  (a)  The unpaid principal amount of
each Base Rate Loan shall bear interest from the date of the Borrowing thereof
until the earlier of repayment or conversion thereof and maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Margin plus the Base Rate in effect from time to time.

 

(b)                                 The unpaid principal
amount of each Eurodollar Loan shall bear interest from the date of the
Borrowing thereof until the earlier of repayment or conversion thereof and
maturity (whether by acceleration or otherwise) at a rate per annum which shall
at all times be the Applicable Margin plus the relevant Eurodollar Rate.

 

(c)                                  All overdue principal
and, to the extent permitted by law, overdue interest in respect of each Loan
shall in each case, bear interest at a rate per annum equal to the greater of
(x) the rate which is 2% in excess of the rate then borne by such Loans and (y)
the rate which is 2% in excess of the rate otherwise applicable to Base Rate
Loans of the respective Facility from time to time, and all other overdue amounts
payable hereunder and under any other Credit Document shall bear interest at a
rate per annum equal to the rate which is 2% in excess of the rate applicable
to Revolving Loans that are maintained as Base Rate Loans from time to time.  Interest that accrues under this Section 1.08(c) shall
be payable on demand.

 

(d)                                 Interest shall accrue
from and including the date of any Borrowing to but excluding the date of any
repayment thereof and shall be payable (i) in respect of each Base Rate
Loan, (x) quarterly in arrears on the first Business Day of each January,
April, July and October, (y) on the date of any repayment or prepayment in
full of all outstanding Base Rate Loans of any Facility (but in the case of any
such repayment or prepayment in full of all outstanding 

 

8

 

Revolving Loans maintained as Base Rate Loans, only if the Total
Revolving Commitment is contemporaneously terminated in its entirety), and (z)
at maturity (whether by acceleration or otherwise) and, after such maturity, on
demand, and (ii) in respect of each Eurodollar Loan, (x) on the last
day of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three month intervals
after the first day of such Interest Period and (y) on the date of any
prepayment or conversion (on the amount prepaid or converted), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.

 

(e)                                  All computations of interest
hereunder shall be made in accordance with Section 12.07(b).

 

(f)                                    The Administrative
Agent, upon determining the interest rate for any Borrowing of Eurodollar Loans
for any Interest Period, shall promptly notify the Borrower and the Lenders
thereof.

 

1.09  Interest
Periods.  (a)  At the time
the Borrower gives a Notice of Borrowing or Notice of Conversion in respect of
the making of, or conversion into, a Borrowing of Eurodollar Loans (in the case
of the initial Interest Period applicable thereto) or prior to 12:00 Noon (New
York time) on the third Business Day prior to the expiration of an Interest
Period applicable to a Borrowing of Eurodollar Loans, it shall have the right
to elect by giving the Administrative Agent written notice (or telephonic notice
promptly confirmed in writing) of the Interest Period applicable to such
Borrowing, which Interest Period shall, at the option of the Borrower (but
otherwise subject to the provisions of clause (B) of the proviso to Section 1.01(a)(i)),
be a one, two, three, six or, to the extent agreed to by all Lenders with a
Commitment or outstanding Loans under the respective Facility, nine or twelve
month period or, to the extent the provisions of clause (B) of the proviso
to Section 1.01(a)(ii) are applicable (and subject to compliance with
such provisions), a one week, two week or one month period.  Notwithstanding anything to the contrary
contained above:

 

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

 

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

 

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

 

9

 

(iv)                              no Interest Period with
respect to a Borrowing of Loans shall extend beyond the respective Maturity
Date therefor;

 

(v)                                 no Interest Period
with respect to any Term Loans may be elected that would extend beyond any date
upon which a Scheduled Repayment is required to be made in respect of such Term
Loans if, after giving effect to the selection of such Interest Period, the
aggregate principal amount of Term Loans maintained as Eurodollar Loans with
Interest Periods ending after such date would exceed the aggregate principal
amount of Term Loans permitted to be outstanding after such Scheduled
Repayment; and

 

(vi)                              no Interest Period may be
elected at any time when a Default under Section 9.01 or 9.05 or an Event
of Default is then in existence if the Administrative Agent or the Required
Lenders shall have determined in its or their sole discretion not to permit
such election.

 

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

 

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

 

(i)                                     on any date for
determining the Eurodollar Rate for any Interest Period that, by reason of any
changes arising after the Determination Date affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar Rate or
the making or continuance of any Eurodollar Loan has become impracticable as a
result of a contingency occurring after the Determination Date which materially
and adversely affects the interbank Eurodollar market;

 

(ii)                                  at any time, that
such Lender shall incur increased costs or reductions in the amounts received
or receivable hereunder with respect to any Eurodollar Loans (other than taxes
addressed in Section 4.04 and any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change in
the rate of taxes on the net income or net profits of such Lender imposed by
the jurisdiction in which its principal office or applicable lending office is
located) because of (x) any change since the Determination Date in any
applicable law, governmental rule, regulation, guideline or order (or in the
interpretation or administration thereof and including the introduction of any
new law or governmental rule, regulation, guideline or order) (such as, for example,
but not limited to, a change in the basis of taxation of payments to a Lender
of the principal of or interest on the Eurodollar Loans or any other amounts
payable hereunder or official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate) and/or (y) 

 

10

 

other circumstances arising after the
Determination Date affecting the interbank Eurodollar market or the position of
such Lender in such market; or

 

(iii)                               at any time, that the
making or continuance of any Eurodollar Loan has become unlawful by compliance
by such Lender in good faith with any law, governmental rule, regulation,
guideline or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law but with which such
Lender customarily complies even though the failure to comply therewith would
not be unlawful);

 

then, and in any such event, such Lender (or the Administrative Agent
in the case of clause (i) above) shall (x) on such date and (y) within ten
Business Days of the date on which such event no longer exists give notice (by
telephone confirmed in writing) to the Borrower and to the Administrative Agent
of such determination (which notice the Administrative Agent shall promptly
transmit to each of the other Lenders). 
Thereafter (x) in the case of clause (i) above, Eurodollar Loans
shall no longer be available until such time as the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to
such notice by the Administrative Agent no longer exist, and any Notice of
Borrowing or Notice of Conversion given by the Borrower with respect to
Eurodollar Loans which have not yet been incurred shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay
to such Lender, within 10 Business Days after Borrower’s receipt of written
demand therefor, such additional amounts (in the form of an increased rate of,
or a different method of calculating, interest or otherwise as such Lender in
its reasonable discretion shall determine after consultation with the Borrower)
as shall be required to compensate such Lender for such increased costs or
reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Lender, describing the basis for such increased
costs and showing the calculation thereof, submitted to the Borrower by such
Lender shall, absent manifest error, be final and conclusive and binding upon
all parties hereto) and (z) in the case of clause (iii) above, the
Borrower shall take one of the actions specified in Section 1.10(b) as
promptly as possible and, in any event, within the time period required by law.

 

(b)                                 At any time that any
Eurodollar Loan is affected by the circumstances described in Section 1.10(a)(ii),
the Borrower may (and in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii),
the Borrower shall within the time period required by law) either (x) if the
affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel
said Borrowing by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to Section 1.10(a)(ii) or (iii), or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days’
notice to the Administrative Agent, require the affected Lender to convert each
such Eurodollar Loan into a Base Rate Loan (which conversion, in the case of
the circumstances described in Section 1.10(a)(iii), shall occur no later
than the last day of the Interest Period then applicable to such Eurodollar
Loan (or such earlier date as shall be required by applicable law)); provided,
that if more than one Lender is affected at any time, then all affected Lenders
must be treated the same pursuant to this Section 1.10(b).  Each Lender, upon determining in good faith
that any additional amounts will be payable pursuant to this Section 1.10(b),
will give prompt written notice thereof to the Borrower, which notice shall set
forth the basis of the calculation of such additional amounts, although the
failure to give any such notice shall not release or 

 

11

 

diminish the Borrower’s obligations to pay additional amounts pursuant
to this Section 1.10(b) upon the subsequent receipt of such notice.

 

(c)                                  If any Lender shall
have determined that the adoption or initial effectiveness of any applicable
law, rule or regulation regarding capital adequacy, or any change therein,
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, in each case after the Determination
Date, or compliance by such Lender or its parent corporation with any request
or directive regarding capital adequacy (whether or not having the force of
law) of any such authority, central bank or comparable agency first made after
the Determination Date, has or would have the effect of reducing the rate of
return on such Lender’s or its parent corporation’s capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender or its parent corporation could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender’s or its parent corporation’s policies with respect to capital
adequacy), then from time to time, within 10 Business Days after demand by such
Lender (with a copy to the Administrative Agent), the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
its parent corporation for such reduction. 
Each Lender, upon determining in good faith that any additional amounts
will be payable pursuant to this Section 1.10(c), will give prompt written
notice thereof to the Borrower, which notice shall describe the basis for such
claim and set forth in reasonable detail the calculation of such additional
amounts, although the failure to give any such notice shall not release or
diminish any of the Borrower’s obligations to pay additional amounts pursuant
to this Section 1.10(c) upon the subsequent receipt of such notice.

 

1.11  Compensation.  (a)  The Borrower shall compensate
each Lender, upon its written request (which request shall set forth the basis
for requesting such compensation and reasonably detailed calculations thereof),
for all reasonable losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its Eurodollar Loans but excluding in any event the loss of anticipated
profits) which such Lender may actually sustain:  (i) if for any reason (other than a
default by such Lender or the Administrative Agent) a Borrowing of Eurodollar
Loans does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment,
repayment or conversion of any of its Eurodollar Loans occurs on a date which
is not the last day of an Interest Period applicable thereto; (iii) if any
prepayment of any of its Eurodollar Loans is not made on any date specified in
a notice of prepayment given by the Borrower; or (iv) as a consequence of
(x) any other default by the Borrower to repay its Eurodollar Loans when
required by the terms of this Agreement or (y) an election made pursuant to Section 1.10(b) or
(z) the early termination of an, or the funding of a shortened, Interest Period
(other than an Interest Period elected pursuant to Section 1.09(a) which
may be required by any Lender in connection with any assignment effected after
the Restatement Effective Date and on or prior to the first to occur of the 45th
day after the Restatement Effective Date and the Syndication Date).

 

(b)                                 Notwithstanding
anything in this Agreement to the contrary, to the extent any notice or request
required by Section 1.10, 1.11, 2.05 or 4.04 is given by any Lender more 

 

12

 

than 180 days after such Lender obtained, or reasonably should have
obtained, knowledge of the occurrence of the event giving rise to the
additional costs, reductions in amounts, losses, taxes or other additional
amounts of the type described in such Section, such Lender shall not be
entitled to compensation under Section 1.10, 1.11, 2.05 or 4.04 for any
amounts incurred or accruing prior to the date on which such notice is given to
the Borrower.

 

1.12  Change
of Lending Office.  Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Lender, it will, if requested
by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any
Loans or Letter of Credit participations affected by such event, provided
that such designation is made on such terms that such Lender and its lending
office, in its determination, suffer no material economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such Section. 
Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in Section 1.10,
2.05 or 4.04.

 

1.13  Replacement
of Lenders.  (x) Upon the occurrence
of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 1.11, Section 2.05 or Section 4.04
with respect to any Lender which results in such Lender charging to the
Borrower increased costs materially in excess of those being charged generally
by the Lenders, (y) if a Lender becomes a Defaulting Lender and/or (z) in the
case of a refusal by a Lender to consent to a proposed change, waiver,
discharge or termination with respect to this Agreement which has been approved
by the Required Lenders, the Borrower shall have the right to replace such
Lender (the “Replaced Lender”) with one or more other Eligible Transferee or
Transferees, none of whom shall constitute a Defaulting Lender at the time of
such replacement (collectively, the “Replacement Lender”) reasonably acceptable
to the Administrative Agent, or, in the case of a replacement as provided in Section 12.04(b) where
the consent of the respective Lender is required with respect to less than all
of its Loans or Commitments, to replace the Commitments and/or outstanding
Loans of such Lender in respect of each Facility where the consent of such
Lender would otherwise be individually required, with identical Commitments
and/or Loans of each such Facility provided by the Replacement Lender, provided
that (i) at the time of any replacement pursuant to this Section 1.13,
the Replacement Lender shall enter into one or more Assignment Agreements pursuant
to Section 12.04(b) (and with all fees payable pursuant to said Section 12.04(b) to
be paid by the Replacement Lender) pursuant to which the Replacement Lender
shall acquire all of the Commitments and outstanding Loans (or, in the case of
the replacement of only (a) the Revolving Commitment, the Revolving
Commitment and outstanding Revolving Loans and participations in Letter of
Credit Outstandings and/or (b) the outstanding Term Loans, the outstanding
Term Loans) of, and in each case (except for the replacement of only the
outstanding Term Loans of the Replaced Lender) participations in Letters of
Credit by, the Replaced Lender and, in connection therewith, shall pay to (x)
the Replaced Lender an amount equal to the sum of (A) an amount equal to
the principal of, and all accrued and unpaid interest on, all outstanding Loans
of the Replaced Lender under each Facility with respect to which such Lender is
being replaced, (B) in the case of any replacement of Revolving
Commitments, an amount equal to all Unpaid Drawings that have been funded by
(and not reimbursed to) such Replaced Lender, together with all accrued and
unpaid interest with respect thereto at such time and (C) an amount equal
to all accrued and unpaid Fees owing to the 

 

13

 

Replaced Lender pursuant to Section 3.01 (but only with respect to
the relevant Facility, in the case of the replacement of less than all
Facilities of Loans then held by the respective Replaced Lender), (y) in the
case of any replacement of Revolving Commitments, each Letter of Credit Issuer
an amount equal to such Replaced Lender’s Adjusted RF Percentage (for this
purpose, and for the purpose of clause (z) below, determined as if the
adjustment described in clause (y) of the immediately succeeding sentence had
been made with respect to such Replaced Lender) of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Lender and (z) in the case of any
replacement of Revolving Commitments, the Swingline Lender, any portion of a
Mandatory Borrowing as to which the Replaced Lender is then in default, and (ii) all
obligations of the Borrower owing to the Replaced Lender (other (x) than those
specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid or (y)
relating to any Facility of Loans and/or Commitments of the respective Replaced
Lender which will remain outstanding after giving effect to the respective
replacement) shall be paid in full to such Replaced Lender by the Borrower
concurrently with such replacement.  Upon
the execution of the respective Assignment Agreements, the payment of amounts
referred to in clauses (i) and (ii) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes executed by the Borrower, (x) the Replacement Lender shall become a
Lender hereunder and, unless the respective Replaced Lender continues to have
outstanding Term Loans and/or a Revolving Loan Commitment hereunder, the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions applicable to the Replaced Lender under
this Agreement, which shall survive as to such Replaced Lender and (y) except
in the case of (I) a replacement of a Defaulting Lender with a
Non-Defaulting Lender or (II) the replacement of only outstanding Term
Loans pursuant to this Section 1.13, the Adjusted RF Percentages of the
respective Lenders and the Adjusted Total Revolving Commitment shall be
automatically adjusted at such time to give effect to such replacement.

 

1.14  Incremental Term Loan
Commitments.  (a)  So long
as no Default or Event of Default then exists or would result therefrom, the
Borrower shall have the right to request on one or more occasions on or after
the Syndication Date and prior to the RF Maturity Date that one or more Lenders
and/or one or more other Eligible Transferees provide Incremental Term Loan
Commitments and, subject to the terms and conditions contained in this
Agreement and the relevant Incremental Term Loan Commitment Agreement, make
Incremental Term Loans, pursuant thereto, it being understood and agreed,
however, that:

 

(i)                                     no Lender shall be
obligated to provide an Incremental Term Loan Commitment as a result of any
such request by the Borrower, and until such time, if any, as such Lender has
agreed in its sole discretion to provide an Incremental Term Loan Commitment
and executed and delivered to the Administrative Agent an Incremental Term Loan
Commitment Agreement as provided in clause (b) of this Section 1.14,
such Lender shall not be obligated to fund any Incremental Term Loans;

 

(ii)                                  any Lender or other
Eligible Transferee may so provide an Incremental Term Loan Commitment without
the consent of any other Lender;

 

14

 

(iii)                               each provision of
Incremental Term Loan Commitments pursuant to this Section 1.14 on a given
date pursuant to a particular Incremental Term Loan Commitment Agreement shall
be in a minimum aggregate amount (for all Lenders and other Eligible
Transferees who will become Lenders pursuant thereto) of $10,000,000;

 

(iv)                              the aggregate amount of
all Incremental Term Loan Commitments permitted to be provided pursuant to this
Section 1.14 shall not exceed $75,000,000;

 

(v)                                 each Lender agreeing
to provide an Incremental Term Loan Commitment pursuant to an Incremental Term
Loan Commitment Agreement shall, subject to the satisfaction of the relevant
conditions set forth in this Agreement, make Incremental Term Loans as provided
in Section 1.01(e) and such Loans shall thereafter be deemed to be
Term Loans for all purposes of this Agreement and the other Credit Documents;

 

(vi)                              the fees and interest to
be paid to any Eligible Transferees other than then Existing Lenders that have
been requested by the Borrower to provide Incremental Term Loan Commitments
shall be no greater than that to be paid to (or which was offered to) to the
then Existing Lenders providing (or which were requested to provide) any such
requested Incremental Term Loan Commitments);

 

(vii)                           all Incremental Term Loans
to be incurred pursuant to Incremental Term Loan Commitments provided in
response to a particular request for same made by the Borrower in accordance
with clause (b) of this Section 1.14 shall be incurred pursuant to a
single Incremental Term Loan Commitment Agreement, which may be executed in
counterparts;

 

(viii)                        the Borrower shall be in compliance
with the Financial Covenants (calculated on a Post-Test Period Pro  Forma
Basis and assuming that all Incremental Term Loans to be incurred pursuant to
such Incremental Term Loan Commitments (and any other then existing Incremental
Term Loan Commitments) have been incurred and the proceeds thereof applied in a
manner as certified to by an Authorized Officer of the Borrower to the
Administrative Agent) at such time; and

 

(ix)                                all actions taken by
the Borrower pursuant to this Section 1.14 shall be taken in coordination
with the Administrative Agent.

 

(b)                                 At the time of any
provision of Incremental Term Loan Commitments pursuant to this Section 1.14,
(i) the Borrower, and each Lender or other Eligible Transferee which
agrees to provide an Incremental Term Loan Commitment (each an “Incremental
Term Loan Lender”) shall execute (which execution may be in counterparts) and
deliver to the Administrative Agent an Incremental Term Loan Commitment
Agreement (it being understood that a single Incremental Term Loan Commitment
Agreement shall be executed and delivered by all Incremental Term Loan Lenders
providing Incremental Term Loan Commitments in response to a particular request
for same made by the Borrower) substantially in the form of Exhibit C
(appropriately completed and with such modifications as may be reasonably
acceptable to the Administrative Agent and the Borrower), with the
effectiveness of the Incremental Term Loan Commitment(s) provided therein to
occur on the date set forth in such Incremental Term Loan 

 

15

 

Commitment Agreement and the payment of any fees required in connection
therewith; (ii) Holdings and its Subsidiaries shall have delivered such
amendments, modifications and/or supplements to the Security Documents (if any)
as are necessary or, in the reasonable opinion of the Administrative Agent,
desirable to ensure that the additional Obligations to be incurred pursuant to
the Incremental Term Loan Commitments are secured by, and entitled to the benefits
of, the Security Documents; (iii) the Administrative Agent shall receive
an acknowledgment from the Credit Parties that the Incremental Term Loans to be
incurred pursuant to such Incremental Term Loan Commitments are entitled to the
benefits of the Guaranties and the Security Documents; (iv) the
Administrative Agent shall have received evidence reasonably satisfactory to it
that the additional Obligations to be incurred pursuant to the Incremental Term
Loan Commitments are permitted by, and constitute “Senior Indebtedness” and “Designated
Senior Indebtedness” under, the Senior Subordinated Note Indenture (or any
replacement indenture governing any Refinancing Indebtedness outstanding under Section 8.04(e));
and (v) the Borrower shall deliver to the Administrative Agent an opinion
or opinions, in form and substance reasonably satisfactory to the
Administrative Agent, from counsel to the Borrower reasonably satisfactory to
the Administrative Agent and dated such date, covering such matters as the Administrative
Agent may reasonably request.  The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Incremental Term Loan Commitment Agreement, and shall deliver to each
Lender a copy of same, and (i) at such time Schedule I shall be
deemed modified to reflect the Incremental Term Loan Commitments of the
respective Incremental Term Loan Lenders and (ii) to the extent requested
by such Incremental Term Loan Lenders, Term Notes will be issued, at the
Borrower’s expense, to such Incremental Term Loan Lenders, to be consistent
with the requirements of Section 1.05 (with appropriate modifications, to
the extent needed) to reflect the Incremental Term Loans made by such
Incremental Term Loan Lenders or Lender, as the case may be.

 

(c)                                  The Incremental Term
Loans made pursuant to each Incremental Term Loan Commitment Agreement shall
constitute part of, and be added to, the Facility comprising the Term Loans
and, consequently:

 

(i)                                     such Incremental
Term Loans shall have the same Maturity Date and shall bear interest at the
same rates (i.e., have the same Applicable Margins) applicable to Term
Loans;

 

(ii)                                  the Incremental Term
Loans shall have the same Scheduled Repayment dates as then remain with respect
to the Term Loans (with the amount of each Scheduled Repayment applicable to
such Incremental Term Loans to be the same (on a proportionate basis) as is
theretofore applicable to the Term Loans, thereby increasing the amount of each
then remaining Scheduled Repayment proportionately; and

 

(iii)                               on the date of the
making of such Incremental Term Loans, and notwithstanding anything to the
contrary set forth in Section 1.09, same shall be added to (and form part
of) each Borrowing of outstanding Term Loans on a pro  rata basis
(based on the relative sizes of the various outstanding Borrowings), so that
each Lender will participate proportionately in each then outstanding Borrowing
of Term Loans, and so that the Existing Lenders having then outstanding Term
Loans continue to have the same 

 

16

 

participation (by amount) in each Borrowing
of Term Loans as they had before the making of such Incremental Term Loans.

 

To the extent the provisions of preceding
clause (iii) require that Lenders making such Incremental Term Loans add
same to then outstanding Borrowings of Eurodollar Loans, it is acknowledged
that the effect thereof may result in such Incremental Term Loans having short
Interest Periods (i.e., an Interest Period that began during an Interest
Period then applicable to outstanding Eurodollar Loans and which will end on
the last day of such Interest Period). 
In connection therewith, the Borrower may agree, in the respective
Incremental Term Loan Commitment Agreement, to compensate the Incremental Term
Loan Lenders making such Incremental Term Loans for funding Eurodollar Loans
during an existing Interest Period on such basis as may be agreed to by the
Borrower and the respective Incremental Term Loan Lender or Incremental Term
Loan Lenders.

 

SECTION 2.   Letters
of Credit.

 

2.01  Letters
of Credit.  (a)  Subject to
and upon the terms and conditions herein set forth, the Borrower may request of
any Letter of Credit Issuer at any time and from time to time on or after the
Restatement Effective Date and prior to the tenth Business Day prior to the RF
Maturity Date that it issue, for the account of the Borrower (x) trade letters
of credit in support of trade obligations of the Borrower and its Subsidiaries
incurred in the ordinary course of business (such letters of credit issued for
such purposes, “Trade Letters of Credit”) and (y) standby letters of credit
issued for any other lawful purposes of the Borrower and its Subsidiaries (such
letters of credit issued for such purposes, “Standby Letters of Credit”), and
subject to and upon the terms and conditions herein set forth, each Letter of
Credit Issuer agrees to issue from time to time following its receipt of the
respective Letter of Credit Request to it, irrevocable letters of credit
denominated in Dollars or an Alternate Currency and issued on a sight basis
only, in such form as may be approved by the respective Letter of Credit Issuer
and the Administrative Agent.  “Letters
of Credit” shall include Trade Letters of Credit, Standby Letters of Credit and
Existing Letters of Credit.

 

(b)                                 Schedule 2.01(b) hereto
contains a description of certain letters of credit issued (or deemed issued)
pursuant to the Existing Credit Agreement and outstanding on the Restatement
Effective Date (and setting forth, with respect to each such letter of credit, (i) the
name of the issuing lender, (ii) the letter of credit number, (iii) the
name(s) of the account party or account parties, (iv) the Stated Amount
(including the currency in which such letter of credit is denominated, which
shall be Dollars or an Alternate Currency), (v) the name of the
beneficiary, (vi) the expiry date and (vii) whether such letter of
credit constitutes a standby letter of credit or a trade letter of
credit).  Each such letter of credit,
including any extension or renewal thereof (each, as amended from time to time
in accordance with the terms thereof and hereof, an “Existing Letter of Credit”)
shall constitute a “Letter of Credit” for all purposes of this Agreement,
issued, for purposes of Section 2.04(a), on the Restatement Effective
Date.  Any Lender hereunder which has
issued an Existing Letter of Credit shall constitute a “Letter of Credit Issuer”
for all purposes of this Agreement.

 

(c)                                  Notwithstanding the
foregoing, (i) no Letter of Credit shall be issued if after giving effect
thereto the aggregate amount of the Letter of Credit Outstandings at such time 

 

17

 

would exceed either (x) $25,000,000 or (y) when added to the sum of (I)
the aggregate principal amount of all Revolving Loans made by Non-Defaulting
Lenders then outstanding, plus (II) the aggregate principal amount of all
Swingline Loans then outstanding, an amount equal to the Adjusted Total
Revolving Commitment at such time; (ii) no Letter of Credit denominated in
an Alternate Currency shall be issued if after giving effect thereto the
aggregate amount of the Letter of Credit Outstandings with respect to all
Letters of Credit denominated in an Alternate Currency would exceed $7,500,000;
(iii) each Standby Letter of Credit shall have an expiry date occurring
not later than 12 months after such Letter of Credit’s date of issuance
although any Standby Letter of Credit may be extendable for successive periods
of up to 12 months, but not beyond the tenth Business Day next preceding the RF
Maturity Date, on terms acceptable to the respective Letter of Credit Issuer
and in no event shall any Standby Letter of Credit have an expiry date
occurring later than the tenth Business Day next preceding the RF Maturity
Date; (iv) each Trade Letter of Credit shall have an expiry date occurring
not later than (x) 180 days after such Letter of Credit’s date of issuance or
(y) the date ten Business Days prior to the RF Maturity Date; and (v) each
Letter of Credit issued to support obligations of any Foreign Subsidiary shall
be deemed to constitute a Contingent Obligation pursuant to Section 8.04(k)
and shall only be permitted to be issued if in accordance with the requirements
of said Section 8.04(k).

 

2.02  Letter
of Credit Requests; Notices of Issuance. 
(a)  Whenever it desires that a Letter of Credit be issued,
the Borrower shall give the Administrative Agent and the respective Letter of
Credit Issuer written notice thereof (including by way of facsimile transmission)
substantially in the form of Exhibit C, appropriately completed (each, a “Letter
of Credit Request”), prior to 1:00 P.M. (New York time) at least two
Business Days (or such shorter period as may be acceptable to the respective
Letter of Credit Issuer) prior to the proposed date of issuance (which shall be
a Business Day), which Letter of Credit Request shall include any other
documents that the respective Letter of Credit Issuer customarily requires in
connection therewith.

 

(b)                                 The making of each Letter
of Credit Request shall be deemed to be a representation and warranty by the
Borrower to the Lenders that such Letter of Credit may be issued in accordance
with, and will not violate the requirements of, Section 2.01.  Notwithstanding anything to the contrary
contained in this Section 2, no Letter of Credit Issuer shall issue any
Letters of Credit after it has received written notice from the Required
Lenders stating that one or more of the applicable conditions to Credit Events
specified in Section 5 are not then satisfied until such time as all such
conditions are satisfied.  Upon the
issuance of or modification or amendment to any Standby Letter of Credit, the
respective Letter of Credit Issuer shall promptly notify the Borrower and the
Administrative Agent, in writing of such issuance, modification or amendment
and such notice shall be accompanied by a copy of such Letter of Credit or the
respective modification or amendment thereto, as the case may be.  Promptly after receipt of such notice the Administrative
Agent shall notify the Participants, in writing, of such issuance, modification
or amendment.  On the first Business Day
of each week, each Letter of Credit Issuer shall furnish the Administrative
Agent with a written (including via facsimile) report of the daily aggregate
outstandings of Trade Letters of Credit issued by the such Letter of Credit
Issuer for the immediately preceding week.

 

18

 

2.03  Agreement
to Repay Letter of Credit Drawings.  (a)  The
Borrower hereby agrees to reimburse each Letter of Credit Issuer, by making
payment to the Administrative Agent at the Payment Office, for any payment or
disbursement made by such Letter of Credit Issuer under any Letter of Credit
(each such amount (calculated using the Dollar Equivalent thereof in the case
of any payment or disbursement made in an Alternate Currency) so paid or
disbursed until reimbursed, with Revolving Loan proceeds or otherwise, an “Unpaid
Drawing”) promptly after, and in any event within three Business Days after the
date on which, the Borrower is notified by such Letter of Credit Issuer of such
payment or disbursement with interest on the amount so paid or disbursed by
such Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M.
(New York time) on the date of such payment or disbursement, from and including
the date paid or disbursed to but not including the date such Letter of Credit
Issuer is reimbursed therefor at a rate per annum which shall be the Base Rate
plus the Applicable Margin for Revolving Loans maintained as Base Rate Loans as
in effect from time to time (plus an additional 2% per annum if not reimbursed
by the third Business Day after the date of such notice of payment or
disbursement), such interest also to be payable on demand.

 

(b)                                 The Borrower’s
obligation under this Section 2.03 to reimburse each Letter of Credit
Issuer with respect to Unpaid Drawings (including, in each case, interest
thereon) shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against such Letter of Credit Issuer, the
Administrative Agent or any Lender, including, without limitation, any defense
based upon the failure of any drawing under a Letter of Credit to conform
substantially to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such drawing, provided
that the Borrower shall not be obligated to reimburse such Letter of Credit
Issuer for any wrongful payment made by such Letter of Credit Issuer under a
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Letter of Credit Issuer.

 

2.04  Letter
of Credit Participations.  (a)  Immediately
upon the issuance by any Letter of Credit Issuer of any Letter of Credit, such
Letter of Credit Issuer shall be deemed to have sold and transferred to each
other RF Lender, and each such RF Lender (each, a “Participant”) shall be
deemed irrevocably and unconditionally to have purchased and received from such
Letter of Credit Issuer, without recourse or warranty, an undivided interest
and participation, to the extent of such Participant’s Adjusted RF Percentage,
in such Letter of Credit, each substitute letter of credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with
respect thereto (although the Letter of Credit Fee shall be payable directly to
the Administrative Agent for the account of the RF Lenders as provided in Section 3.01(b) and
the Participants shall have no right to receive any portion of any Facing Fees)
and any security therefor or guaranty pertaining thereto.  Upon any change in the Adjusted RF
Percentages pursuant to Section 1.13 and/or 12.04(b) and/or as a
result of a Lender Default, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 2.04 to reflect
the new Adjusted RF Percentages of all of the Lenders with Revolving
Commitments as a result thereof.

 

(b)                                 In determining whether
to pay under any Letter of Credit, no Letter of Credit Issuer shall have any
obligation relative to the Participants other than to determine that 

 

19

 

any documents required to be delivered under such Letter of Credit have
been delivered and that they substantially comply on their face with the
requirements of such Letter of Credit. 
Any action taken or omitted to be taken by any Letter of Credit Issuer
under or in connection with any Letter of Credit if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for such
Letter of Credit Issuer any resulting liability.

 

(c)                                  In the event that any
Letter of Credit Issuer makes any payment under any Letter of Credit and the
Borrower shall not have reimbursed such amount in full to such Letter of Credit
Issuer pursuant to Section 2.03(a), such Letter of Credit Issuer shall
promptly notify the Administrative Agent, and the Administrative Agent shall
promptly notify each Participant of such failure, and each Participant shall
promptly and unconditionally pay to the Administrative Agent for the account of
such Letter of Credit Issuer, the amount of such Participant’s Adjusted RF
Percentage of such Unpaid Drawing in Dollars and in same day funds provided
that no Participant shall be obligated to pay to the Administrative Agent its
Adjusted RF Percentage of such unreimbursed amount for any wrongful payment
made by such Letter of Credit Issuer under a Letter of Credit as a result of
acts or omissions constituting willful misconduct or gross negligence on the
part of such Letter of Credit Issuer.  If
the Administrative Agent so notifies any Participant prior to 11:00 A.M.
(New York time) on any Business Day, such Participant shall make available to
the Administrative Agent, such Participant’s Adjusted RF Percentage of the amount
of such Unpaid Drawing on such Business Day in same day funds.  If and to the extent such Participant shall
not have so made its Adjusted RF Percentage of the amount of such Unpaid
Drawing available to the Administrative Agent, such Participant agrees to pay
to the Administrative Agent for the account of such Letter of Credit Issuer,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is so paid to the Administrative
Agent at the overnight Federal Funds Effective Rate for the first three days
and at the interest rate applicable to Revolving Loans that are maintained as
Base Rate Loans for each day thereafter. 
The failure of any Participant to so pay to the Administrative Agent its
Adjusted RF Percentage of any Unpaid Drawing shall not relieve any other
Participant of its obligation hereunder to so pay to the Administrative Agent
its Adjusted RF Percentage of any Unpaid Drawing on the date required, as
specified above, but no Participant shall be responsible for the failure of any
other Participant to so pay to the Administrative Agent such other Participant’s
Adjusted RF Percentage of any such payment.

 

(d)                                 Whenever any Letter of
Credit Issuer receives a payment of a reimbursement obligation (or interest
thereon) as to which the Administrative Agent has received for the account of
such Letter of Credit Issuer any payments from the Participants pursuant to
clause (c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Adjusted RF Percentage thereof, in Dollars and
in same day funds, an amount equal to such Participant’s Adjusted RF Percentage
of the principal amount thereof and interest thereon accruing after the
purchase of the respective participations.

 

(e)                                  The obligations of
the Participants to make payments to the Administrative Agent for the account
of each Letter of Credit Issuer with respect to Letters of Credit issued by
such Letter of Credit Issuer shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever (provided that no Participant shall be required to make payments
resulting from the respective Letter of Credit 

 

20

 

Issuer’s gross negligence or willful misconduct) and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:

 

(i)                                     any lack of
validity or enforceability of this Agreement or any of the other Credit
Documents;

 

(ii)                                  the existence of any
claim, set-off, defense or other right which any Credit Party or any of their
Subsidiaries may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, any Joint Lead Arranger,
any Letter of Credit Issuer, any Lender or other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction between the
Borrower and the beneficiary named in any such Letter of Credit);

 

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

 

(iv)                              the surrender or impairment
of any security for the performance or observance of any of the terms of any of
the Credit Documents; or

 

(v)                                 the occurrence of any
Default or Event of Default.

 

(f)                                    To the extent the
respective Letter of Credit Issuer is not indemnified by the Borrower, the
Participants will reimburse and indemnify such Letter of Credit Issuer, in
proportion to their respective RF Percentages, for and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by such Letter of Credit Issuer
in performing its respective duties in any way relating to or arising out of
its issuance of Letters of Credit; provided that no Participant shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Letter of Credit Issuer’s gross negligence or willful
misconduct.

 

2.05  Increased
Costs.  If at any time after the
Determination Date, the adoption or initial effectiveness of any applicable
law, rule or regulation, or any change therein, 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 Letter of Credit Issuer or any Participant with
any request or directive (whether or not having the force of law) first made by
any such authority, central bank or comparable agency, in each case after the
Determination Date, shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by any Letter of Credit Issuer or any Participant’s participation
therein, or (ii) shall impose on any Letter of Credit Issuer or any
Participant any other conditions affecting this Agreement, any Letter of Credit
or any Participant’s participation therein; and the result of any 

 

21

 

of the foregoing is to increase the cost to such Letter of Credit
Issuer or such Participant of issuing, maintaining or participating in any
Letter of Credit, or to reduce the amount of any sum received or receivable by
such Letter of Credit Issuer or such Participant hereunder (other than taxes
addressed in Section 4.04 and any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change in the
rate of taxes on the net income or net profits of such Lender imposed by the
jurisdiction in which its principal office or applicable lending office is
located), then, within 10 Business Days of Borrower’s receipt of a written
demand to the Borrower by such Letter of Credit Issuer or such Participant (a
copy of which notice shall be sent by such Letter of Credit Issuer or such
Participant to the Administrative Agent), the Borrower shall pay to such Letter
of Credit Issuer or such Participant such additional amount or amounts as will
compensate such Letter of Credit Issuer or such Participant for such increased
cost or reduction.  A certificate
submitted to the Borrower by such Letter of Credit Issuer or such Participant,
as the case may be (a copy of which certificate shall be sent by such Letter of
Credit Issuer or such Participant to the Administrative Agent), setting forth
the basis for, and reasonably detailed calculations of, the determination of
such additional amount or amounts necessary to compensate such Letter of Credit
Issuer or such Participant as aforesaid shall be conclusive and binding on the
Borrower absent manifest error, although the failure to deliver any such
certificate shall not release or diminish any of the Borrower’s obligations to
pay additional amounts pursuant to this Section 2.05 upon the subsequent
receipt thereof.

 

SECTION 3.   Fees;
Commitments.

 

3.01  Fees.  (a)  The Borrower agrees to pay to
the Administrative Agent a commitment commission (“Commitment Commission”) for
the account of each RF Lender that is a Non-Defaulting Lender for the period
from and including the Restatement Effective Date to but not including the date
upon which the Total Revolving Commitment has been terminated, computed at a
rate per annum equal to 1⁄2 of 1% of the Unutilized Revolving Commitment of such
Non-Defaulting Lender as in effect from time to time.  Such Commitment Commission shall be due and
payable in arrears on the first Business Day of each January, April, July and
October and on the date upon which the Total Revolving Commitment is
terminated.

 

(b)                                 The Borrower agrees to
pay to the Administrative Agent for distribution to each Non-Defaulting Lender
with an Incremental Term Loan Commitment such up-front fees and other amounts,
if any, as are specified in the Incremental Term Loan Commitment Agreement
pursuant to which such Incremental Term Loan Commitment has been provided, with
such up-front fees and other amounts, if any, to be payable at the times set
forth in such Incremental Term Loan Commitment Agreement.

 

(c)                                  The Borrower agrees
to pay to the Administrative Agent, for the account of each RF Lender, pro
rata on the basis of their respective Adjusted RF Percentages, a fee in
respect of each Letter of Credit (the “Letter of Credit Fee”) for the period
from and including the date of issuance of such Letter of Credit to and
including the date of termination or expiration of such Letter of Credit,
computed at a rate per annum equal to the Applicable Margin as in effect from
time to time during such period with respect to Revolving Loans that are
maintained as Eurodollar Loans on the daily Stated Amount of each such Letter
of Credit.  Accrued Letter of Credit Fees
shall be due and payable quarterly in arrears on the first Business Day of each

 

22

 

January, April, July and October of each year and on the
first day on or after the termination of the Total Revolving Commitment upon
which no Letters of Credit remain outstanding.

 

(d)                                 The Borrower agrees to
pay to the respective Letter of Credit Issuer a fee in respect of each Letter
of Credit issued by it (the “Facing Fee”) for the period from and including the
date of issuance of such Letter of Credit to and including the date of
termination or expiration of such Letter of Credit, computed for each day
during such period at the rate of 1/4 of 1% per annum on the Stated Amount of
such Letter of Credit as in effect from time to time; provided that in
any event the minimum amount of Facing Fees payable in any twelve-month period
for any Letter of Credit shall not be less than $500; it being agreed that, on
the day of issuance of any Letter of Credit and on each anniversary thereof
prior to the termination or expiration of such Letter of Credit, if $500 will exceed
the amount of Facing Fees that will accrue with respect to such Letter of
Credit for the immediately succeeding twelve-month period, $125 shall be
payable in respect of such Letter of Credit on each date on which Facing Fees
are required to be paid pursuant to this clause (c) during such 12-month
period (and, if the Total Revolving Commitment terminates before the end of
such 12 month period, on the date of such termination there shall be paid an
amount equal to the amount by which $500 exceeds the Facing Fees actually paid
with respect to such Letter of Credit since the date of the issuance thereof
or, if later, the last anniversary of such issuance which has theretofore
occurred).  Accrued Facing Fees shall be
due and payable quarterly in arrears on the first Business Day of each January,
April, July and October of each year and on the first day on or after
the termination of the Total Revolving Commitment upon which no Letters of
Credit remain outstanding.

 

(e)                                  The Borrower agrees
to pay directly to the respective Letter of Credit Issuer upon each issuance
of, payment under, and/or amendment of, a Letter of Credit such amount as shall
at the time of such issuance, payment or amendment be the administrative charge
which such Letter of Credit Issuer is customarily charging for issuances of,
payments under or amendments of, letters of credit issued by it.

 

(f)                                    The Borrower shall
pay to the Joint Lead Arrangers and the Administrative Agent for their
respective accounts, such fees as may be agreed to by the Borrower and such
Persons.

 

(g)                                 All computations of
Fees shall be made in accordance with Section 12.07(b).

 

3.02  Voluntary
Reduction of Commitments.  (a)  Upon
at least one Business Day’s prior written notice (or telephonic notice
confirmed in writing) to the Administrative Agent at the Notice Office (which
notice shall be deemed to be given on a certain day only if given before 2:00 P.M.
(New York time) on such day and shall be promptly transmitted by the
Administrative Agent to each of the Lenders), the Borrower shall have the
right, without premium or penalty, to terminate or partially reduce the Total
Unutilized Revolving Commitment provided that (x) any such partial reduction
shall apply to proportionately and permanently reduce the Revolving Commitment
of each RF Lender, (y) no such reduction shall reduce any Non-Defaulting
Lender’s Revolving Commitment in an amount greater than the then Unutilized
Revolving Commitment of such Lender and (z) any partial reduction pursuant to
this Section 3.02 shall be in the amount of at least $1,000,000.

 

23

 

(b)                                 In the event of a
refusal by a Lender to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Lenders as (and to the extent) provided in Section 12.12(b), the
Borrower may, subject to its compliance with the requirements of Section 12.12(b),
upon five Business Days’ prior written notice to the Administrative Agent at
the Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Lenders) terminate all of the Commitments of such
Lender, so long as all Loans, together with accrued and unpaid interest, Fees
and all other amounts, owing to such Lender are repaid concurrently with the
effectiveness of such termination pursuant to Section 4.01(b) (at
which time Schedule I shall be deemed modified to reflect such changed
amounts, and the Adjusted RF Percentages of the various RF Lenders shall be automatically
adjusted to give effect to such changes) and any mandatory repayments required
pursuant to Section 4.02(A)(a) as a result of the changes to the
Adjusted RF Percentages of the various RF Lenders are made, and at such time,
such Lender shall no longer constitute a “Lender” for purposes of this
Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.05, 4.04, 11.06 and
12.01), which shall survive as to such repaid Lender.

 

3.03  Mandatory
Reductions of Commitments, etc.  (a)  The
Total New Term Loan Commitment (and the New Term Loan Commitment of each
Lender) shall terminate in its entirety on the Expiration Date unless the
Restatement Effective Date shall have occurred on or prior to such date, and in
the event of such termination this Agreement shall cease to be of any force or
effect and the Existing Credit Agreement (and all loans and commitments to
extend credit thereunder in accordance with the terms thereof) shall continue
to be effective, as the same may have been or may thereafter be, amended,
modified or supplemented from time to time.

 

(b)                                 In addition to any
other mandatory commitment reductions pursuant to this Section 3.03, the
Total New Term Loan Commitment (and the New Term Loan Commitment of each
Lender) shall terminate in its entirety on the Restatement Effective Date
(after giving effect to the making of the New Term Loans on such date).

 

(c)                                  The Total Revolving
Commitment (and the Revolving Commitment of each Lender) shall terminate in its
entirety on the RF Maturity Date.

 

(d)                                 In addition to any
other mandatory commitment reductions pursuant to this Section 3.03, (i) the
Incremental Term Loan Commitment of each Lender provided pursuant to a
particular Incremental Term Loan Commitment Agreement shall be permanently
reduced on each Incremental Term Loan Borrowing Date on which Incremental Term
Loans are incurred pursuant to such Incremental Term Loan Commitment Agreement
in an amount equal to the aggregate principal amount of Incremental Term Loans
made by such Lender pursuant to such Incremental Term Loan Commitment Agreement
on such date, and (ii) the Incremental Term Loan Commitment of each Lender
provided pursuant to a particular Incremental Term Loan Commitment Agreement
shall terminate at 5:00 P.M. (New York City time) on the earlier of
(I) the date specified in such Incremental Term Loan Commitment Agreement
and (II) the RF Maturity Date (whether or not any Incremental Term Loans are
incurred on either such date).

 

(e)                                  The Total Revolving
Commitment shall be reduced on each day on which Term Loans are required to be
repaid (or would be required to be repaid if Term Loans were then 

 

24

 

outstanding) pursuant to Section 4.02(A)(c), (d) and/or (f) by
the amount, if any, by which the amount required to be applied to repay
outstanding principal of Term Loans pursuant to Section 4.02(B)(a) as
a result thereof (determined as if an unlimited amount of Term Loans were actually
outstanding) exceeds the aggregate principal amount of Term Loans actually
outstanding on such date.

 

SECTION 4.   Payments.

 

4.01  Voluntary
Prepayments.  (a)  The
Borrower shall have the right to prepay Loans in whole or in part, without
premium or, except as provided in Section 1.11(a), penalty, from time to
time on the following terms and conditions: 
(i) the Borrower shall give the Administrative Agent at the Payment
Office written notice (or telephonic notice promptly confirmed in writing) of
its intent to prepay the Loans, whether such Loans are Term Loans, Revolving
Loans or Swingline Loans, the amount of such prepayment and (A) in the
case of Eurodollar Loans, the specific Borrowing(s) pursuant to which made and (B) in
the case of Term Loans, the manner in which such prepayment shall be applied to
the then remaining Scheduled Repayments to repay outstanding principal of Term
Loans, which notice shall be given by the Borrower prior to 3:00 P.M. (New
York time) on (x) the Business Day prior to the date of such prepayment in the
case of prepayments of Base Rate Loans (or on the same day of such prepayment
in the case of prepayments of Swingline Loans) or (y) three Business Days prior
to the date of such prepayment in the case of prepayments of Eurodollar Loans,
and which notice shall, except in the case of a prepayment of Swingline Loans,
promptly be transmitted by the Administrative Agent to each of the Lenders; (ii) (x) each
partial prepayment of any Borrowing (other than a Borrowing of Swingline Loans)
shall be in an aggregate principal amount of at least $500,000 and (y) each
partial prepayment of Swingline Loans shall be in an aggregate principal amount
of at least $100,000, provided that no partial prepayment of Eurodollar Loans
made pursuant to a Borrowing shall reduce the aggregate principal amount of the
Loans outstanding pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount applicable thereto; (iii) each prepayment in respect of
any Loans made pursuant to a Borrowing shall be applied pro  rata
among such Loans, provided that at the Borrower’s election in connection with
any prepayment of Revolving Loans pursuant to this Section 4.01, such
prepayment shall not be applied to any Revolving Loans of a Defaulting Lender;
and (iv) each prepayment of Term Loans pursuant to this Section 4.01
shall be applied to reduce the then remaining Scheduled Repayments in the
manner directed by the Borrower to the Administrative Agent in writing as
provided above, provided that if no such written direction is given with
respect to the application of any such prepayment of Term Loans, such
prepayment shall be applied (x) first, in direct order of maturity to those
Scheduled Repayments which will be due and payable within 24 months after the date
of such prepayment and (y) second, to the extent in excess thereof, to the then
remaining Scheduled Repayments on a pro  rata basis (based on the
then remaining unpaid principal amount of such Scheduled Repayments after
giving effect to all prior reductions thereto).

 

(b)                                 In the event of a
refusal by a Lender to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Lenders as (and to the extent) provided in Section 12.12(b), the
Borrower may, upon five Business Days’ prior written notice to the
Administrative Agent at the Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the 

 

25

 

Lenders) repay all Loans, together with accrued and unpaid interest,
Fees, and other amounts owing to such Lender in accordance with, and subject to
the requirements of, said Section 12.12(b) so long as (I) all
Commitments of such Lender are terminated concurrently with such repayment
pursuant to Section 3.02(b) (at which time Schedule I shall be
deemed modified to reflect the changed Commitments, and the Adjusted RF
Percentages of the various RF Lenders shall be automatically adjusted to give
effect to such changes), (II) any mandatory repayments required pursuant to Section 4.02(A)(a) as
a result of the changes to the Adjusted RF Percentages of the various RF
Lenders are made and (III) the consents, if any, required under Section 12.12(b) in
connection with the repayment pursuant to this clause (b) have been
obtained.  Each prepayment of any Term
Loans pursuant to this Section 4.01(b) shall be applied (except to
the extent such Term Loans are being replaced pursuant to Section 1.13) to
reduce the then remaining Scheduled Repayments of the Term Loans on a pro
rata basis (based upon the then remaining unpaid principal amounts of
such Scheduled Repayments after giving effect to all prior reductions thereto).

 

4.02  Mandatory
Prepayments.

 

(A)                              Requirements:

 

(a)                                  (i)  If on
any date (and after giving effect to all other repayments on such date) the sum
of the aggregate outstanding principal amount of Revolving Loans made by
Non-Defaulting Lenders, the aggregate outstanding principal amount of Swingline
Loans and the aggregate amount of Letter of Credit Outstandings exceeds the
Adjusted Total Revolving Commitment as then in effect, the Borrower shall repay
on such date the principal of outstanding Swingline Loans and, after all
Swingline Loans have been repaid in full or if no Swingline Loans are
outstanding, Revolving Loans made by Non-Defaulting Lenders in an aggregate
amount equal to such excess.  If, after
giving effect to the repayment of all outstanding Swingline Loans and Revolving
Loans made by Non-Defaulting Lenders, the aggregate amount of Letter of Credit
Outstandings exceeds the Adjusted Total Revolving Commitment then in effect,
the Borrower shall pay to the Administrative Agent an amount in cash and/or
Cash Equivalents equal to such excess and the Administrative Agent shall hold
such payment as security for the obligations of the Borrower in respect of
Letters of Credit pursuant to a cash collateral agreement to be entered into in
form and substance reasonably satisfactory to the Administrative Agent (which
shall permit certain investments in Cash Equivalents reasonably satisfactory to
the Administrative Agent), until all proceeds are applied to the secured
obligations, provided that if any Letter of Credit so secured expires undrawn
or is otherwise terminated undrawn or all drawings thereunder are paid, an
amount shall be returned to the Borrower such that, after giving effect to the
return of such amount, the Adjusted Total Revolving Commitment then in effect
exceeds or equals the aggregate amount of Letter of Credit Outstandings.

 

(ii)                                  If on any date the
aggregate outstanding principal amount of the Revolving Loans made by any
Defaulting Lender exceeds the Revolving Commitment of such Defaulting Lender,
the Borrower shall repay principal of Revolving Loans of such Defaulting Lender
in an amount equal to such excess.

 

26

 

(b)                                 On each date set forth
below, the Borrower shall repay the principal amount of Term Loans set forth
opposite such date (each such repayment, as the same may be reduced as provided
in Sections 4.01(a), 4.01(b) and 4.02(B), a “Scheduled Repayment”):

 

	
  Date

  	
   

  	
  Amount

  	
   

  
	
  November 30,
  2005

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May 31,
  2006

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  November 30,
  2006

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May 31,
  2007

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  November 30,
  2007

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May 31,
  2008

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  November 30,
  2008

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May 31,
  2009

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  November 30,
  2009

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May 31,
  2010

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  November 30,
  2010

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May 31,
  2011

  	
   

  	
  $

  	
  2,935,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2011

  	
   

  	
  $

  	
  551,780,000

  	
   

  

 

In the event that the Borrower incurs any
Incremental Term Loans pursuant to Section 1.01(e), then the amount of
each remaining Scheduled Repayment shall be proportionally increased (with the
aggregate increases to the then remaining Scheduled Repayments to equal the
aggregate principal amount of such new Incremental Term Loans then being
incurred) in accordance with the requirements of Section 1.14(c).

 

(c)                                  On the fifth Business
Day following the date of receipt thereof by Holdings and/or any of its
Subsidiaries of the Net Cash Proceeds from any Asset Sale, an amount equal to
100% of the Net Cash Proceeds from such Asset Sale shall be applied as a
mandatory repayment of principal of the then outstanding Term Loans in
accordance with the requirements of Section 4.02(B)(a), provided
that up to an aggregate of $15,000,000 of the Net Cash Proceeds received by
Holdings and its Subsidiaries from Asset Sales during any fiscal year of
Holdings (but no more than $30,000,000 in the aggregate for all such Asset
Sales after the Restatement Effective Date) shall not be required to be used to
so repay Loans to the extent the Borrower elects, as hereinafter provided, to cause
such Net Cash Proceeds to be reinvested in Reinvestment Assets (a “Reinvestment
Election”).  The Borrower may exercise
its Reinvestment Election (within the parameters specified in the preceding
sentence) with respect to an Asset Sale only if (x) no Default or Event of
Default exists and (y) the Borrower delivers a Reinvestment Notice to the
Administrative Agent no later than five Business Days following the date of the
consummation of the respective Asset Sale, with such Reinvestment Election
being effective with respect to the Net Cash Proceeds of such Asset Sale equal
to the Anticipated Reinvestment Amount specified in such Reinvestment
Notice.  Notwithstanding anything to the
contrary 

 

27

 

contained in this Agreement (including without limitation the foregoing
provisions of this Section 4.02(A)(c)), if any Asset Sale, Asset
Disposition (as defined in the Senior Subordinated Note Indenture) or similar
event occurs and as a result thereof (after giving effect to any reinvestments
and/or permanent repayments of Indebtedness (other than the Senior Subordinated
Notes) actually made in amounts up to, or equal to, the amount of proceeds
received from any such event) any obligation would arise on the part of the Borrower
and/or any of its Subsidiaries to offer to purchase any Senior Subordinated
Notes, then at least two Business Days before any such obligation arises, the
Borrower shall prepay then outstanding Term Loans in accordance with the
requirements of Section 4.02(B)(a) and, after all outstanding Term
Loans have been repaid in full, prepay outstanding Revolving Loans and/or
Swingline Loans (and permanently reduce the Total Revolving Commitment in a
corresponding amount) in such amount as is necessary so that no obligation to
make any such offer to purchase arises.

 

(d)                                 On the date of the
receipt thereof by Holdings and/or any of its Subsidiaries, an amount equal to
100% of the amount of proceeds (net of taxes, underwriting discounts and
commissions and other reasonable fees, expenses and other costs associated
therewith) from the incurrence of Indebtedness by Holdings or any of its
Subsidiaries (other than Indebtedness permitted by Section 8.04), shall be
applied as a mandatory repayment of principal of the then outstanding Term
Loans in accordance with the requirements of Section 4.02(B)(a).

 

(e)                                  On each Excess Cash
Payment Date, the Applicable ECF Prepayment Percentage of Excess Cash Flow for
the fiscal year then last ended shall be applied as a mandatory repayment of
principal of the then outstanding Term Loans in accordance with the
requirements of Section 4.02(B)(a).

 

(f)                                    On the Reinvestment
Prepayment Date with respect to a Reinvestment Election, an amount equal to the
Reinvestment Prepayment Amount, if any, for such Reinvestment Election shall be
applied as a repayment of the principal amount of the then outstanding Term
Loans in accordance with the requirements of Section 4.02(B)(a).

 

(g)                                 To the extent not
theretofore repaid pursuant to the other provisions of this Agreement, (i) all
then outstanding Term Loans shall be repaid in full on the Term Loan Maturity
Date, (ii) all then outstanding Swingline Loans shall be repaid in full on
the Swingline Expiry Date, (iii) all then outstanding Revolving Loans shall
be repaid in full on the RF Maturity Date and (iv) all outstanding
Swingline Loans and Revolving Loans shall be repaid in full upon the
termination of the Total Revolving Commitment.

 

(B)                                Application:

 

(a)                                  Each mandatory
repayment required to be made pursuant to Sections 4.02(A)(c) (to the
extent relating to Asset Sales as described in clause (z) of the definition
thereof), (d) and (f) shall be applied to the outstanding principal
of Term Loans (1) first, in direct order of maturity to those Scheduled Repayments
which will be due and payable within 24 months after the date of the respective
repayment and (2) second, to the extent in excess thereof, to the then
remaining Scheduled Repayments on a pro  rata basis (based upon
the then remaining principal amount of each such Scheduled Repayment after
giving effect to all prior reductions thereto). 
Each mandatory repayment pursuant to Section 4.02(A)(c) (to
the extent relating to 

 

28

 

Asset Sales other than those described in clause (z) of the definition
thereof) shall be applied (1) first, at the Borrower’s election (delivered
in writing to the Administrative Agent) to repay outstanding principal of
Revolving Loans (with no corresponding reduction to the Revolving Commitments)
(although, (x) no election may be made pursuant to this clause (1) with
respect to any mandatory repayment required to be made as a result of the
receipt of Net Cash Proceeds from any sale of assets made pursuant to
sub-clause (A) of Section 8.02(f), and (y) for all other repayments
made pursuant to this sentence, not more than $25,000,000 in the aggregate may
be applied (or elected to be applied) pursuant to this clause (1)), and (2) second,
to the extent in excess of the amount to be applied pursuant to preceding
clause (1), to repay principal of the then outstanding Term Loans, which
repayment shall be applied (x) first, in direct order of maturity to those
Scheduled Repayments which will be due and payable within 24 months after the
date of the respective repayment and (y) second, to the extent in excess
thereof, to the then remaining Scheduled Repayments on a pro  rata
basis (based upon the then remaining principal amount of each such Scheduled
Repayment after giving effect to all prior reductions thereto).  Each mandatory repayment required to be made
pursuant to Section 4.02(A)(e) shall be applied to the then
outstanding principal of Term Loans to reduce the remaining Scheduled
Repayments in the manner directed by the Borrower to the Administrative Agent
in writing, provided that if no such written direction is given on or prior to
the respective Excess Cash Payment Date with respect to the application of any
such mandatory repayment of Term Loans, such repayment shall be applied (x) first,
in direct order of maturity to those Scheduled Repayments which will be due and
payable within 24 months after the date of such mandatory repayment and (y)
second, to the extent in excess thereof, to the then remaining Scheduled
Repayments on a pro  rata basis (based on the then remaining
unpaid principal amount of such Scheduled Repayments after giving effect to all
prior reductions thereto).

 

(b)                                 With respect to each
prepayment of Loans required by Section 4.02, the Borrower may designate
the Types of Loans which are to be prepaid and the specific Borrowing(s) under
the affected Facility pursuant to which made provided that (i) if
any prepayment of Eurodollar Loans made pursuant to a single Borrowing shall
reduce the outstanding Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount for such Borrowing, such Borrowing shall be
immediately converted into Base Rate Loans; and (ii) except for differing
treatments of Defaulting Lenders and Non-Defaulting Lenders as expressly provided
in Section 4.02(A)(a), each prepayment of any Loans made pursuant to a
Borrowing shall be applied pro  rata among such Loans.  In the absence of a designation by the
Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion with
a view, but no obligation, to minimize breakage costs owing under Section 1.11.

 

4.03  Method
and Place of Payment.  Except as
otherwise specifically provided herein, all payments under this Agreement shall
be made to the Administrative Agent for the ratable account of the Lenders
entitled thereto, not later than 1:00 P.M. (New York time) on the date
when due and shall be made in immediately available funds and in Dollars at the
Payment Office, it being understood that written notice by the Borrower to the
Administrative Agent to make a payment from the funds in the Borrower’s account
at the Payment Office shall constitute the making of such payment to the extent
of such funds held in such account.  Any
payments under this Agreement which are made later than 1:00 P.M. (New
York time) shall be deemed to have been made on the next succeeding Business
Day.  Whenever any payment to be made
here-

 

29

 

under shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.

 

4.04  Net
Payments.  (a)  All
payments made by any Credit Party hereunder or under any Note will be made
without setoff, counterclaim or other defense. 
Except as provided in Section 4.04(b), all such payments will be
made free and clear of, and without deduction or withholding for, any present
or future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding, except as provided in the second succeeding sentence,
any franchise tax or any tax imposed on or measured by the net income or net
profits (including for this purpose, any Branch Profits Tax) of a Lender
pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Lender is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as “Taxes”). 
Except as provided in Section 4.04(b), if any Taxes are so levied
or imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or
on account of any Taxes, will not be less than the amount provided for herein
or in such Note.  If any amounts are
payable in respect of Taxes pursuant to the preceding sentence, the Borrower
agrees to reimburse each Lender, upon the written request of such Lender, for
taxes imposed on or measured by the net income or net profits of such Lender
pursuant to the laws of the jurisdiction in which such Lender is organized or
in which the principal office or applicable lending office of such Lender is
located or under the laws of any political subdivision or taxing authority of
any such jurisdiction in which such Lender is organized or in which the
principal office or applicable lending office of such Lender is located and for
any withholding of taxes as such Lender shall determine are payable by, or
withheld from, such Lender, in respect of such amounts so paid to or on behalf
of such Lender pursuant to the preceding sentence and in respect of any amounts
paid to or on behalf of such Lender pursuant to this sentence.  The Borrower will furnish to the
Administrative Agent within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Borrower.  The Borrower
agrees to indemnify and hold harmless each Lender, and reimburse such Lender
upon its written request, for the amount of any Taxes so levied or imposed and
paid by such Lender.  For purposes of this
Section 4.04(a), in the case of any Lender that is a flow-through entity
for tax purposes, the term “Lender” shall be read as referring to the relevant
member or partner of such Lender, provided, however, that with
respect to any reference to indemnity or reimbursement, the term “Lender” shall
mean the Lender and not the member or partner of such Lender.

 

(b)                                 Each Lender that is
not a United States person (as such term is defined in Section 7701(a)(30)
of the Code) for U.S. Federal income tax purposes agrees to deliver to the
Borrower and the Administrative Agent on or prior to the Restatement Effective
Date (i) two accurate and complete original signed copies of Internal
Revenue Service Form W-8ECI or Form W-8BEN (with respect to a
complete exemption under an income tax treaty) (or successor forms) 

 

30

 

certifying to such Lender’s entitlement as of such date to a complete
exemption from United States withholding tax with respect to payments to be
made under this Agreement and under any Note, or (ii) if the Lender is not
a “bank” within the meaning of Section 881(c)(3)(A) of the Code and
cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN
(with respect to a complete exemption under an income tax treaty) pursuant to
clause (i) above, (x) a certificate substantially in the form of Exhibit D
(any such certificate, a “Section 4.04 Certificate”) and (y) two
accurate and complete original signed copies of Internal Revenue Service Form W-8BEN
(with respect to the portfolio exemption) (or successor form) certifying to
such Lender’s entitlement as of such date to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note or (iii) if the Lender is a flow-though
entity for U.S. federal income tax purposes, two accurate and complete signed
copies of Internal Revenue Service Form W-8IMY (and all necessary
attachments) establishing a complete exemption from United States withholding
tax with respect to payments made to the Lender under this Agreement and under
any Note.  In addition, each Lender
agrees that from time to time after the Restatement Effective Date, when a
lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, it will deliver to the Borrower
or the Administrative Agent two new accurate and complete original signed
copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with
respect to the benefits of any income tax treaty), or Form W-8BEN (with
respect to the portfolio interest exemption) and a Section 4.04
Certificate, or Form W-8IMY (with respect to a flow-through entity), as
the case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or
Certificate, in which case such Lender shall not be required to deliver any
such Form or Certificate pursuant to this Section 4.04(b).  Notwithstanding anything to the contrary
contained in Section 4.04(a), but subject to Section 12.04(b) and
the immediately succeeding sentence, (x) the Borrower shall be entitled,
to the extent it is required to do so by law, to deduct or withhold income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, fees or other amounts
payable hereunder for the account of any Lender which is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Lender has not
provided to the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower
shall not be obligated pursuant to Section 4.04(a) hereof to gross-up
payments to be made to a Lender in respect of income or similar taxes imposed
by the United States if (I) such Lender has not provided to the Borrower the
Internal Revenue Service Forms required to be provided to the Borrower pursuant
to this Section 4.04(b) or (II) in the case of a payment, other than
interest, to a Lender described in clause (ii) above, to the extent that
such forms do not establish a complete exemption from withholding of such
taxes.  Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 4.04 and
except as set forth in Section 12.04(b), the Borrower agrees to pay any
additional amounts and to indemnify each Lender in the manner set forth in Section 4.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any Taxes deducted or withheld by it as described in
the immediately preceding sentence as a result of any changes that are
effective after the 

 

31

 

Determination Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of such Taxes.

 

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

 

SECTION 5.   Conditions
Precedent.

 

5.01  Conditions
Precedent to the Restatement Effective Date and the Occurrence of Credit Events
on Such Date.  The occurrence of the
Restatement Effective Date and the obligation of each Lender to make Loans
(including by way of the conversion of the Existing Term Loans and Existing
Revolving Loans on the Restatement Effective Date as contemplated in Sections
1.01(a) and (b)), and the obligation of each Letter of Credit Issuer to
issue Letters of Credit (including any Existing Letters of Credit deemed issued
on the Restatement Effective Date as contemplated in Section 2.01(b)), on
the Restatement Effective Date, is subject to the satisfaction of each of the
following conditions:

 

(a)                                  Execution of
Agreement; Notes.  On or prior to the
Restatement Effective Date, (i) this Agreement shall have been executed
and delivered as provided in Section 12.10 and (ii) there shall have
been delivered to the Administrative Agent for the account of each of the
Lenders that has requested same as a condition to funding its pro rata share of
the Loans on the Restatement Effective Date, the appropriate Term Note and/or
Revolving Note executed by the Borrower and, if requested by the Swingline
Lender, the Swingline Note executed by the Borrower, in each case in the
amount, maturity and as otherwise provided herein.

 

(b)                                 Opinions of Counsel.  The Administrative Agent shall have received (i) from
Latham & Watkins, special counsel to the Credit Parties, an opinion
addressed to the Joint Lead Arrangers, the Administrative Agent, the Collateral
Agent and each of the Lenders and dated the Restatement Effective Date covering
the matters set forth in Exhibit E and (ii) from such local counsel
as may be reasonably requested by the Joint Lead Arrangers, which opinions 

 

32

 

shall cover the perfection of security interests granted pursuant to
the Mortgages and the Security Agreement and shall be in form and substance
reasonably satisfactory to the Joint Lead Arrangers.

 

(c)                                  Corporate
Documents; Proceedings; etc.  (i)  The
Joint Lead Arrangers shall have received a certificate from each New Credit
Party, dated the Restatement Effective Date, signed by the Chairman of the
Board, the Chief Executive Officer, the President or any Vice President of such
New Credit Party, and attested to by the Secretary or any Assistant Secretary
of such New Credit Party, substantially in the form of Exhibit F with
appropriate insertions and deletions, together with copies of the certificate
or articles of incorporation and by-laws (or equivalent organizational
documents), as applicable, of such New Credit Party and the resolutions of such
New Credit Party referred to in such certificate, and each of the foregoing
shall be in form and substance reasonably satisfactory to the Joint Lead
Arrangers.

 

(ii)                                  On the Restatement
Effective Date, the Administrative Agent shall have received a certificate from
each Credit Party (other than the New Credit Parties) (x) certifying that there
were no material changes, or providing the text of any material changes, to the
certificate of incorporation, by-laws or equivalent organizational documents of
such Credit Party delivered pursuant to Section 5.01(c) of the
Existing Credit Agreement, (y) certifying that such Credit Party is in good
standing in its respective state of organization and in those states where such
Credit Party conducts business and (z) providing the resolutions adopted by
such Credit Party with respect to the actions contemplated by this Agreement,
and all of the foregoing shall be reasonably acceptable to the Administrative Agent.

 

(iii)                               On the Restatement
Effective Date, the Joint Lead Arrangers shall have received all information
and copies of all documents and papers, including records of corporate
proceedings, necessary governmental approvals, good standing certificates and bring-down
telegrams or facsimiles, if any, which the Joint Lead Arrangers reasonably may
have requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate, limited liability company or
governmental authorities.

 

(d)                                 Consummation of the
Acquisition.  On the Restatement
Effetive Date, the Acquisition Agreement (together with all exhibits and
schedules thereto), shall be in the form executed on April 5, 2005, with
any additions or changes thereto or waivers of the terms thereof which are in
any manner adverse to the Lenders in any material respect to be in form and
substance reasonably satisfactory to the Joint Lead Arrangers.  The Acquisition Agreement shall be in full
force and effect and all of the material conditions precedent to the
consummation of the Acquisition as set forth in the Acquisition Agreement shall
have been satisfied (and not waived, except with consent of the Joint Lead
Arrangers (not to be unreasonably withheld)). 
The Acquisition shall have been consummated in accordance in all
material respects with the terms and conditions of the Acquisition Agreement
and all applicable laws.  

 

(e)                                  Adverse Change,
Approvals.  (i)  Except as
set forth in Section 2.6 of the Company Disclosure Schedule (as
defined in the Acquisition Agreement), as reflected on or reserved against on
the unaudited consolidated balance sheet of Falk and its Subsidiaries as of December 31,
2004, or as otherwise contemplated by the Acquisition Agreement, there not
occurring, since December 31, 2004, any effect on or change in (or event
or circumstance that is 

 

33

 

reasonably expected to result
in an effect on or change in), the business, financial condition or results of
operations of Falk and its Subsidiaries, taken as a whole, that results or is
reasonably likely to result in the incurrence of a monetary loss or financial
impact to Falk and its Subsidiaries, taken as a whole, that is greater than
$15,000,000, excluding for purposes of such determinations any change or effect
resulting from any of the following: (i) conditions or circumstances generally
affecting the businesses or industries, as a whole, or the geographic area in
which Falk or any of its Subsidiaries operate, but that do not
disproportionately affect Falk and its Subsidiaries, (ii) the entering into of
the Acquisition Agreement with the Borrower, (iii) any changes in applicable
laws, ordinances, rules and regulations of any federal, state, local or foreign
governmental authority or the official interpretations thereof, and (iv) any
changes in United States generally accepted accounting principles.

 

(ii)                                  All material
necessary governmental (domestic and foreign) and material third party
approvals and/or consents required in connection with the Transaction and the
other transactions contemplated hereby shall have been obtained and remain in
effect, and all applicable waiting periods with respect thereto shall have
expired without any action being taken by any competent authority which in the
reasonable judgment of the Joint Lead Arrangers restrains, prevents or imposes
materially adverse conditions upon the consummation of the Transaction or the
other transactions contemplated by the Documents.

 

(f)                                    Litigation.  There shall be no actions, suits or
proceedings pending with respect to the Transaction, this Agreement or any
other Document.

 

(g)                                 Pledge Agreement.  Each Credit Party shall have duly authorized,
executed and delivered an Amended and Restated Pledge Agreement substantially
in the form of Exhibit G (as amended, modified or supplemented from time
to time, the “Pledge Agreement”) and shall have delivered (to the extent not in
possession of the Collateral Agent prior to the Restatement Effective Date) to
the Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement
Collateral, if any, referred to therein, required to be delivered thereby and
then owned by such Credit Party, (x) endorsed in blank in the case of
promissory notes constituting Pledge Agreement Collateral and (y) together with
executed and undated endorsements for transfer in the case of Equity Interests
constituting certificated Pledge Agreement Collateral, along with evidence that
all other actions necessary or, in the reasonable opinion of the Collateral
Agent, desirable, to perfect (or maintain the perfection of) the security
interests purported to be created (or maintained) by the Pledge Agreement have
been taken, or arrangements therefor reasonably satisfactory to the Collateral
Agent have been made, and the Pledge Agreement shall be in full force and
effect.

 

(h)                                 Security Agreement.  Each Credit Party shall have duly authorized,
executed and delivered an Amended and Restated Security Agreement substantially
in the form of Exhibit H (as amended, modified or supplemented from time
to time, the “Security Agreement”) covering all of such Credit Party’s Security
Agreement Collateral, together with:

 

(i)                                     proper financing
statements (Form UCC-1 or the equivalent) authorized for filing under the
UCC or other appropriate filing offices of each jurisdiction as may be
necessary or, in the reasonable opinion of the Collateral Agent, desirable, to
perfect the security interests purported to be created by the Security
Agreement;

 

34

 

(ii)                                  certified copies of
requests for information or copies (Form UCC-11), or equivalent reports as
of a recent date, listing all effective financing statements that name
Holdings, the Borrower or any Subsidiary Guarantor as debtor and that are filed
in the jurisdictions referred to in clause (i) above and, in the case of
any entity acquired pursuant to the Acquisition, in such other jurisdictions in
which material Collateral is located on the Restatement Effective Date,
together with copies of such financing statements that name Holdings, the
Borrower or any Subsidiary Guarantor as debtor (none of which shall cover any
of the Collateral except (x) to the extent evidencing Permitted Liens or (y)
those in respect of which the Collateral Agent shall have received termination
statements (Form UCC-3) or such other termination statements as shall be
required by local law authorized for filing), or arrangements therefor
reasonably satisfactory to the Collateral Agent have been made;

 

(iii)                               evidence of the
completion of or arrangements therefor reasonably satisfactory to the
Collateral Agent for all other recordings and filings of, or with respect to,
the Security Agreement as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable, to perfect (or maintain the perfection of) the
security interests intended to be created (or maintained) by the Security
Agreement; and

 

(iv)                              evidence that all other
actions necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect (or maintain the perfection of) and protect the security
interests purported to be created (or maintained) by the Security Agreement
have been taken, and the Security Agreement shall be in full force and effect.

 

(i)                                     Mortgage; Title
Insurance; Survey; etc.  On the
Restatement Effective Date, the Collateral Agent shall have received:

 

(i)                                     fully executed
counterparts of amendments to (or amendment and restatements of) each of the
Existing Mortgages, which Existing Mortgages shall cover such of the Real
Property owned by the Borrower or any Subsidiary Guarantor and designated on Schedule 6.17
as an “Existing Mortgaged Property” (each, an “Existing Mortgaged Property”
and, collectively, the “Existing Mortgaged Properties”), together with evidence
that counterparts of the Existing Mortgages (as amended or amended and
restated, as the case may be) and any certificates, affidavits, questionnaires
or returns as shall be required in connection with the recording or filing
thereof have been delivered to the title insurance company insuring the
mortgage lien for recording in all places to the extent necessary or, in the
reasonable opinion of the Collateral Agent, desirable to effectively create (or
maintain) a valid and enforceable first priority mortgage lien on each Existing
Mortgaged Property in favor of the Collateral Agent (or such other trustee as
may be required or desired under local law) for the benefit of the Secured
Creditors entitled to the benefits thereof, subject only to Permitted Encumbrances
and Liens permitted under Sections 8.03(a), (b), (g), (h), (j) and (l);

 

(ii)                                  endorsements to the
Existing Mortgage Policies issued by Chicago Title Insurance Company, or such
other title insurer reasonably satisfactory to the Collateral Agent, in amounts
satisfactory to the Collateral Agent insuring the Collateral Agent that the
Existing Mortgages on such Existing Mortgaged Properties will continue to be
valid 

 

35

 

and enforceable first priority mortgage liens
on the respective Existing Mortgaged Properties, free and clear of all defects
and encumbrances except Permitted Encumbrances and Liens permitted under
Sections 8.03(a), (b), (g), (h), (j) and (l), and such Existing Mortgage
Policies shall otherwise be in form and substance reasonably satisfactory to
the Collateral Agent; and

 

(iii)                               flood certificates
covering each Existing Mortgaged Property certifying whether or not each such
Mortgaged Property lies in an area of flood hazard (with reference to the
applicable FEMA (Federal Emergency Management Agency) map) in form and
substance reasonably satisfactory to the Collateral Agent.

 

(j)                                     Financial
Statements; Pro Forma Balance Sheet; Projections.  The Joint Lead Arrangers shall have received,
and be reasonably satisfied with, true and correct copies of (i) the
audited consolidated financial statements of Falk for its fiscal year ended December 31,
2004, (ii) the unaudited consolidated financial statements of Falk for
each fiscal quarter ending after December 31, 2004 and at least 60 days
prior to the Restatement Effective Date, (iii) the pro forma financial
statements referred to in Section 6.10(b) and (iv) the
Projections referred to in Section 6.10(d).

 

(k)                                  Solvency;
Insurance Certificates; Officer’s Certificate.  The Administrative Agent shall have received:

 

(i)                                     a solvency
certificate, dated the Restatement Effective Date, from the Chief Financial
Officer of Holdings, substantially in the form of Exhibit I;

 

(ii)                                  a certificate, dated
the Restatement Effective Date, from the Chief Financial Officer of Holdings,
in form and substance reasonably satisfactory to the Joint Lead Arrangers
certifying in reasonable detail that the incurrence of the New Term Loans on
the Restatement Effective Date is permitted under the Senior Subordinated Note
Indenture; and

 

(iii)                               certificates of
insurance complying with the requirements of Section 7.03 for the business
and properties of the Credit Parties, in form and substance reasonably
satisfactory to the Administrative Agent and naming the Collateral Agent as an
additional insured and/or as loss payee, and stating that such insurance shall
not be canceled without at least 30 days’ prior written notice by the insurer
to the Collateral Agent.

 

(l)                                     Subsidiaries
Guaranty.  Each Domestic Subsidiary
existing on the Restatement Effective Date shall have duly authorized, executed
and delivered an Amended and Restated Subsidiaries Guaranty substantially in
the form of Exhibit J hereto (as modified, amended or supplemented from
time to time in accordance with the terms hereof and thereof, the “Subsidiaries
Guaranty”), and the Subsidiaries Guaranty shall be in full force and effect.

 

(m)                               Existing Indebtedness.  On the Restatement Effective Date and after
giving effect to the Transaction and the Loans then incurred, neither Holdings
nor any of its Subsidiaries shall have any preferred stock or Indebtedness
outstanding except for (i) the Loans and any Letter of Credit issued or
outstanding on the Restatement Effective Date, (ii) the Senior
Subordinated Notes, (iii) intercompany loans among Qualified Credit
Parties and other

 

36

 

intercompany loans made pursuant to Section 8.06(p) (but in any
event excluding intercompany loans made by any Foreign Subsidiary to Holdings
or any Domestic Subsidiary), (iv) the Indebtedness set forth on Schedule 5.01(m)
hereto and (v) certain other Indebtedness in an aggregate principal amount
not to exceed $2,000,000 (the Indebtedness set forth on such Schedule 5.01(m),
together with the Indebtedness described in this clause (v), the “Existing
Indebtedness”), with all of the Existing Indebtedness set forth on Schedule 5.01(m)
to be reasonably satisfactory to the Joint Lead Arrangers as to amount and
material terms and conditions; provided that Holdings and its
Subsidiaries shall not be required to deliver agreements in respect of any
Existing Indebtedness which individually does not exceed $1,000,000.

 

(n)                                 Fees, etc.  The Borrower shall have paid to the Joint
Lead Arrangers and the Administrative Agent all reasonable, documented,
out-of-pocket costs, fees and expenses (including, without limitation, legal
fees and expenses of outside counsel) and other compensation contemplated
hereby payable to the Joint Lead Arrangers and the Administrative Agent to the
extent then due.

 

All of the Notes, certificates, legal
opinions and other documents and papers referred to in this Section 5.01,
unless otherwise specified, shall be delivered to the Administrative Agent for
the account of each of the Lenders and, except for the Notes, in sufficient
counterparts or copies for each of the Lenders.

 

5.02  Conditions
Precedent to All Credit Events.  The
obligation of each Lender to make Loans (including Loans made on the
Restatement Effective Date (including those made by way of conversion of
Existing Term Loans and Existing Revolving Loans on such date as contemplated
in Sections 1.01(a) and (b)) and Incremental Term Loans made on any
Incremental Term Loan Borrowing Date), but excluding any Mandatory Borrowings),
and the obligation of each Letter of Credit Issuer to issue Letters of Credit
(including Letters of Credit issued on the Restatement Effective Date), is
subject, at the time of each such Credit Event, to the satisfaction of the following
conditions:

 

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

 

(b)                                 Notice of
Borrowing; Letter of Credit Request. 
(i)  Prior to the making of each Loan (other than a Swingline
Loan or a Revolving Loan made pursuant to a Mandatory Borrowing or a conversion
of Existing Term Loans and Existing Revolving Loans), the Administrative Agent
shall have received a Notice of Borrowing meeting the requirements of Section 1.03(a).  Prior to the making of each Swingline Loan,
the Swingline Lender shall have received the notice referred to in Section 1.03(b)(i).

 

37

 

 

(ii)                                  Prior to the issuance
of each Letter of Credit, the Administrative Agent and the respective Letter of
Credit Issuer shall have received a Letter of Credit Request meeting the
requirements of Section 2.03(a).

 

The acceptance of the benefits of each Credit
Event (other than a Mandatory Borrowing) shall constitute a representation and
warranty by Holdings and the Borrower to the Administrative Agent and each of
the Lenders that all the conditions specified in Section 5.01 (with
respect to Credit Events on the Restatement Effective Date) and in this Section 5.02
(with respect to Credit Events on and after the Restatement Effective Date) and
applicable to such Credit Event are satisfied as of that time.

 

SECTION 6.   Representations,
Warranties and Agreements.  In order
to induce the Lenders to enter into this Agreement and to make the Loans and
issue and/or participate in Letters of Credit provided for herein, each of
Holdings and the Borrower makes the following representations and warranties to
and agreements with the Lenders (in each case after giving effect to the
Transaction), all of which shall survive the execution and delivery of this
Agreement and the making of the Loans:

 

6.01   Corporate
Status.  Each of Holdings and its
Subsidiaries (i) is a duly organized and validly existing Company, is in
good standing (for each Company of a type, and organized in a jurisdiction,
where the concept of “good standing” exists) under the laws of the jurisdiction
of its organization and has the Company power and authority to own its property
and assets and to transact the business in which it is engaged and (ii) is
duly qualified and is authorized to do business and, to the extent relevant, is
in good standing in all jurisdictions where it is required to be so qualified
and where the failure to be so qualified, authorized or in good standing is
reasonably likely to have a Material Adverse Effect.

 

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

 

6.03   No
Violation.  Neither the execution,
delivery or performance by any Credit Party of the Credit Documents to which it
is a party nor compliance with the terms and provisions thereof, (i) will
contravene any applicable provision of any material law, statute, rule, regulation,
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or
(other than pursuant to the Security Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of Holdings or any of its Subsidiaries pursuant to the terms
of any indenture, mortgage, deed of trust or other material agreement or
instrument to which Holdings or any of its

 

38

 

Subsidiaries is a party or by which it or any of its property or assets
are bound or to which it may be subject or (iii) will violate any
provision of the organizational documents (including by-laws) of Holdings or
any of its Subsidiaries.

 

6.04   Litigation.  There are no actions, suits or proceedings
pending or, to the best of its knowledge, threatened with respect to Holdings or
any of its Subsidiaries (i) that have, or that could reasonably be
expected to have, a Material Adverse Effect or (ii) that have, or that
could reasonably be expected to have, a material adverse effect on (a) the
rights or remedies of the Lenders or on the ability of the Credit Parties taken
as a whole to perform their obligations under the other Credit Documents or (b) the
consummation of the Transaction on the Restatement Effective Date.

 

6.05   Use
of Proceeds; Margin Regulations.  (a)  The
proceeds of all New Term Loans incurred on the Restatement Effective Date shall
be utilized (i) to finance the Acquisition and (ii) to pay certain
fees and expenses relating to the Transaction; provided that proceeds from New
Term Loans in excess of $312,000,000 shall be utilized to repay outstanding
Existing Term Loans of Existing Lenders that are not Consenting Term Lenders.

 

(b)                                 The proceeds of all
Revolving Loans and all Swingline Loans may be used on and after the
Restatement Effective Date for post-closing purchase price adjustments in
respect of the Acquisition pursuant to the terms of the Acquisition Agreement,
capital expenditures, general corporate and working capital purposes,
including, without limitation, for making investments and consummating Permitted
Acquisitions permitted hereunder, provided that up to, but no more than,
$5,000,000 of Revolving Loans may be utilized on the Restatement Effective Date
to effect the Transaction and to pay any fees and expenses incurred in
connection with the Transaction.

 

(c)                                  All proceeds of
Incremental Term Loans shall be used solely to finance Permitted Acquisitions
and pay fees and expenses related thereto.

 

(d)                                 Neither the making of
any Loan hereunder, nor the use of the proceeds thereof, will violate the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System and no part of the proceeds of any Loan will be used to purchase
or carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock.

 

6.06   Governmental
Approvals.  Except for filings and
recordings in connection with the Security Documents, no order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any foreign or domestic governmental or
public body or authority, or any subdivision thereof, is required to authorize
or is required in connection with (i) the execution, delivery and
performance of any Credit Document or (ii) the legality, validity, binding
effect or enforceability of any Credit Document except, in any such case, as
expressly provided herein or in the Security Documents.

 

6.07   Investment
Company Act.  No Credit Party is an “investment
company” or a company “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended.

 

39

 

6.08   Public
Utility Holding Company Act.  No
Credit Party is a “holding company,” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company,” within the meaning of the Public Utility Holding
Company Act of 1935, as amended.

 

6.09   True
and Complete Disclosure.  All factual
information other than projections and pro forma financial information (taken
as a whole) heretofore or contemporaneously furnished by or on behalf of the
Credit Parties in writing to the Joint Lead Arrangers, the Administrative Agent
or the Lenders for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any Credit Party in
writing to the Lenders hereunder will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in any material
respect in light of the circumstances under which such information was
provided; provided that the non-disclosure of material non-public
information relating to Holdings and its Subsidiaries (or any of their
respective securities) to certain Lenders that have requested or elected not to
receive such information shall not be a violation of the representations and
warranties contained in this Section 6.09. 
The projections and pro  forma financial information
contained in such materials are based on good faith estimates and assumptions
believed by Holdings and the Borrower to be reasonable at the time made, it
being recognized by the Lenders that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results.

 

6.10   Financial
Condition; Financial Statements.  (a)  On
and as of the Restatement Effective Date, on a pro  forma basis
after giving effect to the Transaction and all Indebtedness incurred, and to be
incurred (including, without limitation, the New Term Loans), and Liens
created, and to be created, by each Credit Party in connection therewith, (x)
the fair valuation of all of the tangible and intangible assets of the Credit
Parties (on a consolidated basis) will exceed their debts, (y) the Credit
Parties will not have incurred or intended to incur debts beyond their ability
to pay such debts as such debts mature and (z) the Credit Parties will not have
unreasonably small capital with which to conduct their business.  For purposes of this Section 6.10, “debt”
means any liability on a claim, and “claim” means any (i) right to payment
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured; or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right
to an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.

 

(b)                                 The consolidated
balance sheet of Holdings and its Subsidiaries at December 31, 2004 and
the related consolidated statements of operations and cash flows of Holdings
and its Subsidiaries for the nine-month period ended as of said date, copies of
all of which have heretofore been furnished to the Joint Lead Arrangers,
present fairly the consolidated financial position of Holdings and its
Subsidiaries at the date of said statements and the results for the period covered
thereby in accordance with GAAP, subject to year end adjustments and the
absence of footnote disclosure.  The
combined balance sheet of the Falk Business at December 31, 2004 and the
related combined statements of operations and cash flows of Falk 

 

40

 

and its subsidiaries for the fiscal year ended as of said date which
have been audited by PriceWaterhouseCoopers LLP, independent certified public
accountants, who delivered an unqualified opinion with respect therewith,
copies of which have been heretofore furnished to the Joint Lead Arrangers,
present fairly the combined financial position of Falk and its subsidiaries as
of the date of such statement and the results for the period covered thereby in
accordance with GAAP, except to the extent provided in the notes to said
financial statements.  All such financial
statements have been prepared in accordance with GAAP and practices
consistently applied except to the extent provided in the notes to said financial
statements.  The pro  forma
consolidated balance sheet and the related consolidated statements of
operations and cash flows of Holdings and its Subsidiaries as of, and for the
four fiscal quarter period ending on, December 31, 2004, copies of which
have heretofore been furnished to the Joint Lead Arrangers, present a good
faith estimate of the consolidated pro  forma financial position
of Holdings and its Subsidiaries (after giving effect to the Transaction) as at
the date thereof and the results for the period covered thereby.  Nothing has occurred since December 31,
2004 that has had, or is reasonably likely to have, a Material Adverse Effect,
it being understood and agreed by the parties hereto that the representation
made pursuant to this sentence shall not be required to be made on the
Restatement Effective Date (although such representation shall be required to
be made at the time of each Credit Event occurring after such date).

 

(c)                                  Except as reflected
in the financial statements described in Section 6.10(b) or in the
footnotes thereto, there were as of the Restatement Effective Date no
liabilities or obligations with respect to Falk or any of its subsidiaries or
Holdings or any of its Subsidiaries of a nature (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or
in aggregate, would be material to Holdings, Falk and their Subsidiaries taken
as a whole, except as incurred in the ordinary course of business consistent
with past practices.

 

(d)                                 The Projections
delivered to the Administrative Agent and the Joint Lead Arrangers prior to the
Restatement Effective Date have been prepared in good faith and are based on
assumptions believed by the Borrower to be reasonable at the time such
Projections were prepared (it being understood that the Projections are subject
to significant uncertainties and contingencies, many of which are beyond the
control of Holdings and its Subsidiaries, and that no assurance can be given
that the Projections will be realized).

 

6.11   Security
Interests.  (a)  The
provisions of the Security Agreement are effective to create in favor of the
Collateral Agent for the benefit of the Secured Creditors a legal, valid and
enforceable security interest in all right, title and interest of the Credit
Parties in the Security Agreement Collateral described therein, and the
Collateral Agent, for the benefit of the Secured Creditors, has (or within 10
days following the Restatement Effective Date will have) a fully perfected
security interest in all right, title and interest in all of the Security
Agreement Collateral described therein to the extent contemplated therein,
subject to no other Liens other than Permitted Liens.  The recordation of (x) the Grant of Security
Interest in U.S. Patents, if applicable, and (y) the Grant of Security Interest
in U.S. Trademarks, if applicable, in the respective form attached to the
Security Agreement, in each case in the United States Patent and Trademark
Office, together with filings on Form UCC-1 made pursuant to the
Security Agreement, will create, to the extent the security interest granted
pursuant thereto may be perfected by such filings and recordation, a perfected
security interest in the United States trademarks and patents covered by the
Security Agreement, and the recordation of the Grant of 

 

41

 

Security Interest in U.S. Copyrights, if applicable, in the form
attached to the Security Agreement with the United States Copyright Office,
together with filings on Form UCC-1 made pursuant to the Security
Agreement, will create, to the extent the security interest granted pursuant
thereto may be perfected by such filings and recordation, a perfected security
interest in the United States copyrights covered by the Security Agreement.

 

(b)                                 The provisions of the
Pledge Agreement are effective to create in favor of the Collateral Agent, for
the benefit of the Secured Creditors, a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Pledge
Agreement Collateral (as described therein), and the Collateral Agent, for the
benefit of the Secured Creditors, has (or within 10 days following the
Restatement Effective Date will have) a fully perfected security interest in
all right, title and interest in all of the Pledge Agreement Collateral
described therein to the extent contemplated therein, subject to no other Liens
other than Permitted Liens.

 

(c)                                  Each Mortgage is
effective to create, as security for the obligations purported to be secured
thereby, a valid and enforceable perfected security interest in and mortgage
lien on the respective Mortgaged Property in favor of the Collateral Agent (or
such other trustee as may be party thereto) for the benefit of the Secured
Creditors, superior and prior to the rights of all third Persons (except that
the security interest and mortgage lien created on such Mortgaged Property may
be subject to the Permitted Encumbrances related thereto) and subject to no
other Liens (other than Permitted Liens related thereto).

 

6.12   Tax
Returns and Payments.  Each of
Holdings and its Subsidiaries has timely filed with the appropriate taxing
authority, all material returns, statements, forms and reports for taxes (the “Returns”)
required to be filed by or with respect to the income, properties or operations
of Holdings and/or any of its Subsidiaries, except, in the case of any such
filing required to be filed by a Foreign Subsidiary, to the extent failure to
do so is not reasonably likely to have a Material Adverse Effect.  Holdings and each of its Subsidiaries have
paid all material taxes payable by them when due except (i) those
contested in good faith and adequately disclosed and for which adequate
reserves have been established in accordance with generally accepted accounting
principles and (ii) in the case of any such taxes payable by a Foreign
Subsidiary, to the extent the failure to pay such taxes is not reasonably
likely to have a Material Adverse Effect.

 

6.13   Compliance
with ERISA.  (a)  Part A
of Schedule 6.13 sets forth each Plan other than ERISA Affiliate Plans as
of the Restatement Effective Date, after giving effect to the Transaction.  Except to the extent that a breach of any of
the following representations with respect to an ERISA Affiliate Plan would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect (provided, however, (i) any of the following
representations with respect to an ERISA Affiliate Plan shall be deemed not
qualified by any reference therein to materiality and (ii) this exception
shall not apply to any of the following representations that expressly refer to
a Material Adverse Effect):  each Plan
(and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including without
limitation ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401(a) of the Code is so
qualified; no Reportable Event has occurred with respect to a Plan, except as
disclosed in Part B of 

 

42

 

Schedule 6.13; to the knowledge of Borrower no Plan which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is
insolvent or in reorganization; no Plan has an Unfunded Current Liability
which, when added to the aggregate amount of Unfunded Current Liabilities with
respect to all other Plans is reasonably likely to result in a Material Adverse
Effect; no Plan which is subject to Section 412 of the Code or Section 302
of ERISA has an accumulated funding deficiency, within the meaning of such
sections of the Code or ERISA, or has applied for or received a waiver of an
accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304
of ERISA; all contributions required to be made with respect to a Plan have
been timely made in all material respects; neither Holdings, the Borrower nor
any Subsidiary of Holdings has incurred any material liability (including any
indirect, contingent or secondary liability) to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the
Code or to the knowledge of Holdings, the Borrower or such Subsidiary
reasonably expects to incur any such material liability under any of the
foregoing sections with respect to any Plan; to the knowledge of Holdings, the
Borrower or such Subsidiary no condition exists which presents a material risk
to Holdings, the Borrower or any Subsidiary of Holdings of incurring a material
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no proceedings have been instituted to terminate (in a
distress termination pursuant to ERISA Section 4042) or appoint a trustee
to administer any Plan which is subject to Title IV of ERISA; no action, suit,
proceeding, hearing, audit or investigation with respect to the administration,
operation or the investment of assets of any Plan (other than routine claims
for benefits) is pending, expected or to the knowledge of the Credit Parties
threatened, other than any of the foregoing which would not, individually or in
the aggregate, reasonably be expected to result in a material liability of
Holdings, the Borrower or any Subsidiary of Holdings; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E
of Title IV of ERISA, the aggregate liabilities of Holdings, its Subsidiaries
and its ERISA Affiliates to all Plans which are multiemployer plans (as defined
in Section 4001(a)(3) of ERISA) in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such Plan
ended prior to the date of the most recent Credit Event (other than a Mandatory
Borrowing) is not reasonably likely to result in a Material Adverse Effect; and
each group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
the Code) which covers or has covered employees or former employees of Holdings
or any Subsidiary of Holdings has at all times been operated in compliance with
the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B
of the Code, other than any failure to so comply which would not, individually
or in the aggregate, reasonably be expected to result in a material liability
of Holdings, the Borrower or any Subsidiary of Holdings; each group health plan
(as defined in 45 Code of Federal Regulations Section 160.103) which
covers or has covered employees or former employees of Holdings or any
Subsidiary of Holdings has at all times been operated in compliance with the
provisions of the Health Insurance Portability and Accountability Act of 1996,
as amended, and the regulations promulgated thereunder, other than any failure
to so comply which would not, individually or in the aggregate, reasonably be
expected to result in a material liability to Holdings, the Borrower or any
Subsidiary of Holdings; no lien imposed under the Code or ERISA on the assets
of Holdings or any Subsidiary of Holdings exists or is likely to arise on
account of any Plan.

 

(b)                                 Except as could not
reasonably be expected to have a Material Adverse Effect, each Foreign Pension
Plan has been maintained in compliance with its terms and with the 

 

43

 

requirements of any and all applicable laws, statutes, rules,
regulations and orders and has been maintained, where required, in good standing
with applicable regulatory authorities; all contributions required to be made
with respect to a Foreign Pension Plan have been timely made; and neither
Holdings, the Borrower nor any of its Subsidiaries has incurred any obligation
in connection with the termination of or withdrawal from any Foreign Pension
Plan; and the present value of the accrued benefit liabilities (whether or not
vested) under each Foreign Pension Plan, determined as of the end of the
Borrower’s most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.

 

6.14   Subsidiaries.  On and as of the Restatement Effective Date
and after giving effect to the consummation of the Transaction, (i) Holdings
has no direct Subsidiaries other than the Borrower and (ii) the Borrower
has no Subsidiaries other than those Subsidiaries listed on Schedule 6.14.  Schedule 6.14 correctly sets forth, as
of the Restatement Effective Date and after giving effect to the Transaction,
the percentage ownership (direct and indirect) of Holdings in each class of
capital stock of each of its Subsidiaries and also identifies the direct owner
thereof.

 

6.15   Intellectual
Property.  Each of Holdings and its
Subsidiaries owns or has the right to use all the domestic and foreign patents,
trademarks, service marks, trade names, domain names, technology, copyrights,
licenses, permits, franchises, inventions, formulas, trade secrets, proprietary
information and know-how of any type, 
whether or not written (including, but not limited to, computer
programs, databases and data collections) or has rights with respect to the
foregoing, and has obtained assignments of all leases and licenses and other
rights of whatever nature, that are used in the operation of each such Credit
Party’s respective business as presently conducted, where the failure to own,
hold such rights or obtain such assignments is reasonably likely to have a Material
Adverse Effect.

 

6.16   Environmental
Matters.  (a)  Each of
Holdings and its Subsidiaries is in compliance with all applicable
Environmental Laws governing its business, and neither Holdings nor any of its
Subsidiaries is liable for any material penalties, fines or forfeitures for
failure to comply with any of the foregoing in the manner set forth above,
except where any such failure to comply or any liability for any such
penalties, fines or forfeitures is not reasonably likely to result in a Material
Adverse Effect.  All licenses, permits,
registrations or approvals required for the business of Holdings and each of
its Subsidiaries, as conducted as of the Restatement Effective Date, under any
Environmental Law have been secured and each of Holdings and its Subsidiaries
is in substantial compliance therewith, except such licenses, permits,
registrations or approvals the failure to secure or to comply therewith is not
reasonably likely to have a Material Adverse Effect.  Neither Holdings nor any of its Subsidiaries
is in any respect in noncompliance with, breach of or default under any
applicable writ, order, judgment, injunction, or decree to which Holdings or
such Subsidiary is a party or which could affect the ability of Holdings or
such Subsidiary to operate any Real Property and no event has occurred and is
continuing which, with the passage of time or the giving of notice or both,
would reasonably be expected to constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance, breaches or defaults
as are not reasonably likely to, in the aggregate, have a Material Adverse
Effect.  There are as of the Restatement
Effective Date no Environmental Claims pending or, to the best knowledge of
Holdings and the Borrower threatened, where any decision, ruling or finding
with respect thereto is reasonably likely to have a Material Adverse 

 

44

 

Effect.  There are no facts,
circumstances, conditions or occurrences concerning the business or operations
of Holdings or any of its Subsidiaries, or any Real Property at any time owned
or operated by Holdings or any of its Subsidiaries or, to the knowledge of
Holdings or the Borrower, on any property adjacent to any such Real Property
that could reasonably be expected (i) to form the basis of an
Environmental Claim against Holdings, any of its Subsidiaries or any of their
respective Real Property or (ii) to cause any such currently owned or
operated Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property under any Environmental
Law, except in each such case, such Environmental Claims or restrictions that
individually, or in the aggregate, are not reasonably likely to have a Material
Adverse Effect.

 

(b)                                 Hazardous Materials
have not at any time been (i) generated, used, treated or stored on, or
transported to or from, any Real Property owned or operated by Holdings or any
of its Subsidiaries or (ii) released on or from any such Real Property, in
each case where such occurrence or event individually or in the aggregate is
reasonably likely to have a Material Adverse Effect.

 

6.17   Properties.  Holdings and each of its Subsidiaries have
good and insurable title to, or a validly existing leasehold interest in, all
material properties owned and used by them, including, as of the Restatement
Effective Date, all Real Property reflected in the combined balance sheets of
the Falk Business at December 31, 2004 referred to in Section 6.10(b),
free and clear of all Liens, other than (i) as referred to in such
consolidated balance sheet or in the notes thereto, (ii) otherwise
permitted by Section 8.03 or (iii) in the case of any such property
owned or used by a Foreign Subsidiary, as is not reasonably likely to have a
Material Adverse Effect.  Schedule 6.17
contains a true and complete list of each domestic Real Property owned or
leased by Holdings or any of its Domestic Subsidiaries (other than any such
leased Real Property where the annual base rental obligation with respect
thereto is less than $250,000) as of the Restatement Effective Date and after
giving effect to the Transaction, and the type of interest therein held by
Holdings or the respective Domestic Subsidiary; it being understood that the
facility of Falk or one of its Subsidiaries located in Wauwatosa, Wisconsin
reflected as owned real property on the combined balance sheet referred to
above is, as of the Restatement Effective Date, leased by Falk or one of its
Subsidiaries.

 

6.18   Labor
Relations.  No Credit Party is
engaged in any unfair labor practice that could reasonably be expected to have
a Material Adverse Effect.  There is (i) no
unfair labor practice complaint pending against any Credit Party or, to the
best of its knowledge, threatened against any of them, before the National
Labor Relations Board, and no grievance or arbitration proceeding arising out
of or under any collective bargaining agreement is so pending against any
Credit Party or, to the best of its knowledge, threatened against any of them, (ii) no
strike, labor dispute, slowdown or stoppage pending against any Credit
Party or, to the best of its knowledge, threatened against any Credit Party and
(iii) no union representation question existing with respect to the
employees of any Credit Party and no union organizing activities are taking
place, except with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate, such as could not reasonably be
expected to have a Material Adverse Effect.

 

6.19   Compliance
with Statutes, etc.  Each of Holdings
and each of its Subsidiaries is in compliance with all applicable statutes,
regulations and orders of, and all appli-

 

45

 

cable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property, except such non-compliance as is not reasonably likely to,
individually or in the aggregate, have a Material Adverse Effect.

 

6.20   Subordination.  The subordination provisions contained in the
Senior Subordinated Note Indenture are enforceable by the Lenders against the
Borrower and the holders of the Senior Subordinated Notes, and all Obligations of
the Borrower are or will be within the definitions of “Senior Indebtedness” and
“Designated Senior Indebtedness,” as the case may be, included in such
provisions of the Senior Subordinated Note Indenture.

 

6.21   Capitalization.  (a)  On the Restatement Effective
Date, the authorized capital stock of Holdings consists of 5,000,000 shares of
common stock, $.01 par value, of which 3,615,428 shares are issued and
outstanding.  All outstanding shares of
capital stock of Holdings have been duly and validly issued and are fully paid
and non-assessable.

 

(b)                                 On the Restatement
Effective Date, the authorized capital stock of the Borrower consists of 1,000
shares of common stock, $.01 par value, of which 1,000 shares are issued and
outstanding and owned by Holdings.  All
outstanding shares of the capital stock of the Borrower have been duly and
validly issued and are fully paid and non-assessable.  The Borrower does not have outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreement providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to, its capital
stock.

 

6.22   Legal
Names; Type of Organization (and Whether a Registered Organization);
Jurisdiction of Organization; etc.  Schedule 6.22
attached hereto contains for each Credit Party, as of the Restatement Effective
Date, (i) the exact legal name of such Credit Party, (ii) the type of
organization of such Credit Party, (iii) whether or not such Credit Party
is a registered organization, (iv) the jurisdiction of organization of
such Credit Party, (v) such Credit Party’s Location and (vi) the
organizational identification number (if any) of such Credit Party.  To the extent that such Credit Party does not
have an organizational identification number on the date hereof and later
obtains one, such Credit Party shall promptly thereafter notify the Collateral
Agent of such organizational identification number and shall take all actions
reasonably satisfactory to the Collateral Agent to the extent necessary to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted pursuant to the Security Documents fully perfected and
in full force and effect.

 

SECTION 7.
   Affirmative Covenants.  Holdings and the Borrower hereby covenant and
agree that for so long as this Agreement is in effect and until the Commitments
have terminated, no Letters of Credit or Notes are outstanding and the Loans
and Unpaid Drawings, together with interest, Fees and all other Obligations
(other than any indemnities hereunder and under the other Credit Documents
which are not then owing) incurred hereunder, are paid in full:

 

7.01   Information
Covenants.  Holdings will furnish to
the Administrative Agent for distribution to each Lender:

 

46

 

(a)                                  Annual Financial
Statements.  Within 90 days after the
close of each fiscal year of Holdings, the audited consolidated balance sheet
of Holdings and its Subsidiaries, as at the end of such fiscal year and the
related consolidated statements of operations and of cash flows for such fiscal
year, in each case setting forth comparative consolidated figures for the
preceding fiscal year, and examined by independent certified public accountants
of recognized national standing whose opinion shall not be qualified as to the
scope of audit or as to the status of Holdings or any of its Subsidiaries as a
going concern.  Notwithstanding the
foregoing, in the event that Holdings delivers to the Administrative Agent an
Annual Report for Holdings on Form 10-K for such fiscal year, as
filed with the SEC, within 90 days after the end of such fiscal year, such Form 10-K
shall satisfy all requirements of this clause (a) so long as the certified
public accountants’ opinion included in such Form 10-K satisfies the
requirements with respect thereto set forth in the immediately preceding
sentence.

 

(b)                                 Quarterly Financial
Statements.  Commencing with the
fiscal quarter ending on June 30, 2005, within 60 days after the close of
each of the first three quarterly accounting periods in each fiscal year of
Holdings, the unaudited consolidated balance sheet of Holdings and its
Subsidiaries, as at the end of such quarterly accounting period and the related
unaudited consolidated statements of operations and of cash flows for such
quarterly accounting period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly accounting period, and in each case,
commencing with the quarter ending June 30, 2005, setting forth
comparative consolidated figures for the related periods in the prior fiscal
year, all of which shall be in reasonable detail and certified by the chief
financial officer or controller of Holdings, subject to changes resulting from
audit and normal year-end audit adjustments. 
Notwithstanding the foregoing, in the event that Holdings delivers to
the Administrative Agent a Quarterly Report for Holdings on Form 10-Q
for such fiscal quarter, as filed with the SEC, within 45 days after the end of
such fiscal quarter, such Form 10-Q shall satisfy all requirements
of this clause (b).

 

(c)                                  Budgets; etc.  Not more than 60 days after the commencement
of each fiscal year of Holdings, a consolidated budget of Holdings and its
Subsidiaries (including budgeted statements of income, sources and uses of cash
and balance sheets for Holdings and its Subsidiaries on a consolidated basis)
for each of the four fiscal quarters of such fiscal year prepared in reasonable
detail as customarily prepared by management for its internal use and setting
forth, with appropriate discussion, the principal assumptions upon which such
budgets are based.  Together with each
delivery of consolidated financial statements pursuant to Sections 7.01(a) and
(b) beginning after the fiscal year ending March 31, 2006, a
comparison of the current year-to-date financial results against the budgets
required to be submitted pursuant to this clause (d) shall be presented.

 

(d)                                 Officer’s
Certificates.  At the time of the
delivery of the financial statements provided for in Sections 7.01(a) and
(b), a certificate of the chief financial officer or controller of Holdings to
the effect that no Default or Event of Default exists or, if any Default or
Event of Default does exist, specifying the nature and extent thereof, which
certificate (x) shall set forth the calculations required to establish (I) the
Consolidated Leverage Ratio on the last day of the fiscal period covered by
such financial statements and (II) whether Holdings and its Subsidiaries were
in compliance with the Financial Covenants as at the end of such fiscal period
and (y) in the case of the certificate delivered at the time of the delivery of
the financial 

 

47

 

statements provided for in Section 7.01(a) shall set forth
the amount of the Excess Cash Flow for the relevant period ending on the last
day of the fiscal year covered by such financial statements.

 

(e)                                  Notice of Default
or Litigation.  Promptly, and in any
event within ten Business Days after any officer of Holdings or the Borrower
obtains knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or Event of Default which notice shall specify the nature
thereof, the period of existence thereof and what action Holdings or the
Borrower proposes to take with respect thereto and (ii) the commencement
of, or any significant adverse development in, any litigation or governmental
proceeding pending against Holdings or any of its Subsidiaries that is
reasonably likely to have a Material Adverse Effect or is reasonably likely to
have a material adverse effect on the ability of the Credit Parties to perform
their obligations under the Credit Documents.

 

(f)                                    Environmental
Matters.  Promptly after obtaining
knowledge of any of the following (but only to the extent (A) not
disclosed in an environmental report delivered to the Administrative Agent
prior to the Restatement Effective Date and (B) that any of the following
could reasonably be expected to (x) have a Material Adverse Effect, either
individually or in the aggregate, or (y) result in a remedial cost to Holdings,
the Borrower, and/or its Subsidiaries in respect of liabilities to the extent
not otherwise covered by existing indemnities, in excess of $5,000,000):

 

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

 

(ii)                                  any condition or
occurrence on any Real Property owned or operated by Holdings or any of its
Subsidiaries that (x) results in noncompliance by Holdings or any of its
Subsidiaries with any applicable Environmental Law or (y) is reasonably likely
to result in an Environmental Claim against Holdings or any of its Subsidiaries
or any such Real Property;

 

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

 

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

 

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

 

48

 

(g)                                 Other Information.  Promptly upon transmission thereof, (i) copies
of any filings and registrations with, and reports to, the Securities and
Exchange Commission or any successor thereto (the “SEC”) by Holdings or any of
its Subsidiaries and (ii) copies of all financial statements, proxy
statements, notices and reports as Holdings or any of its Subsidiaries shall
send generally to analysts and the holders of the Senior Subordinated Notes in
their capacity as such holders (to the extent not otherwise delivered to the
Lenders pursuant to this Agreement), and with reasonable promptness, such other
information or documents (financial or otherwise) as the Administrative Agent
on its own behalf or on behalf of the Required Lenders may reasonably request
from time to time.

 

7.02   Books,
Records and Inspections.  Holdings
will, and will cause its Subsidiaries to, permit, upon reasonable notice to the
chief financial officer, controller or any other Authorized Officer of Holdings
or the Borrower, officers and designated representatives of the Administrative
Agent or the Required Lenders to visit and inspect any of the properties or
assets of Holdings and any of its Subsidiaries in their possession and to
examine the books of account of Holdings and any of its Subsidiaries and
discuss the affairs, finances and accounts of Holdings and of any of its
Subsidiaries with, and be advised as to the same by, its and their officers and
independent accountants, all during normal business hours, at reasonable
intervals and to such reasonable extent as the Administrative Agent or the
Required Lenders may desire.

 

7.03   Insurance.  Holdings will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance with
reputable and solvent insurers in such amounts, covering such risks and liabilities
and with such deductibles or self-insured retentions as are in accordance with
normal industry practice in the relevant region.  Holdings will, and will cause each of its
Subsidiaries (but in the case of clause (ii) below, only to the extent such
Subsidiary is a Credit Party) to, furnish to the Administrative Agent on the
Restatement Effective Date and thereafter annually, upon request of the
Administrative Agent, (i) a summary of the insurance carried and (ii) certificates
of insurance and other evidence of such insurance, if any, naming the
Collateral Agent as an additional insured and/or loss payee, to the extent of
its interests therein.

 

7.04   Payment
of Taxes.  Holdings will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to the
date on which penalties attach thereto, and all lawful claims which, if unpaid,
would become a Lien or charge upon any material properties of Holdings or any
of its Subsidiaries, provided that (i) no Foreign Subsidiary shall
be required to pay any such tax, assessment, charge, levy or claim to the
extent the aggregate failures to pay same are not reasonably expected to have a
Material Adverse Effect and (ii) neither Holdings nor any Subsidiary shall
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto (in the good faith judgment of the
management of Borrower) in accordance with generally accepted accounting
principles.

 

7.05   Corporate
Franchises.  Holdings will do, and
will cause each Subsidiary to do, or cause to be done, all things reasonably
necessary to preserve and keep in full force and effect its existence and to
preserve its rights and franchises, other than any such rights or 

 

49

 

franchises the failure to preserve which could not reasonably be
expected to have a Material Adverse Effect, provided that any
transaction permitted by Section 8.02 will not constitute a breach of this
Section 7.05.

 

7.06   Compliance
with Statutes, etc.  The Borrower will,
and will cause each Subsidiary to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property other than those the non-compliance
with which is not reasonably likely to have a Material Adverse Effect or have a
material adverse effect on the ability of the Credit Parties to perform their
obligations under the Credit Documents.

 

7.07   ERISA.  As soon as possible and, in any event, within
ten (10) days after Holdings, the Borrower or any Subsidiary knows or has
reason to know of the occurrence of any of the following, the Borrower will
deliver to each of the Lenders a certificate of the chief financial officer of
the Borrower setting forth the full details as to such occurrence and the
action, if any, that Holdings, any Subsidiary 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 Holdings, any Subsidiary, any ERISA Affiliate,
the PBGC, a Plan participant or the Plan administrator with respect
thereto:  that a Reportable Event has
occurred (except to the extent that such Reportable Event is disclosed in Part B
of Schedule 6.13 or the Borrower has previously delivered to the Lender a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard
to subparagraph (b)(1) thereof), and an event described in subsection .62,
..63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is
reasonably expected to occur with respect to such Plan within the following 30
days; that an accumulated funding deficiency, within the meaning of Section 412
of the Code or Section 302 of ERISA, has been incurred or an application
may reasonably be expected to be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments)
or an extension of any amortization period under Section 412 of the Code
or Section 303 or 304 of ERISA with respect to a Plan; that any
contribution required to be made with respect to a Plan or Foreign Pension Plan
has not been timely made in all material respects; that a Plan subject to Title
IV of ERISA has been or may reasonably be expected to be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA; that a
Plan has an Unfunded Current Liability which, when added to the aggregate
amount of Unfunded Current Liabilities with respect to all other Plans is
reasonably likely to have a Material Adverse Effect; that proceedings may
reasonably be expected to be or have been instituted to terminate or appoint a
trustee to administer a Plan which is subject to Title IV of ERISA; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect
a delinquent contribution to a Plan; that Holdings, the Borrower or any
Subsidiary of the Borrower will or may reasonably be expected to incur any
material liability (including any indirect, contingent, or secondary liability)
to or on account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or to the extent that Holdings,
the Borrower or any Subsidiary of the Borrower will or may reasonably be
expected to incur any such liability with respect to a Plan other than an ERISA
Affiliate Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
the Code) under Section 4980B of the Code; or that 

 

50

 

Holdings or any Subsidiary of Holdings may incur any material liability
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Part 6 of Title I, subpart B) of ERISA and Section 4980B
of the Code) or any Plan or any Foreign Pension Plan in addition to the
liability that existed on the Restatement Effective Date pursuant to any such
plan or plans.  The Borrower will deliver
to each of the Lenders (i) a complete copy of the annual report (on
Internal Revenue Service Form 5500-series) of each Plan (including,
to the extent required, the related financial and actuarial statements and
opinions and other supporting statements, certifications, schedules and
information) required to be filed with the Internal Revenue Service and (ii) copies
of any records, documents or other information that must be furnished to the
PBGC with respect to any Plan pursuant to Section 4010 of ERISA; provided
that in the case of any Plan that is an ERISA Affiliate Plan, the foregoing
shall only be required to be delivered upon the reasonable request of the
Lender.  In addition to any certificates
or notices delivered to the Lender pursuant to the first sentence hereof,
copies of annual reports and any records, documents or other information
required to be furnished to the PBGC, and any material notices received by
Holdings or any Subsidiary of Holdings with respect to any Plan or Foreign
Pension Plan shall be delivered to the Lenders no later than thirty days after
the date such annual report has been filed with the Internal Revenue Service or
such records, documents and/or information has been furnished to the PBGC or
such notice has been received by Holdings or any of its Subsidiaries, as
applicable.  The Borrower will, and will
cause each Subsidiary to, ensure that all Foreign Pension Plans administered by
it or into which it makes payments obtains or retains (as applicable)
registered status under and as required by applicable law and is administered
in a timely manner in all respects in compliance with all applicable laws
except where the failure to do any of the foregoing would not be reasonably
likely to result in a Material Adverse Effect.

 

7.08   Good
Repair.  Holdings will, and will
cause each of its Subsidiaries to, ensure that its material properties and
equipment used or useful in its business are kept in good repair, working order
and condition, normal wear and tear excepted, and, subject to Section 8.05,
that from time to time there are made in such properties and equipment all
needful and proper repairs, renewals, replacements, extensions, additions,
betterments and improvements thereto, to the extent and in the manner customary
for companies in similar businesses, except, in the case of Foreign
Subsidiaries, where all failures to do the foregoing would not reasonably be
likely to result in a Material Adverse Effect.

 

7.09   End
of Fiscal Years; Fiscal Quarters. 
Holdings will, for financial reporting purposes, cause (i) each of
its, and each of its Subsidiaries’, fiscal years and fourth fiscal quarters to
end on March 31 of each year and (ii) each of its, and each of its
Subsidiaries’, first three fiscal quarters to end on the last day of June, September and
December of each year, provided that Holdings may change its and
its Subsidiaries’ fiscal year end to December 31 (and change its and its
Subsidiaries fiscal quarters to end on dates consistent with a December 31
fiscal year end) so long as (i) the Borrower shall have given the
Administrative Agent at least 10 Business Days’ prior written notice thereof
and (ii) on or prior to such change in fiscal year and fiscal quarters,
the Borrower and the Required Lenders shall have entered into certain technical
amendments and modifications to this Agreement to preserve the intent of the
parties with respect to the covenants and agreements set forth in Sections
8.05, the Financial Covenants and 

 

51

 

any other provisions of this Agreement deemed appropriate by the Joint
Lead Arrangers and the Borrower.

 

7.10   New
Subsidiaries; Additional Security; Further Assurances.  (a)  Holdings and its Subsidiaries will
cause (A) (i) each of Intermediate Holdco and each Wholly-Owned
Domestic Subsidiary that is established, created or acquired after the
Restatement Effective Date (x) to become a party to the Subsidiaries Guaranty,
the Pledge Agreement and the Security Agreement by executing counterparts of
such Credit Documents or by executing a counterpart of a Joinder Agreement
substantially in the form of Exhibit K (each a “Joinder Agreement”) and
taking the actions specified therein and (y) to execute and deliver
counterparts of one or more Mortgages to the extent required under Section 7.10(b),
in each case on the same basis (and to the same extent) as Intermediate Holdco
or such Subsidiary would have executed such Credit Documents if it were a
Credit Party on the Restatement Effective Date and (ii) 100% of the Equity
Interests of Intermediate Holdco and each such new Wholly-Owned Domestic
Subsidiary to be pledged pursuant to the Pledge Agreement and the certificates
representing such Equity Interests, if any, together with endorsements for the
transfer thereof duly executed in blank, to be delivered to the Collateral
Agent; provided that to the extent such new Wholly-Owned Domestic
Subsidiary is created solely for the purposes of consummating a merger
transaction pursuant to a Permitted Acquisition, and such new Wholly-Owned
Domestic Subsidiary at no time holds any assets or liabilities other than any
merger consideration contributed to it contemporaneously with the closing of
such merger transaction, such Wholly-Owned Domestic Subsidiary shall not be
required to take the actions set forth in sub-clauses (i) and (ii) of
this clause (A) until the respective Permitted Acquisition is consummated
(at which time the surviving entity of the respective merger transaction shall
be required to so comply (within the 10 Business Day period referred to
below)), (B) 100% of the Equity Interests of each Non-Wholly Owned
Domestic Subsidiaries which are owned by a Credit Party that is established,
created or acquired after the Restatement Effective Date to be pledged pursuant
to the Pledge Agreement and the certificates representing such Equity
Interests, if any, together with endorsements for the transfer thereof duly
executed in blank to be delivered to the Collateral Agent and (C) the
Equity Interests of any Foreign Subsidiary which is owned by a Credit Party to
be pledged to the Collateral Agent pursuant to, and to the extent required by,
the Pledge Agreement (except that the Equity Interests of any Foreign
Subsidiary created solely for the purposes of consummating a merger transaction
pursuant to a Permitted Acquisition, so long as such Foreign Subsidiary at no
time holds any assets or liabilities other than merger consideration contributed
to it contemporaneously with the closing of such merger transaction, need not
be so pledged until the date of the consummation of the respective Permitted
Acquisition, at which time the Equity Interests of the surviving entity thereof
shall be required to be so pledged (within the 10 Business Day period referred
to below)).  For the avoidance of doubt
nothing in this Section 7.10(a) shall be construed to permit the
acquisition of any Subsidiary after the Restatement Effective Date unless such
acquisition is permitted pursuant to the terms of Section 7.12, 8.02,
8.06(q) and/or 8.06(r).

 

(b)                                 Holdings will cause
the Borrower and the Guarantors to grant to the Collateral Agent security
interests and mortgages in owned Real Property with a fair market value of
$5,000,000 or more acquired after the Restatement Effective Date (including as
a result of the acquisition of any Subsidiary that becomes a Subsidiary
Guarantor as provided in Section 7.10(a)) as may be reasonably requested
from time to time by the Administrative Agent and/or the Required Lenders
(collectively, the “Additional Mortgages”). 
All such security interests and

 

52

 

mortgages shall be granted pursuant to documentation reasonably
satisfactory in form and substance to the Administrative Agent and shall
constitute valid and enforceable Liens superior to and prior to the rights of
all third Persons (except to the extent subject to any Permitted Encumbrances)
and subject to no other Liens except Permitted Liens.  The Additional Mortgages or instruments
related thereto shall be duly recorded or filed in such manner and in such
places as are required by law to establish, perfect, preserve and protect the
Liens in favor of the Collateral Agent required to be granted pursuant to the
Additional Mortgages and all taxes, fees and other charges payable in
connection therewith shall be paid in full. 
Furthermore, Holdings shall cause to be delivered to the Collateral Agent
such opinions of counsel, title insurance, surveys, flood certificates and
other related documents as may be reasonably requested by the Administrative
Agent to assure itself that this Section 7.10(a) has been complied
with.

 

(c)                                  Holdings will, and
will cause the Borrower and the Subsidiary Guarantors to, at the expense of the
Borrower make, execute, endorse, acknowledge, file and/or deliver to the
Collateral Agent from time to time such financing statements, transfer
endorsements and powers of attorney, and take such further steps relating to
the Collateral covered by any of the Security Documents as may be necessary to
create, maintain or perfect the Liens granted to the Collateral Agent or as the
Collateral Agent may reasonably require, in each case as contemplated by the
Security Documents.

 

(d)                                 Additionally, upon the
reasonable request (in each case, taking into account the relative costs (to
the Borrower) and benefits (to the Secured Creditors)) of the Collateral Agent
or the Required Lenders, Holdings shall take, or cause to be taken, such action
as may be reasonably requested (including, without limitation (i) subject
to the above-mentioned cost-benefit analysis, the execution and delivery of
pledge or security agreements governed by applicable local law and (ii) the
filing of financing statements) in order to perfect (or maintain the perfection
of) the security interests (or take any analogous actions under the applicable
provisions of local law in order to protect such security interests) in (x) any
Equity Interests in any Foreign Subsidiary or other foreign Person, in either
case that is organized under the laws of Germany or The Netherlands,
pledged pursuant to the Pledge Agreement owned by Holdings or a Domestic
Subsidiary, in each case to the extent such actions are permitted to be taken
under the laws of the applicable jurisdictions and (y) any Collateral the fair
market value of which equals or exceeds $2,000,000 that is located outside the
U.S. and is owned by a Qualified Credit Party, to the extent that such actions
are permitted to be taken under the laws of the applicable jurisdictions.  Furthermore, Holdings will, and will cause
the other Credit Parties that are Subsidiaries of Holdings to, deliver to the
Collateral Agent such opinions of counsel and other related documents as may be
reasonably requested by the Administrative Agent to assure itself with the
Credit Parties’ compliance with this Section 7.10(c).

 

(e)                                  Each Credit Party
agrees that each action required above by Sections 7.10(a), (b) and (c) shall
be completed as soon as possible, but in no event later than (1) in the
case of Section 7.10(a), 10 Business Days after the date of the
establishment, creation or acquisition of the respective Subsidiary, except
that all requirements set forth above in Section 7.10(a) with respect
to Intermediate Holdco shall be required to be satisfied on such sooner date,
if any, as any Equity Interests of the Borrower are transferred to it and (2) in
the case of Section 7.10(b), 60 days (or such longer period as the
Collateral Agent may agree) after such action is requested to be taken by the
Administrative Agent, the Collateral Agent or the 

 

53

 

Required Lenders, as the case may be, provided that in no event
shall the Borrower be required to take any action, other than using its
reasonable commercial efforts without any material expenditure, to obtain
consents from third parties with respect to its compliance with Sections
7.10(b), (c) and (d).

 

7.11   Compliance
with Environmental Laws.  (a)  (i) Holdings
will comply, and will cause each of its Subsidiaries to comply, with all
Environmental Laws applicable to the ownership, lease or use of all Real
Property now or hereafter owned, leased or operated by Holdings or any of its
Subsidiaries, will promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws and (ii) neither Holdings nor any of its Subsidiaries
will generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of Hazardous Materials
on any Real Property now or hereafter owned, leased or operated by Holdings or
any of its Subsidiaries, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, except to the extent that the
failure to comply with the requirements specified in clause (i) or (ii) above,
either individually or in the aggregate, is not reasonably likely to have a
Material Adverse Effect.  If legally
required to do so under any applicable directive or order of any governmental
agency, Holdings agrees to undertake, and cause each of its Subsidiaries to
undertake, any clean up, removal, remedial or other action necessary to remove
and clean up any Hazardous Materials from any Real Property owned, leased or
operated by Holdings or any of its Subsidiaries in accordance with, in all
material respects, the requirements of all applicable Environmental Laws and in
accordance with, in all material respects, such orders and directives of all
governmental authorities, except to the extent that Holdings or such Subsidiary
is contesting such order or directive in good faith and by appropriate
proceedings and for which adequate reserves have been established to the extent
required by GAAP; provided that it will not constitute a breach of this Section 7.11
if a Person other than Holdings and its Subsidiaries takes such action on
behalf of Holdings and its Subsidiaries.

 

(b)                                 At the request of the
Administrative Agent or the Required Lenders at any time and from time to time
during the continuance of an Event of Default, upon the reasonable belief by
the Administrative Agent that Holdings or any of its Subsidiaries has breached
in any material respect any representation or covenant herein with respect to
any environmental matters affecting any Mortgaged Property and such breach is
continuing and/or a notice has been provided under Section 7.01(g),
Holdings and the Borrower will provide, at their sole cost and expense (or will
cause its relevant Subsidiary to provide at its sole cost and expense), an
environmental site assessment report reasonable in scope concerning any
Mortgaged Property that is the subject of the breach or notice of Holdings or
its Subsidiaries, prepared by an environmental consulting firm reasonably
acceptable to the Administrative Agent, indicating the presence or Release or
absence of Hazardous Materials on or from any such Mortgaged Property and the
potential cost of any removal or remedial action in connection with any
Hazardous Materials on such Mortgaged Property. 
If Holdings or the Borrower fails to provide the same after thirty days’
notice and the Event of Default is continuing, the Administrative Agent may
order the same, and Holdings and the Borrower shall grant and hereby grant to
the Administrative Agent and the Lenders and their agents access to such
Mortgaged Property and specifically grants the Administrative Agent and the
Lenders an irrevocable non-exclusive license, subject to the rights 

 

54

 

of tenants, to undertake such an assessment all at Holdings’ and the
Borrower’s (joint and several) reasonable expense, which assessments, if
obtained, will be provided to Holdings.

 

7.12   Permitted
Acquisitions.  (a)  Subject
to the provisions of this Section 7.12 and the requirements contained in
the definition of Permitted Acquisition, the Borrower and its Subsidiaries may
effect Permitted Acquisitions in accordance with the definition thereof, so
long as (in each case except to the extent the Required Lenders otherwise
specifically agree in writing in the case of a specific Permitted Acquisition):  (i) no Default or Event of Default shall
have occurred and be continuing at the time of the consummation of the proposed
Permitted Acquisition or immediately after giving effect thereto; (ii) the
Borrower shall have given to the Administrative Agent and the Lenders (x) at
least 5 Business Days’ prior written notice of any Permitted Acquisition (or
such shorter period of time as may be reasonably acceptable to the
Administrative Agent), which notice shall describe in reasonable detail the
principal terms and conditions of such Permitted Acquisition and (y) a copy of
any “Phase One” or “Phase Two” environmental assessment that the Borrower, in
its discretion, obtained in connection with the proposed Permitted Acquisition;
(iii) in the case of a Significant Acquisition, calculations are made by
Holdings with respect to the Financial Covenants for the Test Period most
recently ended on a Post-Test Period Pro  Forma Basis as if the
respective Significant Acquisition (as well as all other Significant
Acquisitions and Significant Asset Sales theretofore consummated after the
first day of such Test Period) had occurred on the first day of’ such Test
Period, and such calculations shall show that such Financial Covenants would
have been complied with if the respective Permitted Acquisition had occurred on
the first day of such Test Period; (iv) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Permitted Acquisition
(both before and after giving effect thereto), unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date; (v) the
Aggregate Consideration for all Permitted Acquisitions consummated after the
Restatement Effective Date shall not exceed $75,000,000; (vi) in addition
to the requirements of preceding clause (v), in the case of Permitted
Acquisitions made after the Restatement Effective Date by any Foreign
Subsidiary or where the respective Acquired Entity or Business is outside, or
is organized outside, the United States (or any portion thereof is so organized
or located outside the United States) no such Permitted Acquisition described
in this clause (vi) may be effected if after giving effect thereto, the
Permitted Foreign Investment Amount would be less than $0; (vii) in
addition to the requirements of clause (v) above, in the case of Permitted
Acquisitions made after the Restatement Effective Date where the respective
Acquired Entity or Business (or any Person directly or indirectly owned by it)
will be a Non-Wholly Owned Domestic Subsidiary or Joint Venture, no such
Permitted Acquisition described in this clause (vii) may be effected if,
after giving effect thereto, the Permitted JV Investment Amount would be less
than $0; (viii) in addition to the requirements of clause (v) above,
in the case of Permitted Acquisitions made after the Restatement Effective Date
where the respective Acquired Business or Entity holds Equity Interests in an
entity representing less than 20% of the total outstanding Equity Interests of
such entity, the fair market value of all such Equity Interests shall, unless
the acquisition of such Equity Interests can be justified under Section 8.06(d),
be deemed to be a utilization of the basket amount set forth in Section 8.06(r)
and shall only be permitted if same does not exceed the amount then available
under such basket; and (ix) the Borrower shall have delivered to the
Administrative Agent a certificate executed by the chief financial officer or 

 

55

 

controller of the Borrower, certifying to the best of such officer’s
knowledge, compliance with the requirements of preceding clauses (i) through
(viii), inclusive, and containing the calculations (in reasonable detail)
required to establish compliance with preceding clauses (iii) (if
applicable), (v), (vi), (vii) and (viii).

 

(b)                                 At the time of each
Permitted Acquisition involving the creation or acquisition of a Domestic
Subsidiary or a Foreign Subsidiary that is a direct Subsidiary of a Domestic
Subsidiary, or the acquisition of any Equity Interests of any Person by a
Domestic Subsidiary, the Equity Interests thereof created or acquired in
connection with such Permitted Acquisition shall be pledged for the benefit of
the Secured Creditors pursuant to (and to the extent required by) the Pledge
Agreement.

 

(c)                                  The Borrower will
cause each Subsidiary which is formed to effect, or is acquired pursuant to,
and will survive the consummation of, a Permitted Acquisition to comply with,
and to execute and deliver all of the documentation as and to the extent
required by, Section 7.10, to the reasonable satisfaction of the
Administrative Agent.

 

(d)                                 The consummation of
each Permitted Acquisition shall be deemed to be a representation and warranty
by each of Holdings and the Borrower that the certifications pursuant to this Section 7.12
are true and correct and that all conditions thereto have been satisfied and
that same is permitted in accordance with the terms of this Agreement, which
representation and warranty shall be deemed to be a representation and warranty
for all purposes hereunder, including, without limitation, Sections 6
and 9.

 

7.13   New
Mortgages.  The Borrower will, and
will cause each of its Subsidiaries to deliver the following within 30 days
after the Restatement Effective Date (or, in the case of clause (iii) below,
such longer period as the Collateral Agent may agree):

 

(i)                                     fully executed
counterparts of the New Mortgages, in each case in form and substance
reasonably satisfactory to the Administrative Agent, which New Mortgages shall
cover the Real Property owned by the Borrower and designated as “New Mortgaged
Property” on Schedule 6.17, together with evidence that counterparts of
such New Mortgages have been delivered to the title insurance company insuring
the Lien of each such New Mortgage for recording in all places to the extent
necessary or, in the reasonable opinion of the Collateral Agent desirable, to
effectively create a valid and enforceable first priority mortgage lien,
subject only to Liens permitted under Sections 8.03(a), (b), (g), (h), (j) and
(l), on the Mortgaged Property described therein in favor of the Collateral
Agent (or such other trustee as may be required or desired under local law) for
the benefit of the Secured Creditors;

 

(ii)                                  a Mortgage Policy
relating to each New Mortgage on each New Mortgaged Property referred to above
issued by a title insurer reasonably satisfactory to the Collateral Agent and
in amounts reasonably satisfactory to the Collateral Agent and assuring the
Collateral Agent that the respective New Mortgage on each such New Mortgaged
Property is a valid and enforceable first priority mortgage lien on the
respective such New Mortgaged Property, free and clear of all defects and
encumbrances except Liens permitted under Sections 8.03(a), (b), (g), (h), (j)
and (l), and each such 

 

56

 

New Mortgage Policy shall otherwise be in
form and substance reasonably satisfactory to the Collateral Agent and shall
include, if available in any particular State and as appropriate, an
endorsement for future advances under this Agreement and the Notes and for any
other matter that the Collateral Agent in its discretion may reasonably
request, shall not include a survey exception (unless the requirements set
forth in clause (iii) below relating to the respective New Mortgaged
Property are not satisfied at such time, in which case any such survey
exceptions shall be removed from the Mortgage Policy relating to such New
Mortgaged Property at such time when such requirements have been met) or an
exception for mechanics’ liens, and shall provide for affirmative insurance and
such reinsurance as the Collateral Agent in its discretion may reasonably
request;

 

(iii)                               (A)                              a copy of the existing
survey of each New Mortgaged Property, together with a “no-change” affidavit,
if such are acceptable to the title insurer referred to in preceding clause (ii) and
sufficient for such title insurer to remove all standard survey exceptions from
the Mortgage Policy relating to such New Mortgaged Property and issue the
endorsements required pursuant to the provisions of preceding clause (ii) or
(B) a survey of each New Mortgaged Property (and all improvements thereon)
(a) prepared by a surveyor or engineer licensed to perform surveys in the
state, commonwealth or applicable jurisdiction where such New Mortgaged
Property is located, (b) dated not earlier than six months prior to the
date of delivery thereof unless there shall have occurred within six months
prior to such date of delivery any exterior construction on the site of such
New Mortgaged Property, in which event such survey shall be dated after the
completion of such construction or if such construction shall not have been
completed as of such date of delivery, not earlier than twenty days prior to
such date of delivery, (c) certified by the surveyor (in a manner
reasonably acceptable to the Collateral Agent) to the Collateral Agent in its
capacity as such and such title insurer, (d) complying in all respects
with the minimum detail requirements of the American Land Title Association as
such requirements are in effect on the date or preparation of such survey, and (e) sufficient
for title insurer to remove all standard survey exceptions from the Mortgage
Policy relating to such Mortgaged Property and issue the endorsements required
pursuant to the provisions of preceding clause (ii); and

 

(iv)                              flood certificates
covering each New Mortgaged Property certifying whether or not each such
Mortgaged Property lies in an area of flood hazard (with reference to the
applicable FEMA (Federal Emergency Management Agency) map) in form and
substance reasonably satisfactory to the Collateral Agent.

 

SECTION 8.
   Negative Covenants.  Holdings and the Borrower hereby covenant and
agree that for so long as this Agreement is in effect and until the Commitments
have terminated, no Letters of Credit or Notes are outstanding and the Loans
and Unpaid Drawings, together with interest, Fees and all other Obligations
(other than any indemnities hereunder and under the other Credit Documents
which are not then owing) incurred hereunder, are paid in full:

 

8.01   Changes
in Business.  (a)  Holdings
will not permit at any time the business activities taken as a whole conducted
by the Borrower and its Subsidiaries to be materially different from the
business activities taken as a whole (including incidental activities)
conducted 

 

57

 

by the Borrower and its Subsidiaries on the Restatement Effective Date
(after giving effect to the Transaction) and businesses reasonably related
thereto and reasonable extensions thereof.

 

(b)                                 Holdings will not
engage in any business other than its ownership of the capital stock of, and
the management of, the Borrower (or, after same is established, Intermediate
Holdco), provided that (i) Holdings may engage in those activities that
are incidental to (x) the maintenance of its corporate existence in compliance
with applicable law, (y) legal, tax and accounting matters in connection with
any of the foregoing activities and (z) the entering into, and performing its
obligations under, this Agreement, the other Documents, and the Management
Agreement to which it is a party and (ii) Holdings may issue Equity
Interests to the extent permitted under Section 8.13.

 

(c)                                  From and after the
time of its establishment (if any), Intermediate Holdco will not engage in any
business other than its ownership of the capital stock of, and the management
of, the Borrower and other activities described in the proviso contained in
preceding clause (b).

 

8.02   Consolidation,
Merger, Sale or Purchase of Assets, etc. 
Holdings will not, and will not permit any Subsidiary to, wind up,
liquidate or dissolve its affairs, or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part
of its property or assets (other than inventory or worn-out or obsolete
equipment no longer needed in the conduct of the business, in each case in the
ordinary course of business) or purchase, lease or otherwise acquire all or any
part of the property or assets of any Person (other than purchases or other
acquisitions of inventory, leases, materials, supplies and equipment, in each
case in the ordinary course of business) or agree to do any of the foregoing at
any future time without a contingency in any such agreement relating to either
(x) obtaining any required approval hereunder or (y) the repayment in cash in
full of all the Obligations and the termination of all Commitments prior to or
contemporaneously with the consummation of the respective transaction, except
that the following shall be permitted:

 

(a)                                  (i) any
Subsidiary of the Borrower may be merged or consolidated with or into, or be
liquidated into, a Qualified Credit Party (so long as a Qualified Credit Party
(which must be the Borrower in the case of any such transaction with the
Borrower) is the surviving corporation), and (ii) the Borrower or any
Subsidiary thereof may, in the ordinary course of business consistent with past
practices, convey, sell, lease or otherwise transfer all or any part of its
business, properties and assets to a Qualified Credit Party;

 

(b)                                 Consolidated Capital
Expenditures may be made by the Borrower and its Subsidiaries to the extent
within the limitations set forth in Section 8.05 hereof, and Reinvestment
Assets may be acquired as specifically permitted by Section 4.02(A)(c) hereof;

 

(c)                                  the investments,
acquisitions and transfers or dispositions of properties permitted pursuant to Section 8.06
and Dividends permitted pursuant to Section 8.08;

 

(d)                                 each of the Borrower
and any Subsidiary may lease (as lessee) real or personal property (but not
pursuant to sale-leaseback transactions) in the ordinary course of 

 

58

 

business (so long as such lease does not create a Capitalized Lease
Obligation not otherwise permitted by Section 8.04(c) and (j));

 

(e)                                  licenses or
sublicenses by the Borrower and its Subsidiaries of intellectual property in
the ordinary course of business, provided, that such licenses or
sublicenses shall not interfere with the business of the Borrower or any
Subsidiary except, in the case of any such license or sublicense by a Foreign
Subsidiary, as is not reasonably likely to have Material Adverse Effect;

 

(f)                                    sales (but not
pursuant to sale-leaseback transactions) of assets by the Borrower and its
Subsidiaries to Persons other than Holdings or a Subsidiary thereof so long as (A) the
assets sold comprise all or a portion of the Industrial Chain Business (or
Equity Interests in Persons whose only assets at the time of such sale comprise
all or a portion of the Industrial Chain Business) and/or (B) to the
extent any assets sold do not qualify pursuant to the preceding clause (A), the
aggregate Net Cash Proceeds received from all sales permitted by this
sub-clause (B) do not exceed $30,000,000 in the aggregate, provided
that (1) to the extent the Net Cash Proceeds received in connection with
any sale pursuant to this Section 8.02(f) exceed $1,000,000, such
sale shall result in the Borrower or the respective Subsidiary receiving
consideration in an amount at least equal to the fair market value of the
assets sold, which consideration shall consist of at least 75% cash and/or Cash
Equivalents (with the assumption of Indebtedness and the sale for cash within
30 days of receipt of securities received calculated as cash), (2) the Net
Cash Proceeds of each sale pursuant to this Section 8.02(f) are
applied to repay the Loans to the extent required by Section 4.02(A)(c) and
(3) in the case of a sale or disposition of the Equity Interests of any
Subsidiary of the Borrower (or a Person which was a Subsidiary of the Borrower
prior to such sale or disposition) which represent less than 100% of the Equity
Interests in such Subsidiary owned by Holdings and its Subsidiaries (unless the
sale or disposition represents a subsequent sale of Equity Interests in a
Subsidiary which previously had Equity Interests sold after the Restatement
Effective Date pursuant to this Section 8.02(f)), then the amount by which
the fair market value (as determined in good faith by the Borrower) of all the
Equity Interests in such Subsidiary owned by the Borrower and its Subsidiaries
immediately before such sale or disposition exceeds the Net Cash Proceeds
received by the Borrower and its Subsidiaries from such disposition, shall be
deemed to constitute an investment which shall only be permitted if same does
not exceed the Permitted JV Investment Amount at the time of such sale or
disposition; and, provided further, that the sale or disposition of
Equity Interests of the Borrower shall be prohibited, except that 100% of the
Equity Interests of the Borrower may be transferred to Intermediate Holdco
contemporaneously with or after the establishment of same in accordance with
the definition thereof;

 

(g)                                 the Acquisition;

 

(h)                                 leases and subleases
permitted under Section 8.03(g) and other Liens permitted pursuant to
Section 8.03 (other than clause (t) thereof);

 

(i)                                     the Borrower and
any of its Domestic Subsidiaries may convey, sell, lease or otherwise transfer
assets (other than Equity Interests in any Domestic Subsidiary) to any Foreign
Subsidiary, provided that the fair market value (as determined by the
Borrower in good faith) of the assets so conveyed, sold or transferred (net of
the amount of any cash consideration 

 

59

 

received therefor) does not exceed the Permitted Foreign Investment
Amount at the time of the respective conveyance, sale or transfer;

 

(j)                                     Holdings and its
Subsidiaries may liquidate Cash Equivalents in the ordinary course of business;

 

(k)                                  Holdings and its
Subsidiaries may pre-pay rent under leases and may purchase pre-paid insurance
in the ordinary course of business;

 

(l)                                     the Borrower and any
of its Subsidiaries may convey, sell, lease or otherwise transfer assets to any
Joint Venture, provided that the fair market value (as determined by the
Borrower in good faith) of the assets so conveyed, sold, leased or otherwise
transferred (net of the amount of any cash consideration received therefor)
does not exceed the Permitted JV Investment Amount at the time of the
respective such conveyance, sale or transfer;

 

(m)                               Foreign Subsidiaries may
sell assets pursuant to Sale/Leaseback Transactions so long as at no time shall
the aggregate amount of the Attributable Debt arising from such Sale/Leaseback
Transactions, when added (without duplication) to the Permitted Factoring
Transaction Outstandings and the aggregate principal amount of Indebtedness outstanding
pursuant to Section 8.04(i) at such time, exceed the Permitted
Foreign Subsidiary Debt Amount as then in effect;

 

(n)                                 (i) Foreign
Subsidiaries may convey, sell, lease or otherwise transfer assets to other
Foreign Subsidiaries and (ii) Non-Wholly Owned Domestic Subsidiaries may
convey, sell, lease or otherwise transfer assets to other Non-Wholly Owned
Domestic Subsidiaries;

 

(o)                                 Foreign Subsidiaries
may sell receivables and related assets pursuant to factoring arrangements so
long as at no time shall the aggregate amount of Permitted Factoring
Transaction Outstandings arising from such factoring arrangements, when added
(without duplication) to the Attributable Debt arising from Sale/Leaseback
Transactions at such time and the aggregate principal amount of Indebtedness
outstanding pursuant to Section 8.04(i) at such time, exceed the
Permitted Foreign Subsidiary Debt Amount as then in effect; and

 

(p)                                 the Borrower and its
Subsidiaries may sell (without recourse) receivables (and related assets)
arising from goods and services provided to Honeywell International Inc.
pursuant to factoring arrangements entered into in the ordinary course of
business consistent with past practices so long as at no time shall the
aggregate amount of Permitted Honeywell Receivables Transaction Outstandings
arising from such factoring arrangements exceed $1,500,000.

 

8.03   Liens.  Holdings will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets of any kind (real or personal, tangible
or intangible) of Holdings or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable or notes with
recourse to Holdings or any of its Subsidiaries) or assign any right to receive
income, except:

 

60

 

(a)                                  Liens for taxes not
yet delinquent or Liens for taxes being contested in good faith and by
appropriate proceedings for which adequate reserves (in the good faith judgment
of the management of the Borrower) have been established;

 

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

 

(c)                                  Liens created by or
pursuant to this Agreement or the other Credit Documents;

 

(d)                                 Liens created pursuant
to Capital Leases permitted by Section 8.04(c);

 

(e)                                  Liens arising from
judgments, decrees or attachments and Liens securing appeal bonds arising from
judgments, in each case in circumstances not constituting an Event of Default
under Section 9.09 so long as the aggregate fair market value of all
assets subject to such Liens does not exceed $15,000,000;

 

(f)                                    Liens (other than
any Lien imposed by ERISA) incurred or deposits made in the ordinary course of
business (x) in connection with workers’ compensation, unemployment insurance
and other types of social security or (y) to secure the performance of tenders,
statutory obligations, surety bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money); provided that (i) any consensual Liens
as described above shall not apply or attach to any of the Collateral (other
than cash, Cash Equivalents and Foreign Cash Equivalents) and (ii) consensual
Liens as described in clause (y) above shall not be secured at any time by
cash, Cash Equivalents, Foreign Cash Equivalents and/or other property of
Holdings and its Subsidiaries with an aggregate fair market value in excess of
$15,000,000;

 

(g)                                 licenses, leases or
subleases to others in the ordinary course of business not interfering in any
material respect with the business of the Borrower or any of its Subsidiaries;

 

(h)                                 Permitted
Encumbrances, easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business
of Holdings or any of its Subsidiaries;

 

(i)                                     Liens arising from
UCC financing statements regarding leases permitted by this Agreement;

 

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

 

61

 

proceeds therefrom and (y) purchase money Liens securing current
account payables arising from the purchase by the Borrower or any Subsidiary of
any equipment or goods in the ordinary course of business, provided that
such Liens shall not extend to any other property of Holdings or any of its
Subsidiaries;

 

(k)                                  any interest or title
of a lessor under any lease permitted by this Agreement;

 

(l)                                     Liens in existence
on, and which are to continue in effect after, the Restatement Effective Date
which are listed, and the property subject thereto described in, Schedule 8.03(l),
in each case subject to the limitations with respect to any such Lien set forth
in such Schedule 8.03(l) and without giving effect to any extension or
renewal thereof;

 

(m)                               Liens arising pursuant
to purchase money mortgages or security interests securing Indebtedness
representing the purchase price (or financing of the purchase price within 180
days after the respective purchase) of assets acquired by the Borrower or any
Subsidiary after the Restatement Effective Date, provided that (x) any
such Liens attach only to the assets so acquired and proceeds thereof, (y) the
Indebtedness secured by any such Lien does not exceed 100% of the purchase
price of the property being purchased at the time of the incurrence of such
Indebtedness and (z) all Indebtedness secured by Liens created pursuant to this
clause (m) shall not exceed the amount permitted to be outstanding pursuant to Section 8.04(d);

 

(n)                                 Liens on property or
assets (and proceeds therefrom) acquired pursuant to a Permitted Acquisition,
or on property or assets of a Subsidiary of the Borrower (and proceeds
therefrom) in existence at the time such Subsidiary is acquired pursuant to a
Permitted Acquisition, provided that (x) any Indebtedness that is
secured by such Liens is permitted to exist under Section 8.04(j), and (y)
such Liens are not incurred in connection with, or in contemplation or
anticipation of, such Permitted Acquisition and do not attach to any asset of
Holdings or any other asset of the Borrower or any of its Subsidiaries;

 

(o)                                 cash deposits required
to be made in connection with any proposed Permitted Acquisition to the extent
that the aggregate amount of cash on deposit at any given time, and the
aggregate amount of all such deposits not returned to the Borrower (other than
such deposits which have been applied by the holder thereof towards the
Aggregate Consideration at the time of the consummation of such Permitted
Acquisition), shall not exceed $2,000,000;

 

(p)                                 Liens that are
contractual rights of set-off (i) relating to the establishment of
depository relationships with banks not given in connection with the incurrence
of Indebtedness, (ii) relating to pooled deposit or sweep accounts of
Holdings or any Subsidiary to permit satisfaction of overdraft or similar
obligations incurred in the ordinary course of business or (iii) relating
to purchase orders or other agreements entered into with customers of the
Borrower or any of its Subsidiaries in the ordinary course of business;

 

(q)                                 Liens on unearned
premiums and dividends under insurance policies in connection with the
financing of insurance premiums in the ordinary course of business;

 

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

 

62

 

(s)                                  Liens on property or
assets of Foreign Subsidiaries securing Indebtedness permitted under Section 8.04(i);

 

(t)                                    Liens on
receivables (and proceeds thereof) sold in accordance with Section 8.02(p);
and

 

(u)                                 Liens not otherwise
permitted pursuant to preceding clauses (a) through (t); provided
that the fair market value (as determined in good faith by the Borrower) of all
assets subject to such Liens does not at any time exceed $1,000,000.

 

8.04   Indebtedness.  Holdings will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:

 

(a)                                  Indebtedness incurred
pursuant to this Agreement and the other Credit Documents;

 

(b)                                 Indebtedness of (i) any
Qualified Credit Party owing to another Qualified Credit Party, (ii) the
Borrower or any of its Domestic Subsidiaries owing to Foreign Subsidiaries
arising from loans and advances made in accordance with Section 8.06(j), (iii) Foreign
Subsidiaries owing to the Borrower or any of its Domestic Subsidiaries arising
from loans and advances made in accordance with Section 8.06(k), (iv) any
Foreign Subsidiary owing to another Foreign Subsidiary and (v) Non-Wholly
Owned Domestic Subsidiaries owing to other Non-Wholly Owned Domestic
Subsidiaries;

 

(c)                                  Capitalized Lease
Obligations of the Borrower and its Subsidiaries arising after the Restatement
Effective Date, provided that the aggregate amount of such Capitalized
Lease Obligations outstanding pursuant to this clause (c), when added to the
aggregate principal amount of Indebtedness then outstanding pursuant to
following clause (d), shall at no time exceed $35,000,000;

 

(d)                                 Indebtedness incurred
pursuant to purchase money mortgages or security interests permitted by Section 8.03(m),
provided that the aggregate principal amount of Indebtedness outstanding
pursuant to this clause (d), when added to the aggregate amount of Capitalized
Lease Obligations then outstanding pursuant to preceding clause (c), shall at
no time exceed $35,000,000;

 

(e)                                  unsecured
Indebtedness of the Borrower, as issuer, and Holdings and any Subsidiary
Guarantor (for so long as such Person remains a Guarantor), in each case as a
senior subordinated guarantor, incurred under the Senior Subordinated Notes and
the other Senior Subordinated Note Documents in an aggregate principal amount
not to exceed $225,000,000 less the amount of any repayments of principal
thereof after the Original Effective Date and any Refinancing Indebtedness in
respect thereof;

 

(f)                                    Existing
Indebtedness and any Refinancing Indebtedness in respect thereof;

 

(g)                                 Indebtedness of the
Borrower or any of its Subsidiaries under Other Hedging Agreements providing
protection to the Borrower and its Subsidiaries against 

 

63

 

fluctuations in currency values or commodity prices in connection with
the Borrower’s or any of its Subsidiaries’ operations so long as the entering
into of such Other Hedging Agreements are bona  fide hedging
activities and are not for speculative purposes;

 

(h)                                 Indebtedness of the
Borrower or any of its Subsidiaries under Interest Rate Protection Agreements
entered into with respect to other Indebtedness permitted to be incurred by
such Person under this Section 8.04 so long as the entering into of such
Interest Rate Protection Agreements are bona  fide hedging
activities and are not for speculative purposes;

 

(i)                                     Indebtedness of
Foreign Subsidiaries in respect of local lines of credit, letters of credit,
bank guarantees, factoring arrangements, Sale/Leaseback Transactions and
similar extensions of credit, provided that (i) such Indebtedness shall not
be guaranteed by any Credit Party or otherwise supported by any Credit Party
(or any Credit Party’s assets) in any manner (except to the extent such
guarantee or support is independently permitted under Section 8.04(k)) and
(ii) at no time shall the aggregate outstanding principal amount of such
Indebtedness (calculated without duplication of any guarantees of such
Indebtedness by a Foreign Subsidiary) plus (without duplication) all
Attributable Debt at such time plus all Permitted Factoring Transaction
Outstandings at such time exceed the Permitted Foreign Subsidiary Debt Amount
as then in effect;

 

(j)                                     Indebtedness of a
Subsidiary of the Borrower (x) acquired pursuant to a Permitted Acquisition (or
Indebtedness assumed at the time of a Permitted Acquisition of an asset
securing such Indebtedness), provided that (i) such Indebtedness
was not incurred in connection with, or in anticipation or contemplation of,
such Permitted Acquisition and (ii) the aggregate principal amount of all
Indebtedness permitted by this clause (j) shall not exceed $5,000,000 at any
time outstanding, and (y) consisting of Refinancing Indebtedness incurred to
refinance Indebtedness theretofore outstanding pursuant to this clause (j);

 

(k)                                  Contingent
Obligations (including under letters of credit (including, without limitation,
those described in clause (v) of Section 2.01(b)) and other
guarantees) of the Borrower and its Domestic Subsidiaries with respect to
Indebtedness and other obligations of Foreign Subsidiaries, provided
that at no time shall the aggregate outstanding amount of such Contingent
Obligations (calculated taking the maximum liability thereunder) exceed the
Permitted Foreign Investment Amount as then in effect;

 

(l)                                     Contingent
Obligations (including under letters of credit and other guarantees) of the
Borrower and its Domestic Subsidiaries with respect to Indebtedness and other
obligations of Joint Ventures, provided that at no time shall the
aggregate outstanding amount of such Contingent Obligations (calculated taking
the maximum liability thereunder) exceed the Permitted JV Investment Amount as
then in effect;

 

(m)                               earn-out, indemnities,
deferred purchase price amounts and purchase price adjustments pursuant to the
Acquisition Agreement or pursuant to any agreement for any Permitted
Acquisition;

 

(n)                                 Indebtedness of the
Borrower or any of its Subsidiaries arising in the ordinary course of business
from the honoring by a bank or other financial institution of a check, 

 

64

 

draft or similar instrument made by a third party to the Borrower or
such Subsidiary and drawn against insufficient funds;

 

(o)                                 Contingent Obligations
arising from guarantees made by (i) Qualified Credit Parties in the
ordinary course of business of obligations (other than Indebtedness, except for
Indebtedness permitted pursuant to Sections 8.04(c) and (d)) of other
Qualified Credit Parties otherwise permitted hereunder and (ii) Non-Wholly
Owned Domestic Subsidiaries in the ordinary course of business of obligations
(other than Indebtedness) of other Non-Wholly Owned Domestic Subsidiaries
otherwise permitted hereunder;

 

(p)                                 Contingent Obligations
arising from guarantees made by Foreign Subsidiaries in the ordinary course of
business of obligations of other Foreign Subsidiaries otherwise permitted
hereunder;

 

(q)                                 intercompany loans
permitted under Section 8.06(p);

 

(r)                                    Indebtedness
consisting of the financing of insurance premiums in the ordinary course of
business;

 

(s)                                  Indebtedness in
respect of the performance of tenders, statutory obligations, surety bonds,
bids, leases, government contracts, performance and return-of-money bonds and
other similar obligations incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money); and

 

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

 

8.05   Consolidated
Capital Expenditures.  (a)  Holdings
will not, and will not permit any of its Subsidiaries to, make Consolidated
Capital Expenditures, except that, the Borrower and its Subsidiaries may make
Consolidated Capital Expenditures so long as the aggregate amount of all such
Consolidated Capital Expenditures made during any fiscal year of Holdings does
not exceed $50,000,000.

 

(b)                                 In addition to the
foregoing, in the event that the amount of Consolidated Capital Expenditures
permitted to be made by the Borrower and its Subsidiaries pursuant to clause (a) above
in any fiscal year of Holdings (before giving effect to any increase in such
permitted Consolidated Capital Expenditure amount pursuant to this clause (b))
is greater than the amount of Consolidated Capital Expenditures actually made
by the Borrower and its Subsidiaries during such fiscal year (the “Unused
Permitted Capital Expenditures Amount”), the Borrower and its Subsidiaries may
carry forward such Unused Permitted Consolidated Capital Expenditure Amount and
make Consolidated Capital Expenditures in an amount equal to 50% of the Unused
Permitted Consolidated Capital Expenditure Amount, provided that no
amounts once carried forward pursuant to this Section 8.05(b) may be
carried forward to any fiscal year of Holdings thereafter.

 

8.06   Advances,
Investments and Loans.  Holdings will
not, and will not permit any of its Subsidiaries to, lend money or credit or
make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital 

 

65

 

contribution to any Person, or enter into any Other Hedging Agreement
or Interest Rate Protection Agreement; except:

 

(a)                                  (i) Holdings may
invest in cash and Cash Equivalents, (ii) the Borrower or any Domestic
Subsidiary may invest in (x) cash and Cash Equivalents and
(y) Foreign Cash Equivalents in an aggregate amount (for the Borrower and
all Domestic Subsidiaries) not to exceed (taking the Dollar Equivalent thereof)
$5,000,000 at any time outstanding and (iii) any Foreign Subsidiary of the
Borrower may invest in cash, Cash Equivalents and Foreign Cash Equivalents;

 

(b)                                 the Borrower and any
Subsidiary may acquire and hold receivables owing to them, if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms and/or reasonable extensions thereof;

 

(c)                                  (i) loans and
advances to officers, directors and employees in the ordinary course of
business in an aggregate principal amount not to exceed $2,000,000 at any time
outstanding shall be permitted, provided that no such loans or advances
may be made to any director (which is not an officer or employee) for
relocation purposes and (ii) loans and advances to officers, directors and
employees for the purpose of financing any such Person’s purchase of capital
stock of Holdings, provided that 100% of the proceeds from each such loan or
advance are used to purchase such capital stock and Holdings thereafter
immediately contributes 100% of the proceeds received as consideration for such
purchase to the common equity capital of the Borrower;

 

(d)                                 the Borrower and each
Subsidiary may acquire and own investments (including debt obligations)
received in connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of business;

 

(e)                                  advances, loans and
investments in existence on the Restatement Effective Date and listed on Schedule 8.06(e),
provided that any additions thereto or replacements thereof shall be required
to be independently justified under a separate clause of this Section 8.06;

 

(f)                                    (i) the
Borrower and each Subsidiary may make capital contributions to any of their
Subsidiaries that is a Qualified Credit Party, (ii) Foreign Subsidiaries
may make loans and advances and capital contributions to, and other investments
in, other Foreign Subsidiaries and (iii) Non-Wholly Owned Domestic
Subsidiaries may make loans and advances and capital contributions to, and
other investments in, other Non-Wholly Owned Domestic Subsidiaries;

 

(g)                                 Subsidiaries may be
established or created to the extent such Subsidiaries in each case comply with
the provisions of Section 7.10;

 

(h)                                 the Borrower and its
Subsidiaries may enter into Interest Rate Protection Agreements to the extent
permitted by Section 8.04(h) and the Borrower and its Subsidiaries
may enter into Other Hedging Agreements to the extent permitted by Section 8.04(g);

 

66

 

(i)                                     (x) Permitted
Acquisitions shall be permitted in accordance with Section 7.12 and the
definition thereof and (y) Investments of any Acquired Business or Entity
acquired pursuant to a Permitted Acquisition shall be permitted so long as such
Investments were not made in contemplation of such Permitted Acquisition;

 

(j)                                     Foreign
Subsidiaries may make loans and advances to the Borrower and its Domestic
Subsidiaries, provided that any and all such loans and advances made pursuant
to this clause (j) are subordinated to the Obligations pursuant to a
Subordination Agreement substantially in the form of Exhibit L;

 

(k)                                  so long as no Default
or Event of Default, in either case pursuant to Section 9.01 or 9.05
hereof, is then in existence or would exist immediately after giving effect
thereto, the Borrower and its Domestic Subsidiaries may make capital
contributions, loans or advances or other investments, to any Foreign
Subsidiary so long as the aggregate amount of all such cash capital
contributions, loans and advances and other investments made after the
Restatement Effective Date (without giving effect to any write-offs or
write-downs thereof) does not exceed the Permitted Foreign Investment Amount;

 

(l)                                     the Acquisition
shall be permitted;

 

(m)                               Qualified Credit Parties
may make intercompany loans and advances to one another in accordance with Section 8.04(b)(i),
provided that each such loan and advance shall be subordinated to the
Obligations pursuant to a Subordination Agreement substantially in the form of Exhibit L;

 

(n)                                 investments arising
from the receipt by the Borrower or any of its Subsidiaries of non-cash
consideration in connection with sales or dispositions of assets made under Section 8.02(f) shall
be permitted;

 

(o)                                 the Borrower may make
loans and advances to Holdings if, and to the extent that, Borrower would have
otherwise been permitted to pay Dividends in a like amount to Holdings pursuant
to Section 8.08(iii), (iv), (v) or (viii) hereof, provided
that any such loan shall reduce the amount permitted to be paid as Dividends
pursuant to Section 8.08(iii), (iv), (v) or (viii), as the case may
be, in an amount equal to the principal amount of each such loan (without
giving effect to the write-down or write-off thereof);

 

(p)                                 intercompany loans, in
each case made in connection with the Original Acquisition and described in Schedule 8.06(p);

 

(q)                                 so long as no Default
or Event of Default is in existence or would exist immediately after giving
effect thereto, loans and investments in, and acquisition of interests in,
Joint Ventures, provided that in no event shall the aggregate amount of any
loan, investment or acquisition made pursuant to this clause (q) exceed the
Permitted Joint Venture Amount at the time of the respective such loan,
investment or acquisition; and

 

(r)                                    so long as no
Default or Event of Default is in existence or would exist immediately after
giving effect thereto, other advances, loans and investments so long as the
aggregate amount thereof (determined as the amount originally advanced, loaned
or otherwise 

 

67

 

invested (without giving effect to any write-downs or write-offs
thereof), less any returns on the respective investment not to exceed the
original amount invested) at no time outstanding exceeds, when added to all
amounts deemed pursuant to Section 7.12(viii) to be a utilization of
the basket amount set forth in this clause (r), $5,000,000.

 

8.07   Modifications;
Prepayments; etc.  Holdings will not,
and will not permit any of its Subsidiaries to:

 

(a)                                  make (or give any
notice or offer in respect of) any voluntary or optional payment or prepayment
or redemption or acquisition for value of, or prepayment or redemption of as a
result of any change of control, asset sale or similar event (including in each
case, without limitation, by way of depositing with the trustee with respect
thereto money or securities before due for the purpose of paying when due), any
Senior Subordinated Notes, provided that the Borrower may (1) make
a tender offer in respect of outstanding Senior Subordinated Notes so long as
the consummation thereof is expressly conditioned upon (x) obtaining the
Required Lenders’ approval thereof, (y) the repayment in full in cash of all
the Obligations and the termination of all Commitments prior to or
contemporaneously with the consummation of such tender offer or (z) the
Borrower having received proceeds of Refinancing Indebtedness in respect of the
Senior Subordinated Notes in an amount sufficient to purchase the Senior
Subordinated Notes tendered (together with accrued and unpaid interest and
premium thereon) in connection with such tender offer or (2) redeem the
Senior Subordinated Notes in their entirety with proceeds of Refinancing
Indebtedness in respect thereof so long as no redemption notice in respect of
any such redemption is given prior to such time as when the proceeds of such
Refinancing Indebtedness (in an amount sufficient to redeem all outstanding
Senior Subordinated Notes and pay all accrued and unpaid interest and premium
thereon) are actually available to the Borrower;

 

(b)                                 (i) amend or
modify (or permit the amendment or modification of) any subordination provision
(or any definition related to any subordination provision) of the Senior
Subordinated Note Documents or (ii) amend or modify (or permit the
amendment or modification) of any other provision of any Senior Subordinated
Note Documents in any manner adverse to the interests of the Lenders; or

 

(c)                                  amend, modify or
change in any manner adverse to the interests of the Lenders the organizational
documents (including by-laws) of any Credit Party.

 

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

 

68

 

now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its Equity Interests)
(all of the foregoing “Dividends”), except that:

 

(i)                                     any Subsidiary of
the Borrower may pay Dividends or return capital or make distributions and
other similar payments with regard to its Equity Interests to the Borrower or
to a Wholly-Owned Subsidiary of the Borrower which owns equity therein;

 

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

 

(iii)                               so long as no Default or
Event of Default exists at the time of the respective Dividend, redemption or
repurchase or would exist immediately after giving effect thereto, the Borrower
may pay cash Dividends to Holdings (through Intermediate Holdco to the extent
same has been created) to allow Holdings to redeem or repurchase (and Holdings
may redeem or repurchase), contemporaneously with such Dividend, Equity
Interests of Holdings from officers, employees and directors (or their estates)
after the death, disability, retirement or termination of employment of any
such Person or otherwise in accordance with any stock option plan or any
employee stock ownership plan that has been approved by the Board of Directors
of Holdings, provided that the principal amount of Dividends made by the
Borrower to Holdings pursuant to this clause (iii), and the aggregate amount
paid by Holdings in respect of all such Equity Interests so redeemed or
repurchased, in any calendar year shall not, in either case, exceed(x)
$2,000,000 (the “Repurchase Basket Amount”) plus (y) the sum of (1) the
amount of cash equity contributed to Holdings (which, in turn, is contributed
to the Borrower) by new officers of Holdings or any of its Subsidiaries, (2) the
amount of proceeds received by Qualified Credit Parties from key-man life
insurance and (3) any unused portion of the Repurchase Basket Amount from
preceding fiscal years;

 

(iv)                              the Borrower may pay cash
Dividends to Holdings (through Intermediate Holdco to the extent same has been
created) so long as the proceeds thereof are promptly used by Holdings to pay
operating expenses in the ordinary course of business (including, without
limitation, indemnities, professional fees and expenses) and other similar
corporate overhead costs and expenses, provided that the aggregate
amount of cash Dividends paid pursuant to this clause (iv) during any
fiscal year of Holdings shall not exceed $1,000,000;

 

(v)                                 the Borrower may pay
cash Dividends to Holdings (through Intermediate Holdco to the extent same has
been created) in the amounts and at the times of any payment by Holdings in
respect of taxes, provided that (x) the amount of cash Dividends paid
pursuant to this clause (v) to enable Holdings to pay Federal and state
income taxes at any time shall not exceed the amount of such Federal and state
income taxes actually owing by Holdings at such time for the respective period
and (y) any refunds received by Holdings shall promptly be returned by Holdings
to the Borrower;

 

69

 

 

(vi)                              before the occurrence of
a Qualified Public Offering, Holdings may pay Dividends with the net cash
proceeds of substantially contemporaneous sales or issuances of its capital
stock (other than issuances or sales of its capital stock pursuant to a public
offering or Qualified Public Offering) to Persons other than its Subsidiaries;

 

(vii)                           any non-Wholly-Owned
Subsidiary of the Borrower may repurchase or redeem its outstanding minority
Equity Interests held by third Persons, provided that the aggregate amount of
payments made in respect of all such repurchases and redemptions shall not
exceed $1,000,000;

 

(viii)                        the Borrower may pay cash
Dividends to Holdings (through Intermediate Holdco to the extent same has been
created) in the amounts and at the times of any required payments by Holdings
(which will actually be paid with such cash Dividends) pursuant to the
Management Agreement (including, without limitation, for fees payable in
connection with the Transaction), so long as such amounts are then permitted to
be paid pursuant to Section 8.09(v) or (vi), as the case may be;

 

(ix)                                the Borrower may pay
cash Dividends to Holdings on the Restatement Effective Date so Holdings can
pay transaction fees described in Section 8.09(vii); and

 

(x)                                   Holdings may return
to Carlyle and other Persons cash equity contributions initially made by
Carlyle or such other Persons to Holdings to finance Permitted Acquisitions,
Capital Expenditures or investments in Joint Ventures or Foreign Subsidiaries
(in each case permitted hereunder), that have not been utilized for such
purposes, provided that (i) such cash equity contributions are returned
within 180 days following the respective cash equity contribution made by
Carlyle or such other Person to Holdings and (ii) such cash equity
contributions have not theretofore been contributed by Holdings to the Borrower
or any Subsidiary thereof.

 

8.09   Transactions
with Affiliates.  Holdings will not,
and will not permit any Subsidiary to, enter into any transaction or series of
transactions after the Restatement Effective Date whether or not in the
ordinary course of business, with any Affiliate other than on terms and
conditions substantially as favorable to Holdings or such Subsidiary as would
be obtainable by Holdings or such Subsidiary at the time in a comparable arm’s-length
transaction with a Person other than an Affiliate, except that the following in
any event shall be permitted:

 

(i)                                     Dividends may be
paid to the extent provided in Section 8.08;

 

(ii)                                  loans may be made and
other transactions may be entered into by Holdings and its Subsidiaries to the
extent permitted by Sections 8.02, 8.04 and 8.06;

 

(iii)                               customary fees and
indemnifications may be paid to directors of Holdings and its Subsidiaries;

 

(iv)                              Holdings and its
Subsidiaries may enter into, and may make payments under, employment
agreements, employee benefits plans, stock option plans, indemnification
provisions and other similar compensatory arrangements with officers,

 

70

 

employees and directors of Holdings and its
Subsidiaries in the ordinary course of business;

 

(v)                                 Holdings and/or the
Borrower may pay management fees and transaction fees to Carlyle and the
Carlyle Affiliates pursuant to the terms of the Management Agreement;

 

(vi)                              Holdings and/or the
Borrower may reimburse Carlyle and the Carlyle Affiliates for their reasonable
out-of-pocket expenses pursuant to the terms of the Management Agreement; and

 

(vii)                           Holdings and/or the Borrower
may pay transaction fees on the Restatement Effective Date in connection with
the Transaction so long as the aggregate amount of fees paid to all such
Persons pursuant to this clause (vii) does not exceed $5,000,000.

 

Notwithstanding anything to the contrary contained above in this Section 8.09,
in no event shall Holdings or any of its Subsidiaries pay any management,
consulting or similar fee to Carlyle or any Carlyle Affiliate except as
specifically provided in clauses (v), (vi) and/or (vii) of this Section 8.09.

 

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

 

	
  Fiscal Quarter Ending

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2005

  	
   

  	
  2.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2005

  	
   

  	
  2.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2005

  	
   

  	
  2.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2006

  	
   

  	
  2.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2006

  	
   

  	
  2.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2006

  	
   

  	
  2.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2006

  	
   

  	
  2.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2007

  	
   

  	
  2.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2007

  	
   

  	
  2.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2007

  	
   

  	
  2.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2007

  	
   

  	
  2.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2008

  	
   

  	
  2.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2008

  	
   

  	
  3.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2008

  	
   

  	
  3.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2008

  	
   

  	
  3.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2009

  	
   

  	
  3.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2009

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2009

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2009

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2010

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2010

  	
   

  	
  3.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2010

  	
   

  	
  3.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2010

  	
   

  	
  3.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2011

  	
   

  	
  3.50:1.00

  	
   

  

 

71

 

8.11   Consolidated
Leverage Ratio.  Holdings will not
permit the Consolidated Leverage Ratio on the last day of any Test Period
ending on the last day of any fiscal quarter set forth below to be more than
the ratio set forth opposite such fiscal quarter: 

 

	
  Fiscal Quarter Ending

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2005

  	
   

  	
  5.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2005

  	
   

  	
  5.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2005

  	
   

  	
  5.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2006

  	
   

  	
  5.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2006

  	
   

  	
  5.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2006

  	
   

  	
  5.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2006

  	
   

  	
  5.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2007

  	
   

  	
  5.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2007

  	
   

  	
  5.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2007

  	
   

  	
  4.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2007

  	
   

  	
  4.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2008

  	
   

  	
  4.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2008

  	
   

  	
  4.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2008

  	
   

  	
  4.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2008

  	
   

  	
  3.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2009

  	
   

  	
  3.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2009

  	
   

  	
  3.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2009

  	
   

  	
  3.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2009

  	
   

  	
  3.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2010

  	
   

  	
  3.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2010

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2010

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31,
  2010

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2011

  	
   

  	
  3.25:1.00

  	
   

  

 

72

 

8.12   Limitation
On Issuance of Stock.  (a)  Holdings
will not issue (i) any preferred Equity Interests other than Qualified
Preferred Stock or (ii) any redeemable common Equity Interests other than
common Equity Interests that are redeemable at the sole option of Holdings.

 

(b)                                 Holdings will not
permit any of its Subsidiaries, directly or indirectly, to issue any Equity
Interests (or warrants, rights or options to acquire Equity Interests), except (i) for
replacements of then outstanding Equity Interests, (ii) for stock splits,
stock dividends and other issuances which do not decrease the percentage
ownership of the Borrower and its Subsidiaries taken as a whole in any class of
the capital stock of such Subsidiary, (iii) for issuances to the Borrower
or any of its Subsidiaries in connection with the creation of new Subsidiaries
not in violation of this Agreement (so long as Holdings and its Subsidiaries
comply with Section 7.10 in connection therewith), (iv) to qualify
directors to the extent required by applicable law, (v) in the case of
Foreign Subsidiaries, for nominal amounts of shares held by a third Person to
the extent required by applicable law and other de minimis issuances of
equity by Foreign Subsidiaries if deemed necessary or desirable by the Borrower
and (vi) for issuances by any Foreign Subsidiary of its Equity Interests
to other Foreign Subsidiaries.

 

8.13   Change
of Legal Names; Type of Organization (and Whether a Registered Organization);
Jurisdiction of Organization; etc. 
No Credit Party shall change its legal name, its type of organization,
its jurisdiction of organization, or its organizational identification number
(if any), except that any such changes shall be permitted (so long as same do
not involve any Credit Party changing its jurisdiction of organization from the
United States or a State thereof to a jurisdiction of organization outside the
United States or a State thereof) if (i) the Borrower shall give to the Administrative
Agent notice promptly, and in any event within 30 days, after such change,
written notice thereof (which written notice shall set forth in reasonable
detail the changes so made), and (ii) in connection with the respective
such change or changes, it shall take all action reasonably requested by the
Collateral Agent to maintain the security interests of the Collateral Agent in
the Collateral intended to be granted hereby pursuant to the Security Documents
at all times fully perfected and in full force and effect.

 

8.14   No
Designation of Other Indebtedness as “Designated Senior Indebtedness”.  The Borrower will not, and will not permit
any of its Subsidiaries to, designate any Indebtedness (other than the
Obligations) of the Borrower or any such Subsidiary as “Designated Senior
Indebtedness” for the purposes of any Subordinated Note Documents.

 

8.15   Limitations
on Restrictions Affecting Subsidiaries. 
Holdings will not, and will not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist (other than as a result of a
requirement of law) any encumbrance or restriction which prohibits or otherwise
restricts (A) the ability of any Subsidiary to (a) pay Dividends or
make other distributions or pay

 

73

 

any Indebtedness owed to Holdings or any Subsidiary, (b) make
loans or advances to Holdings or any Subsidiary, (c) transfer any of its
properties or assets to Holdings or any Subsidiary or (B) the ability of
Holdings or any other Subsidiary of Holdings to create, incur, assume or suffer
to exist any Lien upon its property or assets to secure the Obligations, other
than prohibitions or restrictions existing under or by reason of:  (i) this Agreement, the other Credit
Documents, the Senior Subordinated Note Documents and any definitive agreement
evidencing or governing Refinancing Indebtedness in respect of the Senior
Subordinated Notes so long such prohibitions and restrictions are no less
favorable to either Holdings or its Subsidiaries or to the Lenders than those
contained in the Senior Subordinated Note Documents; (ii) applicable law,
regulation or judicial order; (iii) customary non-assignment provisions
entered into in the ordinary course of business and consistent with past practices;
(iv) any restriction or encumbrance with respect to a Subsidiary imposed
pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all of the capital stock or assets of such
Subsidiary, so long as such sale or disposition is permitted under this
Agreement; (v) Liens permitted under Sections 8.03(d), (l), (m), (n) and
(s) and any documents or instruments governing the terms of any Indebtedness or
other obligations secured by any such Liens, provided that such prohibitions or
restrictions apply only to the assets subject to such Liens; (vi) provisions
(relating solely to one or more Foreign Subsidiaries) contained in agreements
related to or instruments evidencing Indebtedness incurred pursuant to Section 8.04(i) and
(vii) customary provisions in joint venture agreements and similar
agreements that restrict the transfer of Equity Interests in Joint Ventures
(which are not Subsidiaries of the Borrower) subject to such agreements.

 

SECTION 9.
   Events of Default. 
Upon the occurrence of any of the following specified events (each, an “Event
of Default”):

 

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

 

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

 

9.03   Covenants.  Any Credit Party shall (a) default in
the due performance or observance by it of any term, covenant or agreement
contained in Sections 7.01(f)(i), 7.05 (as it relates to the corporate
existence of the Borrower), 7.09 (as it relates to Holdings or the Borrower),
7.10(a), 7.13 and 8, or (b) default in the due performance or observance
by it of any term, covenant or agreement (other than those referred to in Section 9.01,
9.02 or clause (a) of this Section 9.03) contained in this Agreement
and such default shall continue unremedied for a period of at least 30 days
after written notice to the defaulting party by the Administrative Agent or the
Required Lenders; or

 

9.04   Default
Under Other Agreements.  (a)  Holdings
or any of its Subsidiaries shall (i) default in any payment with respect
to any Indebtedness (other than the Obligations) beyond the period of grace, if
any, applicable thereto or (ii) default in the observance or per-

 

74

 

formance of any agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to permit
the holder or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause, any such Indebtedness to become due prior to
its stated maturity; or (b) any such Indebtedness of Holdings or any of
its Subsidiaries shall be declared to be due and payable (or shall be required
to be prepaid as a result of a default thereunder or of an event of the type
that constitutes an Event of Default) prior to the stated maturity thereof, provided
that (i) Holdings’ or any of its Subsidiaries’ delivery of a notice of a
voluntary prepayment of Indebtedness outstanding under Section 8.04(c),
(d), (i) or (t) the result of which is to cause such Indebtedness pursuant
to the terms thereof to become due prior to its stated maturity shall not in
and of itself constitute an Event of Default under clause (a)(ii) of this Section 9.04
and (ii) it shall not constitute an Event of Default pursuant to this Section 9.04
unless the aggregate principal amount of all Indebtedness referred to in
clauses (a) and (b) above exceeds $10,000,000 in the aggregate at any
one time; or

 

9.05   Bankruptcy,
etc.  Holdings or any of its
Subsidiaries (other than one or more Immaterial Subsidiaries) shall commence a
voluntary case concerning itself under Title 11 of the United States Code
entitled “Bankruptcy”, as now or hereafter in effect, or any successor thereto
(the “Bankruptcy Code”); or an involuntary case is commenced against Holdings
or any of its Subsidiaries (other than one or more Immaterial Subsidiaries) and
the petition is not controverted within 30 days, or is not dismissed within 60
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of Holdings or any of its Subsidiaries (other than one or more
Immaterial Subsidiaries); or Holdings or any of its Subsidiaries (other than
one or more Immaterial Subsidiaries) commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to Holdings or any of its
Subsidiaries (other than one or more Immaterial Subsidiaries); or there is
commenced against Holdings or any of its Subsidiaries (other than one or more
Immaterial Subsidiaries) any such proceeding which remains undismissed for a
period of 60 days; or Holdings or any of its Subsidiaries (other than one or more
Immaterial Subsidiaries) is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or
Holdings or any of its Subsidiaries (other than one or more Immaterial
Subsidiaries) suffers any appointment of any custodian or the like for it or
any substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or Holdings or any of its Subsidiaries (other than one or
more Immaterial Subsidiaries) makes a general assignment for the benefit of
creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries (other than one or more Immaterial Subsidiaries) for the purpose
of effecting any of the foregoing; or

 

9.06   ERISA.  (a)  Any Plan shall fail to satisfy
the minimum funding standard required for any plan year or part thereof under Section 412
of the Code or Section 302 of ERISA or a waiver of such standard or
extension of any amortization period is sought or granted under Section 412
of the Code or Section 303 or 304 of ERISA, a Reportable Event shall have
occurred, a contributing sponsor (as defined in Section 4001(a)(13) of
ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard
to subparagraph (b)(1) thereof) and an event described in 

 

75

 

subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043
shall be reasonably expected to occur with respect to such Plan within the
following 30 days, any Plan which is subject to Title IV of ERISA shall have
had or is likely to have a trustee appointed to administer such Plan, any Plan
which is subject to Title IV of ERISA is, shall have been or is likely to be
terminated or to be the subject of termination proceedings under ERISA, any
Plan shall have an Unfunded Current Liability, a contribution required to be
made with respect to a Plan or a Foreign Pension Plan has not been timely made,
Holdings, the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
has incurred or is likely to incur any liability to or on account of a Plan
under Section 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Holdings, the Borrower or any Subsidiary of the Borrower has incurred or is
likely to incur any liability to or on account of a Plan (other than an ERISA
Affiliate Plan) under Section 409, 502(i), 502(l) or Section 401(a)(29),
4971 or 4975 of the Code or on account of a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code or 45 Code of Federal
Regulations Section 160.103) under Section 4980B of the Code and/or
the Health Insurance Portability and Accountability Act of 1996, as amended, or
Holdings, the Borrower or any Subsidiary of the Borrower has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to
retired employees or other former employees (other than as required by Part 6
of Title I, Subtitle B of ERISA and Section 4980B of the Code) or Plans or
Foreign Pension Plans in addition to the liability that existed on the
Restatement Effective Date pursuant to any such employee welfare benefit plan,
Foreign Pension Plan, or Plan; (b) there shall result from any such event
or events described in subsection (a) the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; and (c) such lien, security interest or liability,
individually, and/or in the aggregate, in the reasonable opinion of the
Required Lenders, has had, or is reasonably likely to have, a Material Adverse
Effect; or

 

9.07   Security
Documents.  (a)  Any Security
Document shall cease to be, in any material respect, in full force and effect,
or shall cease, in any material respect, to give the Collateral Agent the Liens
(with the perfection and priority purported to be created thereby), purported
to be created thereby in favor of the Collateral Agent, or (b) any Credit
Party shall default in the due performance or observance of any material term,
covenant or agreement on its part to be performed or observed pursuant to any
such Security Document and such default shall continue unremedied for a period
of at least 30 days after written notice to the respective Credit Party by the
Administrative Agent; or

 

9.08   Guaranty.  Any of the Guaranties or any material
provision thereof shall cease to be in full force and effect other than
pursuant to the terms thereof, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor’s obligations
under any Guaranty; or

 

9.09   Judgments.  One or more judgments or decrees shall be
entered against Holdings or any of its Subsidiaries (other than one or more
Immaterial Subsidiaries) involving a liability (to the extent not paid or
covered by insurance) in excess of $10,000,000 in the aggregate for all such
judgments and decrees for Holdings and its Subsidiaries (other than one or more
Immaterial Subsidiaries), and all such judgments and decrees in excess of such
amount shall not have been vacated, discharged or stayed or bonded pending
appeal within 60 days from the entry thereof; or

 

76

 

9.10   Change
of Control.  A Change of Control
shall occur;

 

then, and in any such event, and at any time thereafter, if any Event
of Default shall then be continuing, the Administrative Agent shall, upon the
written request of the Required Lenders, by written notice to the Borrower,
take any or all of the following actions, without prejudice to the rights of
the Administrative Agent or any Lender to enforce its claims against any
Guarantor or the Borrower (provided that, if an Event of Default
specified in Section 9.05 shall occur with respect to Holdings or the
Borrower, the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall
occur automatically without the giving of any such notice):  (i) declare the Total Commitment
terminated, whereupon the Commitment of each Lender shall forthwith terminate
immediately and any Commitment Commission shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal
of and any accrued interest in respect of all Loans and all other obligations
owing hereunder (including Unpaid Drawings) and under the other Credit
Documents to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; (iii) enforce, as Collateral Agent (or
direct the Collateral Agent to enforce), any or all of the Liens and security
interests created pursuant to the Security Documents; (iv) terminate any
Letter of Credit which may be terminated in accordance with its terms; and (v) direct
the Borrower to pay (and the Borrower hereby agrees upon receipt of such
notice, or upon the occurrence of any Event of Default specified in Section 9.05
in respect of the Borrower, it will pay) to the Collateral Agent at the Payment
Office such additional amounts of cash, to be held as security for the Borrower’s
reimbursement obligations in respect of Letters of Credit then outstanding
equal to the aggregate Stated Amount of all Letters of Credit then outstanding.

 

SECTION 10.
  Definitions and Accounting Terms.

 

10.01
  Defined Terms.  As
used herein, the following terms shall have the meanings herein specified unless
the context otherwise requires.  Defined
terms in this Agreement shall include in the singular number the plural and in
the plural the singular:

 

“Acquired Entity or Business” shall mean
either (x) the assets constituting a business, division or product line of any
Person not already a Subsidiary of Holdings or (y) (i) in the case of
any such Person which is incorporated or organized in the United States or any
state or territory thereof, 100% of the Equity Interests of any such Person,
which Person shall, as a result of such acquisition of Equity Interests, become
a Wholly-Owned Domestic Subsidiary of the Borrower (or shall be merged with and
into the Borrower or another Qualified Credit Party, with the Borrower or such
other Qualified Credit Party being the surviving Person) and (ii) in the
case of any such Person organized outside of the United States or any State or
territory thereof, the Equity Interests of such Person which Person shall as a
result of such acquisition of Equity Interests become a Foreign Subsidiary of
the Borrower.

 

“Acquisition” shall mean the acquisition by
the Borrower or another Qualified Credit Party of the Falk Business pursuant to
the Acquisition Agreement.

 

“Acquisition Agreement” shall mean the Stock
Purchase Agreement, dated as of April 5, 2005 by and among Falk, Hamilton
Sundstrand Corporation, and the Borrower (it being 

 

77

 

understood that the Borrower may assign the Acquisition Agreement and
its rights thereunder to another Qualified Credit Party in accordance with Section 10.6(c) thereof).

 

“Acquisition Documents” shall mean the
Acquisition Agreement and all other material agreements and documents relating
to the Acquisition, as same may be amended, modified or supplemented from time
to time pursuant to the terms hereof and thereof.

 

“Additional Mortgages” shall have the meaning
provided in Section 7.10.

 

“Adjusted Cash Flow” for any fiscal year of
Holdings shall mean Consolidated Net Income for such fiscal year (after provision
for taxes) plus (without duplication) the sum of (x) the amount of all
non-cash charges (including, without limitation, depreciation, deferred tax
expense, non-cash interest expense, amortization and other non-cash charges,
but excluding non-cash charges specifically dealt with in following clauses (y)
and (z)) and losses from sales of assets (other than sales of inventory and
equipment in the normal course of business) that were deducted in arriving at
Consolidated Net Income for such fiscal year, (y) the amount, if positive, by
which the tax expense deducted in arriving at Consolidated Net Income for such
fiscal year (excluding the tax effects of gains and losses on sales of assets
(other than sales of inventory and equipment in the normal course of business))
exceeds the actual taxes paid in respect of such fiscal year (excluding amounts
attributable to gains or losses on sales of assets (other than sales of
inventory and equipment in the normal course of business)) and (z) the amount,
if positive, by which the expense for pension and post-retirement obligations
deducted in arriving at Consolidated Net Income for such fiscal year exceeds
the cash payments made during such fiscal year in respect of pension and
post-retirement funding obligations, minus (without duplication) the sum
of (w) the amount of all non-cash gains (but excluding non-cash gains
specifically dealt with below) and gains from sales of assets (other than sales
of inventory and equipment in the normal course of business) that were added in
arriving at Consolidated Net Income for such fiscal year, (x) the actual cash
payments made in such fiscal year in respect of non-cash charges taken in
determining Consolidated Net Income for previous fiscal years, (y) the amount,
if positive, by which the actual taxes paid in respect of such fiscal year
(excluding taxes payable on gains from sales of assets (other than sales of
inventory and equipment in the normal course of business)) exceeds the tax
expense (excluding the portion thereof attributable to gains or losses on sales
of assets (other than sales of inventory and equipment in the normal course of
business)) deducted in arriving at Consolidated Net Income for such fiscal year
and (z) the amount, if positive, by which the cash payments made during such
fiscal year in respect of pension and post-retirement funding obligations
exceeds the expense for pension and post-retirement obligations deducted in
determining Consolidated Net Income for such fiscal year.

 

“Adjusted Consolidated Working Capital” shall
mean, at any time, Consolidated Current Assets (but excluding therefrom all
cash, Cash Equivalents and Foreign Cash Equivalents) less Consolidated Current
Liabilities at such time.

 

“Adjusted RF Percentage” shall mean (x) at a
time when no Lender Default exists, for each Lender, such Lender’s RF
Percentage and (y) at a time when a Lender Default exists (i) for each
Lender that is a Defaulting Lender, zero and (ii) for each Lender that is
a Non-Defaulting Lender, the percentage determined by dividing such Lender’s
Revolving Commitment at such time by the Adjusted Total Revolving Commitment at
such time, it being 

 

78

 

understood that all references herein to Revolving Commitments and the
Adjusted Total Revolving Commitment at a time when the Total Revolving
Commitment has been terminated shall be references to the Revolving Commitments
or Adjusted Total Revolving Commitment, as the case may be, in effect
immediately prior to such termination, provided that (A) no Lender’s
Adjusted RF Percentage shall change upon the occurrence of a Lender Default
from that in effect immediately prior to such Lender Default if after giving
effect to such Lender Default, and any repayment of Revolving Loans and
Swingline Loans at such time pursuant to Section 4.02(A)(a) or
otherwise, the sum of (i) the aggregate outstanding principal amount of
Revolving Loans of all Non-Defaulting Lenders, plus (ii) the aggregate
outstanding principal amount of all Swingline Loans, plus (iii) the
aggregate amount of Letter of Credit Outstandings, exceeds the Adjusted Total
Revolving Commitment; (B) the changes to the Adjusted RF Percentage that
would have become effective upon the occurrence of a Lender Default but that
did not become effective as a result of the preceding clause (A) shall
become effective on the first date after the occurrence of the relevant Lender
Default on which the sum of (i) the aggregate outstanding principal amount
of the Revolving Loans of all Non-Defaulting Lenders, plus (ii) the
aggregate outstanding principal amount of all Swingline Loans, plus (iii) the
aggregate amount of Letter of Credit Outstandings is equal to or less than the
Adjusted Total Revolving Commitment; and (C) if (i) a Non-Defaulting
Lender’s Adjusted RF Percentage is changed pursuant to the preceding clause (B) and
(ii) any repayment of such Lender’s Revolving Loans, Swingline Loans or
Unpaid Drawings that were made during the period commencing after the date of
the relevant Lender Default and ending on the date of such change to its
Adjusted RF Percentage must be returned to the Borrower as a preferential or
similar payment in any bankruptcy or similar proceeding of the Borrower, then
the change to such Non-Defaulting Lender’s Adjusted RF Percentage effected
pursuant to said clause (B) shall be reduced to that positive change, if
any, as would have been made to its Adjusted RF Percentage if (x) such
repayments had not been made and (y) the maximum change to its Adjusted RF
Percentage would have resulted in the sum of the outstanding principal of
Revolving Loans made by such Lender plus such Lender’s new Adjusted RF
Percentage of the outstanding principal amount of Swingline Loans and of Letter
of Credit Outstandings equaling such Lender’s Revolving Commitment at such
time.

 

“Adjusted Total Revolving Commitment” shall
mean at any time the Total Revolving Commitment less the aggregate Revolving
Commitments of all Defaulting Lenders.

 

“Administrative Agent” shall have the meaning
provided in the first paragraph of this Agreement and shall include any
successor to the Administrative Agent appointed pursuant to Section 11.09.

 

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

 

“Affiliate” shall mean, with respect to any
Person, any other Person directly or indirectly controlling, controlled by, or
under direct or indirect common control with such Person.  A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.

 

79

 

“Agent” shall mean each of the Administrative
Agent, the Collateral Agent, each Co-Documentation Agent and each Joint Lead
Arranger.

 

“Aggregate Consideration” shall mean, with
respect to any Permitted Acquisition, the aggregate consideration paid and
reasonably expected to be paid in connection therewith as determined at the
time of the consummation thereof, including, without limitation (without duplication),
(i) the aggregate amount of all cash, Cash Equivalents and Foreign Cash
Equivalents paid or payable in connection therewith, (ii) the aggregate
principal amount of all Indebtedness assumed, refinanced, incurred or issued in
connection therewith, (iii) the aggregate amount paid and reasonably
expected to be paid (based on the Borrower’s good faith estimates of such
payments) pursuant to any earn-out, non-compete agreement, consulting
arrangement, purchase price adjustments, deferred purchase price and/or similar
arrangements, and (iv) the aggregate fair market value of any other
consideration (as reasonably determined by the Borrower); provided that the
Aggregate Consideration for any Permitted Acquisition shall exclude all
consideration in the form of common stock of Holdings or Qualified Preferred
Stock, as well as all cash proceeds contributed to the Borrower or the
respective Subsidiary from a substantially contemporaneous issuance by Holdings
of its common stock or Qualified Preferred Stock.

 

“Agreement” shall mean this Amended and
Restated Credit Agreement, as the same may be from time to time further
modified, amended, restated (including any amendment and restatement hereof) or
supplemented.

 

“Agreement to Amend and Restate” shall mean
that certain Agreement to Amend and Restate, dated the date hereof among
Holdings, the Borrower, the Administrative Agent, the Existing Lenders party
thereto and the other Lenders party thereto.

 

“Alternate Currency” shall mean, with respect
to any Letter of Credit, Canadian Dollars, Australian Dollars, Pounds Sterling,
Philippine Pesos and Euros and any other currency other than Dollars as may be
acceptable to the Administrative Agent and the Letter of Credit Issuer with
respect thereto in their sole discretion.

 

“Anticipated Reinvestment Amount” shall mean,
with respect to any Reinvestment Election, the amount specified in the
Reinvestment Notice delivered by the Borrower in connection therewith as the
amount of the Net Cash Proceeds from the related Asset Sale that the Borrower
intends to use to purchase, construct or otherwise acquire Reinvestment Assets.

 

“Applicable ECF Prepayment Percentage” shall
mean with respect to any Excess Cash Payment Date (i) 50%, if the
Consolidated Leverage Ratio as at the last day of the then most recently ended
fiscal year of Holdings is greater than 3.00:1.00, (ii) 25%, if the
Consolidated Leverage Ratio as at the last day of the then most recently ended
fiscal year of Holdings is less than or equal to 3.00:1.00 but greater than
2.50:1.00 and (iii) 0%, if the Consolidated Leverage Ratio as at the last
day of the then most recently ended fiscal year of is less than or equal to
2.50:1.00.  Notwithstanding anything to
the contrary contained in this definition, if a Specified Default exists and is
continuing on an Excess Cash Payment Date, the Applicable ECF Percentage with
respect to such Excess Cash Payment Date shall be 50%.

 

80

 

“Applicable Margin” for any day during the
respective period means the respective percentage per annum set forth below
under the appropriate column, opposite the respective Level (i.e., Level
1, Level 2, Level 3 or Level 4, as the case may be) of the Consolidated
Leverage Ratio indicated to have been achieved in the respective officer’s
certificate delivered as required below:

 

	
  Level

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  	
  Term Loans

  maintained as

  Eurodollar 

  Loans

  	
   

  	
  Term Loans

  maintained 

  as Base Rate

  Loans

  	
   

  	
  Revolving 

  Loans 

  maintained as

  Eurodollar 

  Loans

  	
   

  	
  Revolving 

  Loans

  maintained

  as Base 

  Rate Loans

  and 

  Swingline

  Loans

  	
   

  
	
  4

  	
   

  	
  Greater than
  4.00:1.00

  	
   

  	
  2.25

  	
  %

  	
  1.00

  	
  %

  	
  2.25

  	
  %

  	
  1.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Greater than
  3.75:1.00 but less than or equal to 4.00:1.00

  	
   

  	
  2.25

  	
  %

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Greater than
  3.50:1.00 but less than or equal to 3.75:1.00

  	
   

  	
  2.00

  	
  %

  	
  0.75

  	
  %

  	
  2.00

  	
  %

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Less than
  3.50:1.00

  	
   

  	
  2.00

  	
  %

  	
  0.75

  	
  %

  	
  1.75

  	
  %

  	
  0.50

  	
  %

  

 

with the Consolidated Leverage Ratio to be determined based on the
delivery of a certificate of Holdings by the chief financial officer or
controller of Holdings to the Administrative Agent (who shall make each such
certificate available to each Lender), within 60 days of the last day of any
fiscal quarter of Holdings (or 90 days in the case of the fiscal year end of Holdings)
(the date of each such delivery, the “Start Date”), which certificate shall set
forth the calculation of the Consolidated Leverage Ratio as at the last day of
the Test Period ended immediately prior to the relevant Start Date (or, if any
Significant Acquisition or Significant Asset Sale has occurred after the last
day of such Test Period and prior to the respective Start Date, with the
Consolidated Leverage Ratio to be calculated on a Post-Test Period Pro Forma
Basis as at the date the last such Significant Acquisition or Significant Asset
Sale was effected, after giving effect thereto) and the Applicable Margins
which shall be thereafter applicable (until same are changed or cease to apply
in accordance with this definition) shall be based upon the Consolidated
Leverage Ratio as so calculated, PROVIDED that at the time of the consummation
of any Significant Acquisition and any Significant Asset Sale, the chief
financial officer or controller of Holdings shall deliver to the Administrative
Agent a certificate setting forth the calculation of the 

 

81

 

Consolidated Leverage Ratio on a Post-Test Period Pro Forma
Basis (with Consolidated Debt to be determined on the date of the consummation
of the respective such Significant Acquisition or Significant Asset Sale, and
after giving effect thereto, and with Consolidated EBITDA to be calculated for
the Test Period most recently ended prior to the date on which such Significant
Acquisition or such Significant Asset Sale, as the case may be, is consummated
for which financial statements have been made available (or were required to be
made available) pursuant to Section 7.01(a) or (b), as the case may
be), and the date of such consummation shall be deemed to be a Start Date and
the Applicable Margins which shall be thereafter applicable (until same are
changed or cease to apply in accordance with this definition) shall be based
upon the Consolidated Leverage Ratio as so calculated.  The Applicable Margins so determined shall
apply, except as set forth in the succeeding sentence, from the relevant Start
Date to the earliest of (x) the date on which the next certificate is delivered
to the Administrative Agent, (y) the date on which the next Significant
Acquisition or the next Significant Asset Sale, as the case may be, is
consummated and (z) the date which is 60 (or, in the case of a fiscal year end,
90) days following the last day of the Test Period in which the previous Start
Date occurred (such earliest date, the “End Date”), at which time, if no
certificate has been delivered to the Administrative Agent indicating an
entitlement to new Applicable Margins (and thus commencing a new Start Date),
the Applicable Margins shall be those set forth in the table above determined
as if the Consolidated Leverage Ratio was greater than 4.00:1.00 until such
time as such certificate shall be delivered. 
Notwithstanding anything to the contrary contained above in this
definition, at any time when a Specified Default exists, the Applicable Margins
shall be those set forth in the table above determined as if the Consolidated
Leverage Ratio was greater than 4.00:1.00.

 

“Approved Bank” shall have the meaning
provided in the definition of Cash Equivalents.

 

“Approved Fund” shall have the meaning
provided in Section 12.04(g).

 

“Asset Sale” shall mean and include (x) the
sale, transfer or other disposition by Holdings or any Subsidiary to any Person
other than Holdings or a Wholly-Owned Subsidiary of Holdings of any asset of
the Borrower or such Subsidiary (other than sales, transfers or other
dispositions of inventory and/or obsolete equipment, in each case in the
ordinary course of business), (y) the sale or issuance by the Borrower or any
of its Subsidiaries of any Equity Interests to any Person (other than Holdings
or a Wholly-Owned Subsidiary of Holdings) and/or (z) the receipt by Holdings or
any Subsidiary of any insurance, condemnation or similar proceeds in connection
with a casualty or taking of any of its assets but in the case of clauses (x)
and (z) above, only to the extent that the Net Cash Proceeds of any such sale,
transfer or disposition (or series of such sales, transfers or dispositions) or
any such receipt of insurance, condemnation or similar proceeds is, in either
case, in excess of $1,000,000.

 

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

 

“Attributable Debt” in respect of a
Sale/Leaseback Transaction shall mean, as at the time of determination, the
present value (discounted at the interest rate borne at such time by Revolving
Loans maintained as Eurodollar Loans, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such 

 

82

 

Sale/Leaseback Transaction (including any period for which such lease
has been extended); provided, however, that if such Sale/Leaseback Transaction
results in a Capitalized Lease Obligation, the amount of Indebtedness
represented thereby shall be determined in accordance with the definition of
Capitalized Lease Obligations.

 

“Authorized Officer” shall mean any senior
officer of Holdings or the Borrower designated as such in writing to the
Administrative Agent by Holdings or by the Borrower.

 

“Bankruptcy Code” shall have the meaning
provided in Section 9.05.

 

“Base Rate” at any time shall mean the higher
of (i) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate and (ii) the Prime Lending Rate.

 

“Base Rate Loan” shall mean each Loan bearing
interest at the rates provided in Section 1.08(a).

 

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

 

“Borrowing” shall mean the incurrence of (i) Swingline
Loans by the Borrower from the Swingline Lender on a given date or (ii) one
Type of Loan pursuant to a single Facility by the Borrower from the Lenders
having Commitments with respect to such Facility on a pro  rata
basis on a given date (or resulting from conversions on a given date), having
in the case of Eurodollar Loans the same Interest Period; provided that
Base Rate Loans incurred pursuant to Section 1.10(b) shall be
considered part of any related Borrowing of Eurodollar Loans.

 

“Branch Profits Tax” shall mean the “branch
profits tax” imposed pursuant to Section 884 of the Code and any
substantially similar tax imposed by the laws of the jurisdiction in which the
applicable Lender is organized or the jurisdiction in which the principal
office or applicable lending office of such Lender is located or any
subdivision thereof or therein.

 

“Business Day” shall mean (i) for all
purposes other than as covered by clause (ii) below, any day excluding
Saturday, Sunday and any day which shall be in the City of New York a legal
holiday or a day on which banking institutions are authorized by law or other
governmental actions to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks in Dollar deposits in the
interbank Eurodollar market.

 

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

 

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

 

83

 

“Carlyle” shall mean TC Group L.L.C. (which
operates under the trade name “The Carlyle Group”), a Delaware limited
liability company.

 

“Carlyle Affiliate” shall mean any entity
controlled directly or indirectly by Carlyle.

 

“Cash Equivalents” shall mean (i) securities
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the full
faith and credit of the United States of America is pledged in support thereof)
having maturities of not more than one year from the date of acquisition, (ii) Dollar
denominated time deposits, certificates of deposit and bankers’ acceptances of
(x) any Lender that is a domestic commercial bank of recognized standing having
capital and surplus in excess of $500,000,000 or (y) any bank (or the parent
company of such bank) whose short-term commercial paper rating from Standard &
Poor’s Ratings Services, a division of McGraw-Hill, Inc. (“S&P”) is at
least A-1 or the equivalent thereof or from Moody’s Investors Service, Inc.
(“Moody’s”) is at least P-1 or the equivalent thereof (any such bank, an “Approved
Bank”), in each case with maturities of not more than one year from the date of
acquisition, (iii) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (ii) above,
(iv) commercial paper issued by any Approved Bank or by the parent company
of any Approved Bank and commercial paper issued by, or guaranteed by, any
industrial or financial company with a short-term commercial paper rating of at
least A-1 or the equivalent thereof by S&P or at least P-1 or
the equivalent thereof by Moody’s, or guaranteed by any industrial company with
a long term unsecured debt rating of at least A or A2, or the equivalent of
each thereof, from S&P or Moody’s, as the case may be, and in each case
maturing within six months after the date of acquisition, (v) marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either
S&P or Moody’s and (vi) investments in money market funds
substantially all of whose assets are comprised of securities of the type
described in clauses (i) through (v) above.

 

“Cash Proceeds” shall mean, with respect to
any Asset Sale, the aggregate cash payments (including any cash received by way
of deferred payment pursuant to a note receivable issued in connection with
such Asset Sale, other than the portion of such deferred payment constituting
interest, but only as and when so received) received by Holdings and/or any
Subsidiary from such Asset Sale.

 

“CERCLA” shall mean the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. § 9601 et  seq.

 

“Change of Control” shall mean, at any time
and for any reason whatsoever, (a) Holdings shall fail to own directly, or
indirectly through Intermediate Holdco, 100% on a fully diluted basis of either
the economic or voting interest in the Borrower’s Equity Interests or (b) Carlyle
and Carlyle Affiliates shall fail to have beneficial ownership (within the
meaning of Rule 13d-3 of the Exchange Act) in the aggregate of (i) prior
to any Qualified Public Offering, at least 51% of Holdings’ Equity Interests
having normal voting power in the election of directors 

 

84

 

or (ii) on and after a Qualified Public Offering, at least 30% (or
such higher percentage that exceeds the highest percentage of Holdings’ Equity
Interests having normal voting power in the election of directors owned by any
other person or group (as defined in Section 13(d) of the Exchange
Act)) of Holdings’ Equity Interests having normal voting power in the election
of directors or (c) after a Qualified Public Offering has occurred, the
Board of Directors of Holdings shall cease to consist of a majority of
Continuing Directors or (d) a “change of control” or similar event shall
occur as provided in the Senior Subordinated Note Documents.

 

“Co-Documentation Agent” shall mean each of
Wachovia and GECC in their capacity as such hereunder.

 

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

 

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

 

“Collateral Agent” shall mean the
Administrative Agent acting as collateral agent for the Lenders.

 

“Commitment” shall mean, with respect to each
Lender, such Lender’s New Term Loan Commitment, Incremental Term Loan
Commitment and Revolving Commitment.

 

“Commitment Commission” shall have the
meaning provided in Section 3.01(a).

 

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

 

“Consenting Term Loan Lender” shall mean each
Existing Term Loan Lender that has consented to converting its Existing Term
Loans pursuant to the Term Loan Conversion.

 

“Consolidated Capital Expenditures” shall
mean, for any period, the aggregate of all expenditures (including in all
events all amounts expended under Capital Leases but excluding any amount
representing capitalized interest) by the Borrower and its Subsidiaries during
that period that, in conformity with GAAP, are or are required to be included
in the property, plant or equipment reflected in the consolidated balance sheet
of the Borrower and its Subsidiaries, provided that Consolidated Capital
Expenditures shall in any event (x) exclude the purchase price paid in
connection with the acquisition of any Person (including through the purchase
of all of the Equity Interests of such Person or through merger or
consolidation) to the extent allocable to property, plant and equipment, (y)
exclude amounts expended to acquire Reinvestment Assets and (z) exclude interim
costs incurred during such period in connection with a proposed acquisition of
any Person to the extent such costs would constitute a part of the purchase
price for such acquisition upon its consummation; provided that at any
time such proposed acquisition is no longer expected to occur, all costs
excluded from this definition of Consolidated Capital Expenditures pursuant to
this clause (z) shall be reversed and expensed in the current period.

 

85

 

“Consolidated Current Assets” shall mean, at
any time, the consolidated current assets of Holdings and its Subsidiaries at
such time.

 

“Consolidated Current Liabilities” shall
mean, at any time, the consolidated current liabilities of Holdings and its
Subsidiaries at such time, but excluding the current portion of any
Indebtedness under this Agreement and the current portion of any other long
term Indebtedness which would otherwise be included therein.

 

“Consolidated Debt” shall mean, as of any
date of determination, (i) the aggregate principal amount of all
indebtedness for borrowed money and Capitalized Lease Obligations of Holdings
and its Subsidiaries on a consolidated basis as determined in accordance with
GAAP plus (ii) any principal amount of indebtedness for borrowed money or
Capitalized Lease Obligations of any other Person as to which Holdings and/or
any of its Subsidiaries has created a guarantee or other Contingent Obligation
(but only to the extent of such guarantee or other Contingent Obligation).

 

“Consolidated EBITDA” shall mean, for any
period, Consolidated Net Income (excluding gains or losses from sales of assets
(other than sales of inventory and equipment in a normal course of business))
for such period, adjusted by adding thereto (A) the sum of the amounts (in
each case without duplication) for such period (in each case, only to the extent
same reduced Consolidated Net Income for such period) of (i) provisions
for taxes based on income (excluding taxes attributable to gains and losses on
sales of assets (other than sales of inventory and equipment in the normal
course of business)), (ii) Consolidated Interest Expense, (iii) depreciation
expense, (iv) amortization expense, (v) other non-cash charges, (vi) amortization
or write-off of deferred financing costs, (vii) extraordinary losses and
one-time charges (including restructuring charges), (viii) cash payments
in an aggregate amount not to exceed $22,500,000 made in connection with the
restructuring of Holdings and its Subsidiaries after the Restatement Effective
Date that are identified in reasonable detail to the Administrative Agent, provided
that no such payments may be added back to Consolidated Net Income pursuant to
this clause (viii) at any time following the third anniversary of the
Restatement Effective Date, (ix) an amount not to exceed $5,000,000 for
any Test Period of any reduction in inventory, as reflected on the balance
sheet of Holdings and its Subsidiaries (on a “first-in-first-out” basis) during
any period, (x) write-off of amortization related to write-up of assets due to
purchase accounting, (xi) fees and expenses incurred in connection with the
Documents or the Transaction, and (xii) up-front management fees payable at the
time of the closing of the Transaction pursuant to the Management Agreement,
plus additional management fees payable pursuant to the Management Agreement in
any fiscal year not to exceed $2,000,000, minus (B) (i) the aggregate
amount of cash payments made during such period in respect of non-cash charges
from prior periods or in respect of extraordinary losses and one-time charges
(including restructuring charges which, for the avoidance of doubt, shall not
include up to $22,500,000 of restructuring charges made prior to the third
anniversary of the Restatement Effective Date) whether or not such losses or
one-time charges were taken in such period or a prior period; provided
that (subject to adjustments which may be required to be made for Significant
Acquisitions and Significant Asset Sales occurring after the Restatement
Effective Date, in the case of determinations of Consolidated EBITDA being made
on a Pro  Forma Basis or a Post-Test Period Pro  Forma
Basis), Consolidated EBITDA for Holdings’ fiscal quarters ended 

 

86

 

September 30, 2004, December 31, 2004, March 31, 2005
and June 30, 2005 shall be deemed to be $39,400,000, $33,000,000,
$53,200,000 and $39,500,000, respectively.

 

“Consolidated Interest Coverage Ratio” shall
mean, for any period, the ratio of (i) Consolidated EBITDA for such period
to (ii) Consolidated Interest Expense for such period.

 

“Consolidated Interest Expense” shall mean,
for any period, total interest expense (including the portion that is
attributable to Capital Leases in accordance with GAAP) of Holdings and its
Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness
of Holdings and its Subsidiaries (including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and without duplication net costs
and/or net benefits under Interest Rate Protection Agreements, but excluding,
however, amortization of deferred financing costs to the extent included in
total interest expense), less interest income of Holdings and its Subsidiaries
on a consolidated basis for such period; provided that (subject to
adjustments which may be required to be made for Significant Acquisitions and
Significant Asset Sales occurring after the Restatement Effective Date, in the
case of determinations of Consolidated Interest Expense being made on a Post-Test
Period Pro  Forma Basis), Consolidated Interest Expense for each
of Holdings’ fiscal quarters ended September 30, 2004, December 31,
2004, March 31, 2005 and June 30, 2005 shall be deemed to be to be
$15,300,000, $15,200,000, $15,400,000 and $15,500,000.

 

“Consolidated Leverage Ratio” shall mean, at
any date of determination, the ratio of (i) Consolidated Debt on such date
to (ii) Consolidated EBITDA for the Test Period then most recently ended; provided
that (x) in the case of any determination of the Consolidated Leverage Ratio
being made on the last day of a Test Period, Consolidated Debt shall be
determined based on the actual amount of Consolidated Debt outstanding on the
last day of the respective Test Period in accordance with the provisions of Section 10.02
and Consolidated EBITDA shall be determined on a Pro  Forma Basis
(in accordance with Section 10.02) to give effect to all Significant
Acquisitions and Significant Asset Sales (in each case, if any) made after the
Restatement Effective Date and during the respective Test Period and (y) in the
case of any determination of Consolidated Leverage Ratio being made on (or as
at) any date other than the last date of a Test Period, Consolidated Debt shall
be calculated as the actual amount outstanding on the date of determination in
accordance with the provisions of Section 10.02 and Consolidated EBITDA
shall be determined on a Post-Test Period Pro  Forma Basis to give
effect to all Significant Acquisitions and Significant Asset Sales (in each
case, if any) actually made after the Restatement Effective Date and during the
respective Test Period or thereafter and on or prior to the date of the
required determination thereof (in the case of any determinations pursuant to Section 7.12
and the definition of Applicable Margin, after giving effect to the respective
events which require the determination to be made on a Post-Test Period Pro
Forma Basis).

 

“Consolidated Net Income” shall mean for any
period, the net income (or loss) of Holdings and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP, provided that (i) the net
income of any Person which is not a Subsidiary of Holdings or is accounted for
by Holdings by the equity method of accounting shall be included only to the
extent of the payment of cash dividends or other cash distributions by such
other Person to Holdings or any of its Subsidiaries during such period, and (ii) to
the extent that Consolidated Net Income reflects amounts attributable to
minority interests

 

87

 

in Subsidiaries, Consolidated Net Income shall be reduced by the
amounts attributable to such minority interests.

 

“Contingent Obligations” shall mean as to any
Person any obligation of such Person guaranteeing or intending to guarantee any
Indebtedness, leases, dividends or other obligations (“primary obligations”) of
any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such
primary obligation or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the owner of such
primary obligation against loss in respect thereof, provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.  The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated maximum of the Contingent
Obligation or, if none, the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if there
is no stated or determinable amount of the primary obligation, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.

 

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

 

“Converted Existing Term Loan” shall have the
meaning set forth in Section 1.01(a).

 

“Converted Revolving Loan” shall have the
meaning set forth in Section 1.01(b).

 

“Credit Documents” shall mean this Agreement,
the Notes, the Security Documents, the Subsidiaries Guaranty, the Agreement to
Amend and Restate, each Joinder Agreement (after the execution and delivery
thereof) and any related documents executed in connection therewith.

 

“Credit Event” shall mean and include the
making of a Loan or the issuance of a Letter of Credit.

 

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

 

“CS” shall mean Credit Suisse, in its
individual capacity.

 

“DBSI” shall mean Deutsche Bank Securities
Inc., in its individual capacity.

 

88

 

“DBTCA” shall mean Deutsche Bank Trust
Company Americas, in its individual capacity.

 

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

 

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

 

“Determination Date” shall mean (i) with
respect to Existing Lenders, the Original Effective Date and (ii) with
respect to any other Lender, the Restatement Effective Date.

 

“Dividends” shall have the meaning provided
in Section 8.08.

 

“Documents” shall mean, collectively, the
Credit Documents, the Acquisition Documents and the Senior Subordinated Note
Documents.

 

“Dollar Equivalent” of an amount denominated
in an Alternate Currency shall mean, at any time for the determination thereof,
the amount of Dollars which could be purchased with the amount of the Alternate
Currency involved in such computation at the spot exchange rate therefor as
quoted by the Administrative Agent as of 11:00 a.m. (New York time)
on the date two Business Days prior to the date of any determination thereof
for purchase on such date, provided that the Dollar Equivalent of any
unpaid drawing under a Letter of Credit expressed in an Alternate Currency
shall be determined at the time the drawing under the related Letter of Credit
was paid or disbursed by the respective Letter of Credit Issuer, provided
further, that for purposes of (x) determining compliance with
Sections 1.01(b), 1.01(c), 2.01(c) and 4.02(A)(a)(i) and (y)
calculating fees pursuant to Sections 3.01(c) and (d), the Dollar
Equivalent of any amounts denominated in an Alternate Currency shall be
revalued on a monthly basis using the spot exchange rates therefor as shown in
The Wall Street Journal (or, if same does not provide such exchange rates,
on such other basis as is reasonably satisfactory to the Administrative Agent)
on the last Business Day of each calendar month.

 

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

 

“Domestic Subsidiary” shall mean each
Subsidiary of the Borrower that is not a Foreign Subsidiary.

 

“Eligible Transferee” shall have the meaning
provided in Section 12.04(g).

 

“End Date” shall have the meaning provided in
the definition of Applicable Margin.

 

“Environmental Claims” means any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigations (other
than internal reports prepared by Holdings or any of its Subsidiaries solely in
the ordinary course of such Person’s business and not in response to any third
party action or request of any kind) or proceedings relating in any way to any
Environmental Law or any permit 

 

89

 

issued, or any approval given, under any such Environmental Law
(hereafter, “Claims”), including, without limitation, (a) any and all
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials arising
from alleged injury or threat of injury to health, safety or the environment.

 

“Environmental Law” means any applicable
Federal, state, foreign or local statute, law, rule, regulation, ordinance,
code and rule of common law now or hereafter in effect and in each case as
amended, and any binding judicial or administrative interpretation thereof,
including any binding judicial or administrative order, consent decree or
judgment, relating to the environment or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, as amended,
33 U.S.C. § 1251 et  seq.; the Toxic Substances Control Act,
15 U.S.C. § 7401 et  seq.; the Clean Air Act, 42 U.S.C. § 7401
et  seq.; the Safe Drinking Water Act, 42 U.S.C. § 3808 et
seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et  seq.;
and any applicable state and local or foreign counterparts or equivalents.

 

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

 

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

 

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

 

“ERISA Affiliate Plan” shall mean (i) any
pension plan as defined in Section 3(2) of ERISA (other than a
Foreign Pension Plan), which is maintained or contributed to by (or which there
is an obligation to contribute of) an ERISA Affiliate (other than Holdings, the
Borrower or any Subsidiary thereof), after giving effect to the Transaction,
and (ii) each such plan for the five year period immediately following the
latest date on which an ERISA Affiliate (other than Holdings, the Borrower or
any Subsidiary thereof), maintained, contributed to or had an obligation to
contribute to such plan and with respect to which Holdings, the Borrower or a
Subsidiary thereof may incur any liability (including any indirect, contingent
or secondary liability).

 

“Eurodollar Loans” shall mean each Loan
bearing interest at the rates provided in Section 1.08(b).

 

90

 

“Eurodollar Rate” shall mean with respect to
each Interest Period for a Eurodollar Loan, (i) the offered quotation to
first-class banks in the interbank Eurodollar market by the Administrative
Agent for dollar deposits of amounts in same day funds comparable to the
principal amount of the applicable Eurodollar Loan of the Administrative Agent,
in its capacity as a Lender (or, if the Administrative Agent is not a Lender
under the respective Facility, the principal amount of the Eurodollar Loan then
being made by the Lender with the largest commitment at such time under the
respective Facility), for which the interest rate is then being determined with
maturities comparable to the Interest Period to be applicable to such
Eurodollar Loans, determined as of 10:00 A.M. (New York time) on the date
which is two Business Days prior to the commencement of such Interest Period
divided (and rounded upward to the next whole multiple of 1/100 of 1%) by (ii) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).

 

“Event of Default” shall have the meaning
provided in Section 9.

 

“Excess Cash Flow” shall mean, for any
period, the remainder of (i) Adjusted Cash Flow for such period, plus
(ii) to the extent not included in (i) above, any amounts received by
Holdings and its Subsidiaries in settlement of, or in payment of any judgments
resulting from, actions, suits or proceedings with respect to Holdings and/or
its Subsidiaries from the first day to the last day of such period, plus
(iii) the amount of the decrease (if any) in Adjusted Consolidated Working
Capital from the first day of the respective period to the last day of the
respective period, minus (iv) the sum of (A) the amount of
Consolidated Capital Expenditures made in compliance with Section 8.05
during such period (less any amount thereof financed through the incurrence of
Indebtedness or equity issuances or contributions), (B) the aggregate
amount of permanent principal payments of Indebtedness for borrowed money of
Holdings and its Subsidiaries and the repayment of the principal component of
Capitalized Lease Obligations of Holdings and its Subsidiaries (excluding
without duplication (1) payments with proceeds of incurrences of
Indebtedness, equity issuances or contributions, asset sales or with casualty
or condemnation proceeds, (2) payments to Holdings or any Subsidiary
thereof, (3) payments of Indebtedness outstanding pursuant to Section 8.04(i) or
(t)), (4) payments of Loans or other Obligations pursuant to Sections
4.02(A)(c) through (f) and (5) any repayment of Revolving Loans
or Swingline Loans which is not accompanied by permanent reduction to the Total
Revolving Commitment in a like amount) during such period, (C) to the
extent not already deducted in determining Excess Cash Flow, purchase price
adjustments paid by Holdings and/or its Subsidiaries during the respective
period in connection with the Acquisition, (D) to the extent not already
deducted in determining Excess Cash Flow, in the case of the period ending March 31,
2006 only, fees and expenses incurred in connection with the Transaction and
the Documents during such period, provided that no more than $17,000,000 shall
be deducted pursuant to this clause (D), (E) the net amount of
investments, loans and advances made pursuant to clauses (c)(i), (q) (other
than in respect of Joint Ventures that are Subsidiaries) and (r) (other than in
Subsidiaries) of Section 8.06 during such period (after giving effect to
any return on any investments, loans or advances made pursuant to said clauses
of Section 8.06), (F) to the extent not already deducted in
determining Excess Cash Flow, cash expenditures made in connection with Permitted
Acquisitions (except to the extent financed with proceeds of Indebtedness or 

 

91

 

equity contributions or issuances), (G) to the extent not already
deducted in determining Adjusted Cash Flow, amounts paid by Holdings and its
Subsidiaries in settlement of, or in payment of any judgments, actions, suits
or proceedings with respect to Holdings and/or its Subsidiaries from the first
date to the last date of such period and (H) any increase in Adjusted Consolidated
Working Capital from the first day of such period to the last day of such
period.

 

“Excess Cash Payment Date” shall mean the
date occurring 90 days after the last day of each fiscal year of Holdings
(beginning with its fiscal year ending on March 31, 2006).

 

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

 

“Existing Credit Agreement” shall have the
meaning provided in the recitals to this Agreement.

 

“Existing Indebtedness” shall have the
meaning provided in Section 5.01(m).

 

“Existing Lender” shall mean each “Lender”
under, and as defined in, the Existing Credit Agreement as of the Restatement
Effective Date.

 

“Existing Letters of Credit” shall have the
meaning provided in Section 2.01(b).

 

“Existing Mortgage” shall mean the mortgages,
debentures or deeds of trust delivered pursuant to the Existing Credit
Agreement.

 

“Existing Mortgage Policies” shall mean the
mortgagee title insurance policies issued in connection with the Existing
Mortgages.

 

“Existing Revolving Commitment” shall mean a “Revolving
Commitment” under, and as defined in, the Existing Credit Agreement.

 

“Existing RF Lender” shall mean a Lender with
outstanding Existing Revolving Loans or an Existing Revolving Commitment.

 

“Existing Revolving Loans” shall mean
the “Revolving Loans” under, and as defined in, the Existing Credit Agreement.

 

“Existing Swingline Loans” shall mean the “Swingline
Loans” under, and as defined in the Existing Credit Agreement.

 

“Existing Term Loans” shall mean the “Term
Loans” under, and as defined in, the Existing Credit Agreement.

 

“Existing Term Loan Conversion” shall have
the meaning provided in Section 1.01(a).

 

“Existing Term Loan Lender” shall mean a
Lender with outstanding Existing Term Loans.

 

92

 

“Expiration Date” shall mean June 15,
2005 but, in the event that the closing of the transactions contemplated by the
Acquisition Agreement has not occurred on or prior to such date because the
condition set forth in Section 6.2 of the Acquisition Agreement has not
been satisfied due to the failure of any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or similar
applicable foreign merger control laws (and any extensions thereof), to have
expired or been terminated on or prior to such date (other than any such
failure resulting from a breach of the covenants in Section 5.5 of the
Acquisition Agreement), then the Expiration Date shall instead be September 15,
2005.

 

“Facility” shall mean any of the credit
facilities established under this Agreement, i.e., the Term Facility or
the Revolving Facility.

 

“Facing Fee” shall have the meaning provided
in Section 3.01(d).

 

“Falk” shall mean The Falk Corporation, a
Delaware corporation.

 

“Falk Business” shall mean all of the
entities (and assets) comprising the Falk business of the Hamilton Sundstrand
Corporation acquired by the Borrower pursuant to the Acquisition Agreement
including, but not limited to, the Falk Corporation, a Delaware corporation.

 

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

 

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

 

“Financial Covenants” shall mean each of the
financial covenants contained in Sections 8.10 and 8.11.

 

“Foreign Asset Sale” shall mean an Asset Sale
by a Foreign Subsidiary of the Borrower.

 

“Foreign Cash Equivalents” shall mean (i) certificates
of deposit or bankers acceptances of, and bank deposits with, any bank
organized under the laws of any country that is a member of the European
Economic Community, whose short-term commercial paper rating from S&P is at
least A-1 or the equivalent thereof or from Moody’s is at least P-1
or the equivalent thereof, in each case with maturities of not more than six
months from the date of acquisition, (ii) commercial paper maturing not
more than one year from the date of creation thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P’s or
Moody’s and (iii) shares of any money market mutual fund that (a) has
its assets invested continuously in the types of investments referred to in
clauses (i) and (ii) above, (b) has net 

 

93

 

assets not less than $500,000,000 and (c) has the highest rating
obtainable from either S&P’s or Moody’s.

 

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

 

“Foreign Subsidiary” shall mean (i) each
Subsidiary of the Borrower which is not incorporated or organized in the United
States or any State or territory thereof and (ii) each subsidiary of the
Borrower which is incorporated or organized in the United States or any State
or territory thereof but whose parent company is not incorporated or organized
in the United States or any State or territory thereof.

 

“Fund” shall have the meaning provided in Section 12.04(g).

 

“GAAP” shall mean generally accepted
accounting principles in the United States of America as in effect on the date
of this Agreement; it being understood and agreed that determinations in
accordance with GAAP for purposes of Section 8, including defined terms as
used therein, are subject (to the extent provided therein) to Section 12.07(a).

 

“GECC” shall mean General Electric Capital
Corporation, in its individual capacity.

 

“German Security” shall mean the assets which
are the subject of that certain Share Pledge Agreement relating to shares in
Rexnord Germany Holdings GmBH dated 16 May 2005 between RBS Acquisition
Corporation, as Pledgor and Deutsche Bank Trust Company Americas, as Collateral
Agent and the Secured Creditors party thereto, which is governed by German law.
Each Lender hereby authorizes (bevollmaechtigt)
and each Other Creditor (as defined in the Security Agreement) by notice in
writing to the Collateral Agent to that effect authorizes, the Collateral Agent
to accept, as its representative (Stellvertreter),
any German Security created in favor of such Lender and such Other Creditor.

 

“Guaranteed Creditors” shall mean and include
each of the Administrative Agent, the Collateral Agent, the Joint Lead
Arrangers, each Letter of Credit Issuer, the Lenders and each party (other than
any Credit Party) party to an Interest Rate Protection Agreement or Other
Hedging Agreement to the extent such party constitutes a Secured Creditor under
the Security Documents.

 

“Guaranteed Obligations” shall mean (i) the
full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of the principal and interest on each Note issued
by, and all Loans made to, the Borrower under this Agreement and all
reimbursement obligations and Unpaid Drawings with respect to Letters of
Credit, together with all the other obligations (including obligations which,
but for the automatic stay under Section 362(a) of

 

94

 

the Bankruptcy Code, would become due), indebtedness and liabilities
(including, without limitation, indemnities, fees and interest (including any
interest accruing after the commencement of any bankruptcy, insolvency,
receivership or similar proceeding at the rate provided for herein, whether or
not such interest is an allowed claim in any such proceeding) thereon) of the
Borrower to the Lenders, each Letter of Credit Issuer, the Administrative Agent
and the Collateral Agent now existing or hereafter incurred under, arising out
of or in connection with this Agreement and each other Credit Document to which
the Borrower is a party and the due performance and compliance by the Borrower
with all the terms, conditions and agreements contained in the Credit Agreement
and in each such other Credit Document and (ii) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due),
liabilities and indebtedness (including any interest accruing after the
commencement of any bankruptcy, insolvency, receivership or similar proceeding
at the rate provided for herein, whether or not such interest is an allowed
claim in any such proceeding) of the Borrower owing under any Interest Rate
Protection Agreement or Other Hedging Agreement (unless it is expressly
provided in the respective Interest Rate Protection Agreement or Other Hedging
Agreement that the liabilities and Indebtedness thereunder are not “Guaranteed
Obligations” for the purposes of the Credit Documents) entered into by the
Borrower with any Lender or any affiliate thereof (even if such Lender
subsequently ceases to be a Lender under this Agreement for any reason) so long
as such Lender or affiliate participates in such Interest Rate Protection
Agreement or Other Hedging Agreement and their subsequent assigns, if any,
whether now in existence or hereafter arising, and the due performance and
compliance with all terms, conditions and agreements contained therein.

 

“Guaranties” shall mean and include each of
the Holdings Guaranty and the Subsidiaries Guaranty.

 

“Guarantor” shall mean Holdings and each
Subsidiary Guarantor.

 

“Hazardous Materials” means (a) any petroleum
or petroleum products, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation, transformers or other
equipment that contains electric fluid containing levels of polychlorinated
biphenyls, and radon gas and (b) any chemicals, materials or substances
defined as or included in the definition of “hazardous substances,” “hazardous
waste,” “hazardous materials,” “extremely hazardous waste,” “restricted
hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,”
or words of similar import, under any applicable Environmental Law.

 

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

 

“Holdings Guaranty” shall mean the guaranty
of Holdings pursuant to Section 13.

 

“Immaterial Subsidiary” shall mean any
Subsidiary of Holdings (other than the Borrower) which individually has
aggregate assets of not greater than $25,000,000 and which, if aggregated with
all other Subsidiaries of Holding with respect to which an event described in 

 

95

 

Section 9.05 or 9.09 has occurred and is continuing, would have
assets of not greater than $25,000,000.

 

“Incremental Term Loan” shall have the
meaning provided in Section 1.01(e).

 

“Incremental Term Loan Borrowing Date” shall
mean each date on which Incremental Term Loans are incurred pursuant to Section 1.01(e).

 

“Incremental Term Loan Commitment” shall
mean, for the respective Incremental Term Loan Lender, the commitment of such
Incremental Term Loan Lender to make Incremental Term Loans pursuant to Section 1.01(e) on
a given Incremental Term Loan Borrowing Date, as such commitment is set forth
in the respective Incremental Term Loan Commitment Agreement.

 

“Incremental Term Loan Commitment Agreement”
shall mean an Incremental Term Loan Commitment Agreement substantially in the
form of Exhibit C (appropriately completed as contemplated by this
Agreement and with such modifications as may be acceptable to the Administrative
Agent and the Borrower).

 

“Incremental Term Loan Lender” shall mean at
any time each Lender with a Incremental Term Loan Commitment or with
outstanding Incremental Term Loans.

 

“Indebtedness” of any Person shall mean,
without duplication, (i) all indebtedness of such Person for borrowed
money, (ii) the deferred purchase price of assets or services (excluding
pension and post-retirement liabilities and other deferred compensation
arrangements for employees generally, in each case entered into in the ordinary
course of business) which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the maximum
amount available to be drawn under all letters of credit, bankers’ acceptances
and similar obligations issued for the account of such Person and all unpaid
drawings or unreimbursed payments in respect of such letters of credit, bankers’
acceptances and similar obligations, (iv) all Indebtedness of the types
described in clause (i), (ii), (iii), (v), (vi), (vii) or (viii) of
this definition secured by any Lien on any property owned by such Person,
whether or not such Indebtedness has been assumed by such Person (provided
that, if the Person has not assumed or otherwise become liable in respect of
such Indebtedness, such Indebtedness shall be deemed to be in an amount equal
to the lesser of the aggregate amount of such Indebtedness and the fair market
value of the property to which such Lien relates as determined in good faith by
such Person), (v) all Capitalized Lease Obligations and Synthetic Lease
Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vii) all net
obligations of such Person under Interest Rate Protection Agreements and Other
Hedging Agreements and (viii) all Contingent Obligations of such Person, provided
that Indebtedness shall not include trade payables, accrued expenses and
receipt of progress and advance payments, in each case arising in the ordinary
course of business.

 

“Industrial Chain Business” shall mean
Holdings’ and its Subsidiaries’ engineered chain, roller chain, leaf chain and
conveying equipment business (including sprockets,

 

96

 

accessories and conveyor components that are complementary to their
chain and conveying equipment products).

 

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

 

“Interest Rate Protection Agreement” shall
mean any interest rate swap agreement, any interest rate cap agreement, any
interest rate collar agreement or other similar agreement or arrangement
designed to protect against fluctuations in interest rates.

 

“Intermediate Holdco” shall mean a
corporation organized under the laws of a State of the United States, and in
accordance with the requirements of Section 7.10, which shall be a direct
Wholly-Owned Subsidiary of Holdings and shall own 100% of the Equity Interests
of the Borrower.

 

“Joinder Agreement” shall have the meaning
provided in Section 7.10.

 

“Joint Lead Arrangers” shall mean each of
DBSI and CS in their capacity as such hereunder.

 

“Joint Venture” shall mean any entity other than
a Wholly-Owned Subsidiary of the Borrower in which the Borrower or one or more
of its Subsidiaries hold Equity Interests representing at least 20% of the
total outstanding Equity Interests of such entity.

 

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

 

“Lender” shall mean each financial
institution listed on Schedule I, as well as any Person that becomes a “Lender”
hereunder pursuant to Section 1.13, 1.14 or 12.04(b).

 

“Lender Default” shall mean (i) the
refusal (which has not been retracted) of a Lender to make available its
portion of any incurrence of any Borrowing (including any Mandatory Borrowing)
or to fund its portion of any unreimbursed payment under Section 2.04(c) or
(ii) a Lender having notified the Administrative Agent and/or the Borrower
that it does not intend to comply with the obligations under Section 1.01
or 2, in the case of either clause (i) or (ii) as a result of the
appointment of a receiver or conservator with respect to such Lender at the
direction or request of any regulatory agency or authority.

 

“Letter of Credit” shall have the meaning
provided in Section 2.01(a) and (b).

 

“Letter of Credit Fee” shall have the meaning
provided in Section 3.01(c).

 

“Letter of Credit Issuer” shall mean (i) DBTCA
(which, for the purposes of this definition, also shall include any banking
affiliate of DBTCA (including Deutsche Bank AG New York Branch) which may agree
to issue Letters of Credit under this Agreement) and (ii) any other Lender
which at the request of the Borrower and with the consent of the Administrative
Agent (not to be unreasonably withheld) agrees in such Lender’s sole discretion
to become a Letter of Credit Issuer for the purpose of issuing Letters of
Credit pursuant to Section 2.  Any 

 

97

 

Letter of Credit Issuer may, in its discretion, arrange for one or more
Letters of Credit to be issued by one or more Affiliates of such Letter of
Credit Issuer who are reasonably satisfactory to the Borrower, and the term “Letter
of Credit Issuer” shall include any such Affiliate with respect to Letters of
Credit issued by it.

 

“Letter of Credit Outstandings” shall mean,
at any time, the sum of, without duplication, (i) the aggregate Stated
Amount of all outstanding Letters of Credit and (ii) the aggregate amount
of all Unpaid Drawings in respect of all Letters of Credit.

 

“Letter of Credit Request” shall have the meaning
provided in Section 2.02(a).

 

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

 

“Loan” shall mean each Term Loan (including
each Converted Term Loan, each New Term Loan and each Incremental Term Loan),
Revolving Loan (including each Converted Revolving Loan) and each Swingline
Loan.

 

“Location” of any Person means such Person’s “location”
as determined pursuant to Section 9-307 of the Uniform Commercial
Code of the State of New York.

 

“Majority Lenders” shall mean those
Non-Defaulting Lenders which would constitute the Required Lenders under, and
as defined in, this Agreement if all outstanding Obligations in respect of the
Revolving Commitments were repaid in full and the Total Revolving Commitment
was terminated.

 

“Management Agreement” shall mean the
management agreement entered into among Carlyle and/or one or more Carlyle
Affiliates and Holdings as in effect in the Restatement Effective Date, and as
same may be amended with the consent of the Joint Lead Arrangers.

 

“Mandatory Borrowing” shall have the meaning
provided in Section 1.01(d).

 

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

 

“Material Adverse Effect” shall mean a
material adverse effect on the business, assets, operations or condition
(financial or otherwise) of Holdings and its Subsidiaries taken as a whole.

 

“Maturity Date” shall mean each of the RF
Maturity Date and the Term Loan Maturity Date.

 

“Maximum Swingline Amount” shall mean the
lesser of $20,000,000 and the amount of the Total Revolving Commitment.

 

98

 

“Minimum Borrowing Amount” shall mean (i) for
Term Loans, Revolving Loans and Swingline Loans maintained as Base Rate Loans,
$250,000 and (ii) for Term Loans and Revolving Loans maintained as
Eurodollar Loans, $1,000,000.

 

“Moody’s” shall have the meaning provided in
the definition of Cash Equivalents.

 

“Mortgage” shall mean a mortgage, leasehold
mortgage, deed of trust, leasehold deed of trust, deed to secure debt,
leasehold deed to secure debt or similar security instrument, each in a form
designated by counsel, and reasonably satisfactory, to the Administrative Agent
and the Borrower.

 

“Mortgage Policy” shall mean a mortgage title
insurance policy or a binding commitment with respect thereto.

 

“Mortgaged Properties” shall mean each of (i) the
Real Properties of the Credit Parties subject to an Existing Mortgage and (ii) the
Real Properties of the Credit Parties listed on Schedule 6.17 and
designated as “Mortgaged Properties” therein.

 

“NAIC” shall mean the National Association of
Insurance Commissioners.

 

“Net Cash Proceeds” shall mean, with respect
to any Asset Sale, the Cash Proceeds resulting therefrom net (without
duplication) of (i) expenses of sale or, in the case of an Asset Sale of
the type described in clause (z) of the definition thereof, of collection, (ii)(A) in
the case of Foreign Asset Sales, all payments of principal, premium and
interest of Indebtedness (other than Indebtedness to the Lenders pursuant to
this Credit Agreement) of any Foreign Subsidiary actually made with the
proceeds of the respective Foreign Asset Sale, provided that the Permitted
Foreign Subsidiary Debt Amount shall be permanently reduced in an amount equal
to the aggregate amount so applied, and (B) in the case of all other Asset
Sales, payments of principal, premium and interest of Indebtedness (other than
Indebtedness to the Lenders pursuant to this Credit Agreement) secured by the
assets the subject of the Asset Sale and required to be, and which is, repaid
under the terms thereof as a result of such Asset Sale) and (iii) the
marginal increased amount of all taxes and other amounts owing to governmental
entities as a result of such Asset Sale.

 

“New Credit Party” shall mean and include any
Credit Party which was not a Credit Party under, and as defined in, the
Existing Credit Agreement on the Original Effective Date.

 

“New Mortgaged Property” shall mean each Real
Property owned by the Borrower and designated as “New Mortgaged Property” on Schedule 6.17.

 

“New Mortgages” shall mean each of the
Mortgages executed and delivered pursuant to Section 5.01(i)(iii).

 

“New Term Loan” shall have the meaning
provided in Section 1.01(a).

 

“New Term Loan Commitment” shall mean, for
each Lender, the amount set forth opposite such Lender’s name in Schedule 1.01
directly below the column entitled “New Term 

 

99

 

Loan Commitment,” as same may be (x) reduced from time to time pursuant
to Sections 3.03, 4.02 and/or 9 and (y) adjusted from time to time as a result
of assignments to or from such Lender pursuant to Section 1.13 or
12.04(b).

 

“Non-Defaulting Lender” shall mean a Lender
that is not a Defaulting Lender.

 

“Non-Wholly Owned Domestic Subsidiary” shall
mean each Domestic Subsidiary of the Borrower that is not a Wholly-Owned
Domestic Subsidiary.

 

“Note” shall mean and include each Term Note,
each Incremental Term Note, each Revolving Note and the Swingline Note.

 

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

 

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

 

“Notice Office” shall mean (i) for
credit notices, the office of the Administrative Agent located at 60 Wall
Street, New York, New York 10206, Attention: 
Diane Rolfe, Telephone No.: (212) 250-6143, and Telecopier No.:
(212) 797-5692, (ii) for operational notices, the office of the
Administrative Agent located at 90 Hudson Street, 1st Floor, Jersey City, New
Jersey 07302, Attention:  Marie Cowell,
Telephone No.: (201) 593-2175, and Telecopier No.: (201) 593-2308,
or (iii) such other office or person as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.

 

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

 

“Original Acquisition” shall mean the
Acquisition, under, and as defined in, the Existing Credit Agreement.

 

“Original Effective Date” shall mean the
Effective Date under, and as defined in, the Existing Credit Agreement.

 

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

 

“Participant” shall have the meaning provided
in Section 2.04(a).

 

“Payment Office” shall mean the office of the
Administrative Agent at 90 Hudson Street, 5th Floor, Jersey City,
New Jersey or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.

 

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

 

100

 

“Permitted Acquisition” shall mean the
acquisition by a Qualified Credit Party or a Foreign Subsidiary of an Acquired
Entity or Business (including by way of merger of such Acquired Entity or
Business with and into such Qualified Credit Party or Foreign Subsidiary (so
long as the Qualified Credit Party or the respective Foreign Subsidiary is the
surviving corporation)), provided that (in each case) (A) the
consideration paid or to be paid by the respective Qualified Credit Party or
Foreign Subsidiary consists solely of cash (including proceeds of Revolving
Loans or Swingline Loans), Cash Equivalents, Foreign Cash Equivalents, the
issuance or incurrence of Indebtedness otherwise permitted by Section 8.04,
the assumption/acquisition of any Indebtedness (calculated at face value) which
is permitted to remain outstanding in accordance with the requirements of Section 8.04,
and the issuance of common stock of Holdings or Qualified Preferred Stock
otherwise permitted by Section 8.13, the Acquired Entity or Business
acquired pursuant to the respective Permitted Acquisition is in a business
permitted by Section 8.01 and (B) all applicable requirements of
Sections 7.12 and 8.02 applicable to Permitted Acquisitions are satisfied.  Notwithstanding anything to the contrary
contained in the immediately preceding sentence, an acquisition which does not
otherwise meet the requirements set forth above in the definition of “Permitted
Acquisition” shall constitute a Permitted Acquisition if, and to the extent,
the Required Lenders agree in writing that such acquisition shall constitute a
Permitted Acquisition for purposes of this Agreement.

 

“Permitted Encumbrance” shall mean, with
respect to any Mortgaged Property, such exceptions to title as are set forth in
the Mortgage Policy delivered with respect thereto, all of which exceptions
must be acceptable to the Administrative Agent in its reasonable discretion.

 

“Permitted Factoring Transaction Outstandings”
at any time shall mean the aggregate amount of cash theretofore paid to Foreign
Subsidiaries of the Borrower in respect of the receivables and related assets
sold or transferred by them pursuant to one or more factoring arrangements, in
each case to the extent the respective receivables have not yet been repaid by
the respective account debtor or repurchased by Foreign Subsidiaries of the
Borrower (it being the intent of the parties that the amount of Permitted
Factoring Transaction Outstandings at any time outstanding approximate as
closely as possible the principal amount of Indebtedness which would be
outstanding pursuant to all factoring arrangements then in effect if same were
structured as a secured lending agreement rather than a purchase agreement).

 

“Permitted Foreign Investment Amount” shall
mean, at the time of any determination thereof, $75,000,000 less (without duplication)
(i) the aggregate fair market value (as determined by the Borrower in good
faith, but in the case of any lease of assets referred to below, including the
fair market value of all of the assets which are the subject of such lease) of
all assets conveyed, sold, leased or otherwise transferred (net of the amount
of any cash consideration received therefor, when and as received) pursuant to Section 8.02(i) after
the Restatement Effective Date and on or prior to the date of such
determination, (ii) the aggregate consideration paid by the Borrower and
its Subsidiaries in connection with Permitted Acquisitions made by one or more
Foreign Subsidiaries of the Borrower or where the respective Acquired Entity or
Business is outside, or is organized outside (or the Person that is the target
Company of the respective Permitted Acquisition owns assets which are located
outside), the United States (or if only a portion the assets of such respective
Acquired Entity or Business is located outside of the United States, the fair
market value of such portion of assets located outside of the United States),
except to the extent such consideration is paid solely from (x) 

 

101

 

internally generated cash of a Foreign Subsidiary, (y) cash proceeds of
Indebtedness incurred by a Foreign Subsidiary or (z) capital contributions,
loans and advances or other investments received from the Borrower or any of
its Domestic Subsidiaries which have reduced the Permitted Foreign Investment
Amount as provided in clause (v) below, (iii) the aggregate amount of
Contingent Obligations then outstanding pursuant to Section 8.04(k)
(taking the maximum amount then supported by the respective Contingent
Obligations) and outstanding at the time of determination, (iv) all
amounts theretofore paid with respect to Contingent Obligations previously
outstanding pursuant to Section 8.04(k) (less any cash payments actually
received in reimbursement thereof from the direct obligor whose obligations
were supported by such Contingent Obligations and (v) the aggregate amount
of capital contributions, loans and advances and other investments made
pursuant to Section 8.06(k) after the Restatement Effective Date and on or
prior to the time of such determination (determined as the amount originally
advanced, loaned or otherwise invested (without giving effect to any
write-downs or write-offs thereof) less the amount of returns on such capital
contributions, loans and advances and other investments, to the extent such
amount does not exceed the original amount of such capital contributions, loans
and advances and other investments).  For
the avoidance of doubt, credit support provided by a Qualified Credit Party to
a Foreign Subsidiary for the repayment of intercompany loans or advances made
by such Qualified Credit Party to such Foreign Subsidiary pursuant to Section 8.06(k)
shall not reduce the Permitted Foreign Investment Amount to the extent that
such intercompany loans and advances have already reduced the Permitted Foreign
Investment Amount.

 

“Permitted Foreign Subsidiary Debt Amount”
shall mean, at the time of any determination thereof, $30,000,000 less (without
duplication) the aggregate amount of all reductions thereto pursuant to clause
(ii)(A) of the definition of Net Cash Proceeds contained herein as a
result of the application of proceeds of Foreign Asset Sales made after the
Restatement Effective Date and on or prior to the time of such determination.

 

“Permitted Honeywell Receivables Transaction
Outstandings” at any time shall mean the aggregate amount of cash theretofore
paid to the Borrower and its Subsidiaries in respect of the receivables  (and related assets) arising from goods and
services provided to Honeywell International, Inc. sold or transferred by
them pursuant to one or more factoring arrangements, in each case to the extent
the respective receivables have not yet been repaid by the respective account
debtor or repurchased by the Borrower or its Subsidiaries (it being the intent
of the parties that the amount of Permitted Honeywell Receivables Transaction
Outstandings at any time outstanding approximate as closely as possible the
principal amount of Indebtedness which would be outstanding pursuant to all
such factoring arrangements then in effect if same were structured as a secured
lending agreement rather than a purchase agreement.

 

“Permitted JV Investment Amount” shall mean,
at the time of any determination thereof, $10,000,000 less (without
duplication) (i) the aggregate amount of all investments deemed made
pursuant to clause (3) of Section 8.02(f), (ii) the aggregate
fair market value (as determined by the Borrower in good faith) of all assets
conveyed, sold or transferred (net of the amount of any cash consideration
received therefor) pursuant to Section 8.02(l) after the Restatement
Effective Date and on or prior to the date of such determination, (iii) the
aggregate amount of Contingent Obligations then outstanding pursuant to Section 8.04(l)
(taking the maximum amount then supported by the respective Contingent
Obligations) and outstanding at 

 

102

 

the time of determination, (iv) all amounts theretofore paid with
respect to Contingent Obligations previously outstanding pursuant to Section 8.04(l)
(less any cash payments actually received in reimbursement thereof from the
direct obligor whose obligations were supported by such Contingent
Obligations), (v) the aggregate consideration paid by the Borrower and its
Subsidiaries in connection with Permitted Acquisitions where the respective
Acquired Entity or Business (or any Person owned by it) would be a Joint
Venture after giving effect to the Permitted Acquisition (or the portion of the
aggregate consideration allocable to any such Joint Venture) and (vi) the
aggregate amount of capital contributions, loans and advances and other
investments made pursuant to Section 8.06(q) (or deemed made pursuant to
clause (3) of the proviso to Section 8.02(f)) after the Restatement
Effective Date and on or prior to the time of such determination (net of the
amount of returns on such capital contributions, loans and advances and other
investments, to the extent such amount does not exceed the original amount of
such capital contributions, loans and advances and other investments).

 

“Permitted Liens” shall mean Liens permitted
under Section 8.03.

 

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

 

“Plan” shall mean (i) any pension plan
as defined in Section 3(2) of ERISA (other than a Foreign Pension
Plan), which is maintained or contributed to by (or to which there is an obligation
to contribute of) Holdings, the Borrower or any of its Subsidiaries or any such
pension plan subject to Title IV or Section 302 of ERISA or Section 412
of the Code which is maintained or contributed to by (or to which there is an
obligation to contribute of) an ERISA Affiliate, after giving effect to the
Transaction, and (ii) each such pension plan for the five year period
immediately following the latest date on which Holdings, the Borrower or any
such Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed
to or had an obligation to contribute to such plan and with respect to which
Holdings, the Borrower or any of its Subsidiaries may incur any liability
(including any indirect, contingent or secondary liability).

 

“Pledge Agreement” shall have the meaning
provided in Section 5.01(g).

 

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

 

“Post-Test Period Pro  Forma
Basis” means the making of calculations on a pro  forma basis
(with calculations of Consolidated EBITDA to be based on the Test Period most
recently ended) in accordance with, and to the extent required by, the
provisions of Section 10.02, taking into account certain events occurring
after the end of the respective Test Period and on or prior to the date of
determination, in accordance with the provisions of Section 10.02 with
respect to determinations to be made on a Post-Test Period Pro  Forma
Basis.

 

“Prime Lending Rate” shall mean the rate
which the Administrative Agent announces from time to time as its prime lending
rate, the Prime Lending Rate to change when and as such prime lending rate
changes.  The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer.  The 

 

103

 

Administrative Agent may make commercial loans or other loans at rates
of interest at, above or below the Prime Lending Rate.

 

“Pro  Forma Basis” means, with
respect to any Test Period, the making of calculations on a pro  forma
basis for certain events (including Significant Acquisitions and Significant
Asset Sales) in accordance with, and to the extent required by, the provisions
of Section 10.02 hereof, but without making adjustments for events which
occurred after the end of the respective Test Period.

 

“Projections” shall mean the projections
contained in the Confidential Information Memorandum, dated April 2005,
which were prepared by or on behalf of the Borrower in connection with this Agreement
and delivered to the Administrative Agent and the Joint Lead Arrangers prior to
the Restatement Effective Date.

 

“Qualified Credit Party” shall mean (i) the
Borrower and (ii) each Wholly-Owned Domestic Subsidiary of the Borrower
that is a Subsidiary Guarantor.

 

“Qualified Preferred Stock” means any
preferred capital stock of Holdings so long as the terms of any such preferred
capital stock (x) do not contain any mandatory put, redemption, repayment,
sinking fund or other similar provision prior to the date occurring one year
following the Term Loan Maturity Date and (y) do not require the cash payment
of dividends or distributions at any time that such cash payment would result
in a Default or an Event of Default hereunder.

 

“Qualified Public Offering” shall mean an
underwritten public offering of the common stock of Holdings which generates
cash proceeds to Holdings of at least $100,000,000.

 

“RCRA” shall mean the Resource Conservation
and Recovery Act, as amended, 42 U.S.C. § 6901 et  seq.

 

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

 

“Refinanced Term Loans” shall have the
meaning provided in Section 12.12(c).

 

“Refinancing Indebtedness” shall mean
Indebtedness of the Borrower or any of its Subsidiaries the proceeds of which
are used to refinance Indebtedness theretofore outstanding pursuant to (and as
permitted by) Section 8.04(f) or (j); provided that (i) the
principal amount of such Refinancing Indebtedness shall not exceed that of the
Indebtedness being refinanced immediately before the respective refinancing is
consummated (plus the amount of any premium or accrued interest actually paid
on the Indebtedness so refinanced), (ii) all net proceeds of Refinancing
Indebtedness are substantially concurrently applied to permanently repay the
Indebtedness being refinanced, (iii) Refinancing Indebtedness shall not
have a final maturity or Weighted Average Life to Maturity shorter than the
remaining final maturity or Weighted Average Life to Maturity of the
Indebtedness so refinanced, (iv) the terms of Refinancing Indebtedness
(including any applicable subordination terms, but excluding interest rates and
other economic terms so long as based on then current market conditions) shall
not be materially less favorable to the Borrower or the respective Subsidiary
or the Lenders than the terms of the 

 

104

 

Indebtedness so refinanced, (v) the obligor on Refinancing
Indebtedness shall be the same as the obligor on the Indebtedness so
refinanced, (vi) any Refinancing Indebtedness in respect of the Senior
Subordinated Notes shall be unsecured and (vii) the Liens, guarantees or
other credit support for Refinancing Indebtedness shall be no more favorable in
any material respect to the obligee of such Indebtedness than such credit
support for the Indebtedness being refinanced.

 

“Register” shall have the meaning provided in
Section 12.04.

 

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

 

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

 

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

 

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

 

“Reinvestment Assets” shall mean any assets
to be employed in the business of the Borrower and its Subsidiaries as
described in Section 8.01.

 

“Reinvestment Election” shall have the
meaning provided in Section 4.02(A)(c).

 

“Reinvestment Notice” shall mean a written
notice signed by an Authorized Officer of the Borrower stating that the
Borrower, in good faith, intends and expects to use all or a specified portion
of the Net Cash Proceeds of an Asset Sale to purchase, construct or otherwise
acquire Reinvestment Assets.

 

“Reinvestment Prepayment Amount” shall mean,
with respect to any Reinvestment Election, the amount, if any, on the
Reinvestment Prepayment Date relating thereto by which (a) the Anticipated
Reinvestment Amount in respect of such Reinvestment Election exceeds (b) the
aggregate amount thereof expended by the Borrower and its Subsidiaries to
acquire Reinvestment Assets.

 

“Reinvestment Prepayment Date” shall mean,
with respect to any Reinvestment Election, the earliest of (i) the date,
if any, upon which the Administrative Agent, on behalf of the Required Lenders,
shall have delivered a written termination notice to the Borrower, provided
that such notice may only be given while an Event of Default under Section 9.01
or 9.05 exists, (ii) the date occurring 365 days after such Reinvestment
Election and (iii) the date on which the Borrower shall have determined
not to proceed with the purchase, construction or other acquisition of
Reinvestment Assets with the related Anticipated Reinvestment Amount.

 

105

 

 

“Release” shall mean actively or passively
disposing, discharging, injecting, spilling, pumping, leaking, leaching,
dumping, emitting, escaping, emptying, pouring, seeping, migrating or the like,
into or upon any land or water or air, or otherwise entering into the
environment.

 

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

 

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

 

“Replacement Term Loans” shall have the
meaning provided in Section 12.12(c).

 

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

 

“Required Lenders” shall mean Non-Defaulting
Lenders the sum of whose outstanding Term Loans and Revolving Commitments (or
after the termination thereof, outstanding Revolving Loans and RF Percentages
of (x) outstanding Swingline Loans and (y) Letter of Credit Outstandings)
exceed 50% of the sum of (i) all outstanding Term Loans of Non-Defaulting
Lenders, and (ii) the Total Revolving Commitment less the Revolving
Commitments of all Defaulting Lenders (or after the termination thereof, the sum
of then total outstanding Revolving Loans of Non-Defaulting Lenders and the
aggregate RF Percentages of all Non-Defaulting Lenders of the total (x)
outstanding Swingline Loans and (y) Letter of Credit Outstandings at such
time).

 

“Restatement Effective Date” shall have the
meaning provided in Section 12.10.

 

“Returns” shall have the meaning provided in Section 6.12.

 

“Revolving Commitment” shall mean, with
respect to each Lender, the amount set forth opposite such Lender’s name in Schedule 1.01
hereto directly below the column entitled “Revolving Commitment,” as the same
may be (x) reduced or terminated from time to time pursuant to Section 3.02,
3.03 and/or 9 or (y) adjusted from time to time as a result of assignments to
or from such Lender pursuant to Section 1.13 and/or 12.04.

 

“Revolving Facility” shall mean the Facility
evidenced by the Revolving Commitments (and outstandings pursuant thereto).

 

“Revolving Loan” shall have the meaning
provided in Section 1.01(b).

 

“Revolving Note” shall have the meaning
provided in Section 1.05(a).

 

“RF Lender” shall mean at any time each
Lender with a Revolving Commitment or with outstanding Revolving Loans.

 

“RF Maturity Date” shall mean May 16,
2011.

 

106

 

“RF Percentage” shall mean at any time for
each RF Lender, the percentage obtained by dividing such Lender’s Revolving
Commitment by the Total Revolving Commitment, provided that if the Total
Revolving Commitment has been terminated, the RF Percentage of each RF Lender
shall be determined by dividing such RF Lender’s Revolving Commitment
immediately prior to such termination by the Total Revolving Commitment
immediately prior to such termination.

 

“S&P” shall have the meaning provided in
the definition of Cash Equivalents.

 

“Sale/Leaseback Transaction” means an
arrangement relating to property owned by a Foreign Subsidiary on the
Restatement Effective Date or thereafter acquired by a Foreign Subsidiary
whereby such Foreign Subsidiary transfers such property to one or more third
Persons and the Foreign Subsidiary leases such property from such Person(s).

 

“Scheduled Repayment” shall have the meaning
provided in Section 4.02(A)(b).

 

“SEC” shall have the meaning provided in Section 7.01(h).

 

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

 

“Secured Creditor” shall mean and include any
Secured Creditor as defined in any Security Document.

 

“Security Agreement” shall have the meaning
provided in Section 5.01(h).

 

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

 

“Security Documents” shall mean the Pledge
Agreement, the Security Agreement, each Mortgage, each Additional Mortgage, if
any, and each pledge and security agreement or similar agreement governed by
local law entered into as contemplated under Section 7.10(c), if any.

 

“Senior Subordinated Note Documents” shall
mean and include each of the documents, instruments (including the Senior
Subordinated Notes) and other agreements entered into by the Borrower
(including, without limitation, the Senior Subordinated Note Indenture and any
documents in respect of any Senior Subordinated Notes issued upon the exchange
offer as contemplated by the Senior Subordinated Note Indenture) relating to the
issuance by the Borrower of the Senior Subordinated Notes, as in effect on the
Original Effective Date and as the same may be entered into, supplemented,
amended or modified from time to time in accordance with the terms hereof and
thereof.

 

“Senior Subordinated Note Indenture” shall
mean an Indenture entered into by and between the Borrower and Wells Fargo
Minnesota National Association, as trustee thereunder, with respect to Senior
Subordinated Notes as in effect on the Original Effective Date and as the same
may be modified, amended or supplemented from time to time in accordance with
the terms hereof and thereof.

 

107

 

“Senior Subordinated Notes” shall mean the
Senior Subordinated Notes due 2012 in an initial aggregate amount of
$225,000,000 and issued by the Borrower under the Senior Subordinated Note
Indenture and all Senior Subordinated Notes issued upon the exchange offer as
contemplated in the Senior Subordinated Note Indenture, as in effect on the Original
Effective Date and as the same may be issued, supplemented, amended or modified
from time to time in accordance with the terms thereof and hereof.

 

“Significant Acquisition” shall mean any
Permitted Acquisition the aggregate consideration (taking the amount of cash
and Cash Equivalents, the aggregate amount expected to be paid on or after the
date of the respective Permitted Acquisition pursuant to any earn-out,
non-compete, consulting or deferred compensation or purchase price adjustment
or similar arrangements, the fair market value (as determined in good faith by
the Borrower) of all other non-cash consideration and the aggregate amount of
assumed Indebtedness) for which exceeds $10,000,000.

 

“Significant Asset Sale” means any Asset Sale
the aggregate consideration (taking the amount of cash and Cash Equivalents,
the aggregate amount expected to be paid on or after the date of the respective
Asset Sale pursuant to any earn-out, non-compete, consulting or deferred
compensation or purchase price adjustment or similar arrangements, the fair
market value (as determined in good faith by the Borrower) of all other
non-cash consideration and the aggregate amount of assumed Indebtedness) for
which exceeds $10,000,000.

 

“Specified Default” shall mean a Default or
Event of Default under any of Sections 9.01, 9.03 (as a result of
non-compliance with any Financial Covenant) or 9.05.

 

“Standby Letter of Credit” shall have the
meaning provided in Section 2.01(a).

 

“Start Date” shall have the meaning provided
in the definition of Applicable Margin.

 

“Stated Amount” of each Letter of Credit
shall mean the maximum available to be drawn thereunder (regardless of whether
any conditions for drawing could then be met and using the Dollar Equivalent
thereof in the case of any Letter of Credit denominated in an Alternate
Currency).

 

“Subsidiaries Guaranty” shall have the
meaning provided in Section 5.01(l).

 

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

 

108

 

“Subsidiary Guarantors” shall mean each
Domestic Subsidiary that (i) is a party to the Subsidiaries Guaranty on
the Restatement Effective Date, (ii) is required pursuant to Section 7.10(a) to
execute (and has executed) a counterpart of the Subsidiaries Guaranty or a
Joinder Agreement or (iii) otherwise becomes a party to the Subsidiaries
Guaranty, in each case only so long as such Domestic Subsidiary continues to be
a party to the Subsidiaries Guaranty.

 

“Swingline Expiry Date” shall mean the date
which is two Business Days prior to the RF Maturity Date.

 

“Swingline Lender” shall mean DBTCA or, in
the event DBTCA ceases to be Swingline Lender, any Lender which at the request
of the Borrower and the consent of the Administrative Agent agrees in such
Lender’s sole discretion to become the Swingline Lender.

 

“Swingline Loan” shall have the meaning
provided in Section 1.01(c).

 

“Swingline Note” shall have the meaning
provided in Section 1.05(a).

 

“Syndication Date” shall mean the date upon
which the Total Commitment (and related outstanding Loans) have been “Successfully
Syndicated” to Lenders under this Agreement as previously agreed to in writing
between Holdings and the Joint Lead Arrangers.

 

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

 

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

 

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

 

“Term Facility” shall mean the Facility
evidenced by (i) the Converted Term Loans, (ii) the New Term Loan
Commitments (or, after the termination of the Total New Term Loan Commitment,
the outstanding New Term Loans) and (iii) after the incurrence thereof,
the Incremental Term Loans.

 

“Term Loan” shall have the meaning provided
in Section 1.01(a).

 

“Term Loan Maturity Date” shall mean December 31,
2011.

 

“Term Note” shall have the meaning provided
in Section 1.05(a).

 

“Test Period” shall mean each period of four
consecutive fiscal quarters of Holdings ended.

 

“Total Commitment” shall mean the sum of the
Total New Term Loan Commitment and the Total Revolving Commitment.

 

109

 

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

 

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

 

“Total Unutilized Revolving Commitment” shall
mean, at any time, (i) the Total Revolving Commitment at such time less (ii) the
sum of the aggregate principal amount of all Revolving Loans and Swingline
Loans at such time plus the Letter of Credit Outstandings at such time.

 

“Trade Letter of Credit” shall have the
meaning provided in Section 2.01(a).

 

“Transaction” shall mean (i) the
consummation of the Acquisition and (ii) the entering into of this
Agreement, the conversion of the Existing Term Loans and the Existing Revolving
Loans and the incurrence of New Term Loans, in each case on the Restatement
Effective Date.

 

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

 

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

 

“Unfunded Current Liability” of any Plan
shall mean the amount, if any, by which the value of the accumulated plan
benefits under the Plan determined on a plan termination basis in accordance
with actuarial assumptions at such time consistent with those prescribed by the
PBGC for purposes of Section 4044 of ERISA, exceeds the fair market value
of all plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions).

 

“Unpaid Drawing” shall have the meaning
provided in Section 2.03(a).

 

“Unutilized Revolving Commitment” for any RF
Lender at any time shall mean the excess of (i) the Revolving Commitment
of such Lender over (ii) the sum of (x) the aggregate outstanding
principal amount of Revolving Loans made by such Lender plus (y) an amount
equal to such Lender’s Adjusted RF Percentage of the Letter of Credit
Outstandings at such time; provided that the Unutilized Revolving
Commitment of the Swingline Lender shall at any time be reduced (but not below
zero) by the aggregate amount of Swingline Loans made by it which are then
outstanding.

 

“U.S.” shall mean the United States of
America.

 

“Wachovia” shall mean Wachovia Bank, National
Association, in its individual capacity.

 

“Weighted Average Life to Maturity” shall
mean, when applied to any Indebtedness at any date, the number of years
obtained by dividing (i) the then outstanding principal 

 

110

 

amount of such Indebtedness into (ii) the product obtained by
multiplying (x) the amount of each then remaining installment or other required
scheduled payments of principal, including payment at final maturity, in
respect thereof, by (y) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment.

 

“Wholly-Owned Domestic Subsidiary” shall mean
each Wholly-Owned Subsidiary that is a Domestic Subsidiary.

 

“Wholly-Owned Subsidiary” of any Person shall
mean any Subsidiary of such Person to the extent all of the Equity Interests in
such Subsidiary, other than directors’ qualifying shares and, in the case of
Foreign Subsidiaries, nominal amounts of shares issued to other Persons in
accordance with applicable law, is owned directly or indirectly by such Person.

 

“Written” or “in writing” shall mean any form
of written communication or a communication by means of telex, facsimile
transmission, telegraph or cable.

 

10.02   Certain
Pro Forma Calculations.  (a) 
For purposes of calculating Consolidated EBITDA for any Test Period on a Pro Forma Basis or a Post-Test Period Pro Forma Basis for purposes of this
Agreement, the following rules shall apply:

 

(i)                                     if at any time
after the Restatement Effective Date and during the respective Test Period
(and, in the case of determinations being made on a Post-Test Period Pro
Forma Basis only, thereafter and on or prior to the date of
determination) the Borrower or any of its Subsidiaries shall have made any
Significant Asset Sale, Consolidated EBITDA for such Test Period shall be
reduced by an amount equal to the Consolidated EBITDA (if positive)
attributable to the assets or Equity Interests which are the subject of such
Significant Asset Sale for such Test Period or increased by an amount equal to
the Consolidated EBITDA (if negative) applicable thereto for such Test Period;

 

(ii)                                  if at any time after
the Restatement Effective Date and during such Test Period (and, in the case of
determinations being made on a Post-Test Period Pro  Forma Basis
only, thereafter and on or prior to the date of determination) the Borrower or
any Subsidiaries shall have made any Significant Acquisition, Consolidated
EBITDA for such Test Period shall be calculated after giving pro forma effect thereto as if such
Significant Acquisition had occurred on the first day of such Test Period;

 

(iii)                               if during such Test
Period (and, in the case of determinations being made on a Post-Test Period Pro
Forma Basis only, thereafter and on or prior to the date of
determination) any Person that became a Subsidiary or was merged with or into
the Borrower or any of its Subsidiaries since the beginning of such Test Period
pursuant to a Significant Acquisition made after the Restatement Effective Date
shall have entered into any disposition or acquisition transaction that would
have required an adjustment pursuant to clause (i) or (ii) above if
made by the Borrower or a Subsidiary of the Borrower during such Test Period,
Consolidated EBITDA for such Test Period shall be calculated after giving pro
forma effect thereto as if such transaction occurred on the first day of
such Test Period; and

 

111

 

(iv)                              pro forma calculations of
Consolidated EBITDA, whether pursuant to this Section 10.02 or otherwise,
shall not give effect to anticipated cost savings and/or increases to Consolidated
EBITDA for the relevant period, except in cases of Significant Acquisitions for
factually supportable and identifiable cost savings and expenses which would
otherwise be accounted for as an adjustment pursuant to Article 11 of
Regulation S-X under the Securities Act of 1933, as amended or which the
Borrower expects to realize during the twelve-month period immediately
following the consummation of such Significant Acquisition (and identifies in
the compliance certificate or other relevant certificate delivered to the Joint
Lead Arrangers pursuant to the terms hereof), as if such cost savings or
expenses were realized on the first day of the respective period.

 

(b)                                 For purposes of
calculating Consolidated Debt for purposes of this Agreement (including as used
in the definition of Leverage Ratio), all determinations thereof shall be made
based on the actual amount of Consolidated Debt outstanding on the date of the
required determination of Consolidated Debt (or of the Leverage Ratio) (in the
case of determinations to be made on a Post-Test Period Pro  Forma
Basis, after giving effect to all incurrences and repayments of Consolidated
Debt in connection with the respective event or occurrence requiring that a
determination be made on a Post-Test Period Pro  Forma Basis).

 

(c)                                  For purposes of
calculating the Consolidated Interest Coverage Ratio for any Test Period on a Pro Forma Basis or a Post-Test Period Pro
Forma Basis for purposes of this Agreement, all determinations of
Consolidated Interest Coverage Ratio for the respective Test Period shall be
made, with such pro forma adjustments as may be determined in accordance with
GAAP and the rules, regulations and guidelines of the SEC (including without
limitation Article 11 of Regulation S-X), after giving effect to all
Significant Acquisitions and Significant Asset Sales effected during the
respective Test Period (and, in the case of determinations being made on a
Post-Test Period Pro  Forma Basis only, thereafter and on or prior
to the date of determination), as well as to all incurrences of Indebtedness
and permanent repayments of Indebtedness (excluding normal fluctuations in
working capital Indebtedness) during the respective Test Period (and, in the
case of determinations being made on a Post-Test Period Pro  Forma
Basis only, thereafter and on or prior to the date of determination) as if same
had occurred on the first day of the respective Test Period.

 

SECTION 11.
  The Agents.

 

11.01   Appointment.  The Lenders hereby designate DBTCA as
Administrative Agent (for purposes of this Section 11, the terms “Administrative
Agent” shall include DBTCA (and its affiliates) in its (or their) capacity as
Administrative Agent hereunder and Collateral Agent as agent for the Secured
Lenders pursuant to the Security Documents) to act as specified herein and in
the other Credit Documents.  The Lenders
hereby designate GECC and Wachovia as Co-Documentation Agents to act as
specified herein and in the other Credit Documents.  The Lenders hereby designate DBSI and CSFB as
Joint Lead Arrangers to act as specified herein and in the other Credit
Documents.  Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, each Agent to take such action
on its behalf under the provisions of this Agreement, the other Credit
Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically 

 

112

 

delegated to or required of each Agent by the terms hereof and thereof
and such other powers as are reasonably incidental thereto.  Each Agent may perform any of their duties
hereunder by or through their respective officers, directors, agents, employees
or affiliates.

 

11.02   Nature
of Duties.  The Agents shall not have
any duties or responsibilities except those expressly set forth in this
Agreement and the Credit Documents.  No
Agent nor any of its respective officers, directors, agents, employees or
affiliates shall be liable for any action taken or omitted by them hereunder or
under any other Credit Document or in connection herewith or therewith, unless
caused by their gross negligence or willful misconduct (as determined by a
court of competent jurisdiction in a final and non-appealable decision).  The duties of the Agents shall be mechanical
and administrative in nature; no Agent shall have by reason of this Agreement
or any other Credit Document a fiduciary relationship in respect of any Lender
or the holder of any Note; and nothing in this Agreement or any other Credit
Document, expressed or implied, is intended to or shall be so construed as to
impose upon any Agent any obligations in respect of this Agreement or any other
Credit Document except as expressly set forth herein or therein.

 

11.03   Lack
of Reliance on the Agents. 
Independently and without reliance upon any Agent, each Lender and the
holder of each Note, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of Holdings and its Subsidiaries in connection with the
making and the continuance of the Loans and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the
creditworthiness of Holdings and its Subsidiaries and, except as expressly
provided in this Agreement, no Agent shall have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter.  No Agent shall be
responsible to any Lender or the holder of any Note for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of Holdings and its Subsidiaries or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other
Credit Document, or the financial condition of Holdings and its Subsidiaries or
the existence or possible existence of any Default or Event of Default.

 

11.04   Certain
Rights of the Agents.  If any Agent
shall request instructions from the Required Lenders with respect to any act or
action (including failure to act) in connection with this Agreement or any
other Credit Document, such Agent shall be entitled to refrain from such act or
taking such action unless and until such Agent shall have received instructions
from the Required Lenders; and such Agent shall not incur liability to any
Person by reason of so refraining. 
Without limiting the foregoing, no Lender nor any holder of any Note
shall have any right of action whatsoever against any Agent as a result of such
Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Lenders.

 

113

 

11.05   Reliance.  Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype, facsimile or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that such Agent reasonably believed to be
the proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and
thereunder, upon advice of counsel selected by such Agent.

 

11.06
  Indemnification.  To
the extent that any Agent is not reimbursed and indemnified by the Borrower,
each Lender will reimburse and indemnify such Agent, in proportion to its “percentage”
as used in determining the Required Lenders (determined as if there were no
Defaulting Lenders) for and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by such Agent in performing its duties hereunder or under
any other Credit Document, in any way relating to or arising out of this
Agreement or any other Credit Document; provided that no Lender shall be
liable to any Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of such Agent (as determined by a court of competent jurisdiction in
a final and non-appealable decision).

 

11.07   The
Agents in Their Individual Capacity. 
With respect to its obligation to make Loans under this Agreement, each
Agent shall have the rights and powers specified herein for a “Lender” and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term “Lenders,” “Required Lenders,” “Majority
Lenders,” “holders of Notes” or any similar terms shall, unless the context
clearly otherwise indicates, include each Agent in its individual
capacity.  Each Agent may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or
other business with any Credit Party or any Affiliate of any Credit Party as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Holdings, or any other Credit Party for services in
connection with this Agreement and otherwise without having to account for the
same to the Lenders.

 

11.08   Holders.  The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof, as
the case may be, shall have been delivered to the Administrative Agent.  Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any subsequent
holder, transferee, assignee or indorsee, as the case may be, of such Note or
of any Note or Notes issued in exchange therefor.

 

11.09   Resignation.  (a)  The Administrative Agent may
resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 30 days’ prior written
notice to the Borrower and the Lenders. 
Any such resignation by an Administrative Agent hereunder shall also
constitute its resignation as a Letter of Credit Issuer, the Swingline Lender
and the Collateral Agent, in which case upon the effectiveness of such
resignation in accordance with this Section 11.09 the resigning 

 

114

 

Administrative Agent (x) shall not be required to issue any
further Letters of Credit, make any additional Swingline Loans hereunder or
discharge any duties of the “Collateral Agent” under the Security Documents and
(y) shall maintain all of its rights as a Letter of Credit Issuer, the
Swingline Lender and the Collateral Agent, as the case may be, with respect to
any Letters of Credit issued by it, Swingline Loans made by it, or actions
taken (or omitted to be taken) by it under the Security Documents, in each case
prior to the effective date of such resignation.  Such resignation shall take effect upon the
appointment of a successor Administrative Agent pursuant to clauses (b) and
(c) below or as otherwise provided below.

 

(b)                                 Upon any such notice
of resignation, the Required Lenders shall appoint a successor Administrative
Agent hereunder or thereunder (who must also agree, unless the resigning
Administrative Agent otherwise consents (or another Person is appointed as
Collateral Agent in a manner consistent with the requirements of this clause (b)),
to act as Collateral Agent) who shall be a commercial bank or trust company
reasonably acceptable to the Borrower (it being understood and agreed that the
Borrower’s acceptance of a successor Administrative Agent pursuant to this
paragraph (b) shall not be unreasonably withheld).

 

(c)                                  If a successor
Administrative Agent shall not have been so appointed within such 30 day
period, the Administrative Agent, with the consent of the Borrower (which
consent shall not be unreasonably withheld or delayed, shall then appoint a
successor Administrative Agent (which successor Administrative Agent shall be
required, unless the resigning Administrative Agent otherwise consents (or
another Person is appointed as Collateral Agent in a manner consistent with the
requirements of this clause (c)), to also act as Collateral Agent) who shall
serve as Administrative Agent hereunder or thereunder until such time, if any,
as the Required Lenders appoint a successor Administrative Agent as provided
above.

 

(d)                                 If no successor Administrative
Agent has been appointed pursuant to clause (b) or (c) above by the
30th day after the date such notice of resignation was given by the
Administrative Agent, the Administrative Agent’s resignation shall become
effective and the Required Lenders shall thereafter perform all the duties of
the Administrative Agent hereunder and/or under any other Credit Document until
such time, if any, as the Required Lenders appoint a successor Administrative
Agent as provided in clause (b) above.

 

(e)                                  Notwithstanding
anything to the contrary contained in this Section 11.09, the
Administrative Agent’s resignation as Collateral Agent as contemplated in
clause (a) above shall not become effective until a successor
Administrative Agent appointed in accordance with the provisions of clause (b) or
(c) above has agreed to act as “Collateral Agent” under the Credit
Documents or another Person has been appointed as Collateral Agent in
accordance with the provisions of clause (b) or (c).

 

(f)                                    Each Joint Lead
Arranger and each Co-Documentation Agent may resign from the performance of all
of its functions and duties hereunder and/or under the other Credit Documents
at any time by giving 5 Business Days’ prior written notice to the
Administrative Agent.  Such resignation
shall take effect on the 5th Business Day after the respective
notice is given to the Administrative Agent.

 

115

 

(g)                                 Upon a resignation of
any Agent pursuant to this Section 11.09, such Agent shall remain
indemnified to the extent provided in this Agreement and the other Credit
Documents and the provisions of this Section 11 shall continue in effect
for the benefit of such Agent for all of its actions and inactions while
serving as an Agent.

 

11.10   Collateral
Matters.  (a)  Each Lender
authorizes and directs the Collateral Agent to enter into the Security
Documents for the benefit of the Lenders and the other Secured Creditors.  Each Lender hereby agrees, and each holder of
any Note or participant in Letters of Credit by the acceptance thereof will be
deemed to agree, that, except as otherwise set forth herein, any action taken
by the Required Lenders in accordance with the provisions of this Agreement or
the Security Documents, and the exercise by the Required Lenders of the powers
set forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the
Lenders.  The Collateral Agent is hereby
authorized by and on behalf of all of the Secured Creditors, without the
necessity of any notice to or further consent from any Secured Creditor, from
time to time prior to an Event of Default, to take any action with respect to
any Collateral or Security Documents which may be necessary to perfect and maintain
perfected the security interest in and liens upon the Collateral granted
pursuant to the Security Documents.

 

(b)                                 The Lenders hereby
authorize the Collateral Agent, at its option and in its discretion, to release
any Lien granted to or held by the Collateral Agent upon any Collateral (i) upon
termination of the Commitments and payment and satisfaction of all of the
Obligations at any time arising under or in respect of this Agreement or the
Credit Documents or the transactions contemplated hereby or thereby (other than
those arising from indemnities for which no claim has been made), (ii) constituting
property being sold or disposed of (to Persons other than Holdings and its
Subsidiaries) upon the sale thereof in compliance with, or as otherwise permitted
in connection with a transaction permitted under, Section 8.02 or (iii) if
approved, authorized or ratified in writing by the Required Lenders (or all
Lenders, if such release is required to be approved by all of the Lenders
hereunder).  Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Collateral Agent’s authority to release particular types or items of Collateral
pursuant to this Section 11.10.

 

(c)                                  Upon any sale and
transfer of Collateral which is expressly permitted pursuant to the terms of
this Agreement, or consented to in writing by the Required Lenders, or all of
the Lenders, as applicable, and upon at least five Business Days’ (or such
shorter period as is reasonably acceptable to the Collateral Agent) prior
written request by the Borrower, the Collateral Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Collateral Agent
for the benefit of the Secured Creditors herein or pursuant hereto upon the
Collateral that was sold or transferred, provided that (i) the
Collateral Agent shall not be required to execute any such document on terms
which, in the Collateral Agent’s reasonable opinion, would expose the
Collateral Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse,
representation or warranty and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations
of Holdings or any of its Subsidiaries in respect of) all interests retained by
Holdings or any of its Subsidiaries, including, without limitation, the
proceeds of the sale, all of which shall continue to constitute part of the
Collateral.  In the event of any
foreclosure or similar enforcement action 

 

116

 

with respect to any of the Collateral, the Collateral Agent shall be
authorized to deduct all of the out-of-pocket costs and expenses reasonably
incurred by the Collateral Agent from the proceeds of any such sale, transfer
or foreclosure.

 

(d)                                 The Collateral Agent
shall have no obligation whatsoever to the Lenders or to any other Person to
assure that the Collateral exists or is owned by any Credit Party or any of its
Subsidiaries or insured or that the Liens granted to the Collateral Agent
herein or pursuant hereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise or to continue exercising at all or in any manner or
under any duty of care, disclosure or fidelity any of the rights, authorities
and powers granted or available to the Collateral Agent in this Section 11.10
or in any of the Security Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto as
between the Lenders and the Collateral Agent, the Collateral Agent may act in
any manner it may deem appropriate, in its reasonable discretion, given the
Collateral Agent’s own interest in the Collateral as one of the Lenders and
that the Collateral Agent shall have no duty or liability whatsoever to the
Lenders, except for its gross negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final and non-appealable decision).

 

11.11   Special
Appointment of Collateral Agent (Germany).

 

(a)                                  Without prejudice to
the generality of Section 11.10

 

(i)                                     each
Lender hereby appoints, on the terms hereof, and each Other Creditor (as
defined in the U.S. Security Agreement) by its acceptance of the benefits of
the German Security and by notice in writing to the Collateral Agent to that
effect appoints, on the terms hereof, the Collateral Agent as trustee (Treuhaender), agent and administrator for
the purpose of holding on trust (Treuhand),
accepting, administering and enforcing the German Security for and on behalf of
the Lenders and the Other Creditors;

 

(ii)                                  the
Collateral Agent accepts its appointment as trustee (Treuhaender), agent and administrator of the German Security
on the terms and subject to the conditions set out in this Agreement;

 

(iii)                               the
Lenders and the Other Creditors agree that, in relation to the German Security,
no Lender and no Other Creditor shall exercise any independent power to enforce
any German Security or take any other action in relation to the enforcement of
the German Security, or make or receive any declarations in relation thereto.

 

(b)                                 The Collateral Agent
shall administer any German Security which is pledged under German law (verpfändet) to any of the Lenders and the
Other Creditors under an accessory security right (akzessorische Sicherheit).

 

(c)                                  Furthermore, each
Lender hereby authorizes and each Other Creditor by notice in writing to the
Collateral Agent to that effect authorizes the Collateral Agent (with the right
of sub-delegation) to enter into any documents evidencing German Security and
to make and accept all declarations and take all actions as it considers
necessary or useful in connection 

 

117

 

with any German Security on behalf of such Lender and such Other
Creditor. The Collateral Agent shall further be entitled to rescind, release,
amend and/or execute new and different documents securing the German Security.
The Collateral Agent is released from the restrictions arising under section 181
of the German Civil Code (Buergerliches
Gesetzbuch) (restrictions on self-dealing).

 

SECTION 12.
  Miscellaneous.

 

12.01   Payment
of Expenses, etc.  The Borrower
agrees to:  (i) pay all reasonable,
documented, out-of-pocket fees and expenses of the Joint Lead Arrangers in
connection with the negotiation, preparation, execution and delivery of the
Credit Documents and the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto (including, without limitation,
the reasonable fees and disbursements of White & Case LLP, counsel to
the Joint Lead Arrangers and other local and foreign counsel (if any)) and of
each Agent and each Lender in connection with the enforcement of the Credit
Documents and the documents and instruments referred to therein (including,
without limitation, the reasonable fees and disbursements of counsel for the
Agents and for each of the Lenders, provided that, except in the case of a
bankruptcy of any Credit Party, no more than one counsel for the Agents and the
Lenders may be used in any one jurisdiction); (ii) pay and hold each of
the Lenders harmless from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters and save each of the
Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iii) indemnify each Lender (including
in its capacity as an Agent or Letter of Credit Issuer), its officers,
directors, employees, representatives agents, advisors and trustees from and
hold each of them harmless against any and all losses, liabilities, claims,
damages or expenses incurred by any of them as a result of, or arising out of,
or in any way related to, or by reason of, (a) any investigation,
litigation or other proceeding (whether or not any Agent or any Lender is a
party thereto and whether or not any such investigation, litigation or other
proceeding is between or among any Agent, any Lender, any Credit Party or any
third Person or otherwise) related to the entering into and/or performance of
any Document or the use of the proceeds of any Loans hereunder or the
Transaction or the consummation of any transactions contemplated in any Credit
Document, (b) the actual or alleged presence of Hazardous Materials in the
air, surface water or groundwater or on the surface or subsurface of any Real
Property owned or at any time operated by the Borrower or any of its
Subsidiaries, the release, generation, storage, transportation, handling or
disposal of Hazardous Materials at any location, whether or not owned or
operated by the Borrower or any of its Subsidiaries, the non-compliance of any
Real Property with foreign, federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any Real
Property, or any Environmental Claim asserted against the Borrower, any of its
Subsidiaries or any Real Property owned or at any time operated by Holdings or
any of its Subsidiaries, including, in each case, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding or (c) any losses,
claims, damages and liabilities of whatsoever nature which may be imposed on,
asserted against or incurred by the Administrative Agent in performing its
duties under Section 12.04(c) (but, in the case of clauses (a), (b) and
(c) above, excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be

 

118

 

indemnified or an affiliate of such Person (as determined by a court of
competent jurisdiction in a final and non-appealable decision)).

 

12.02   Right
of Setoff.  In addition to any rights
now or hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, if an Event of Default then exists, each Lender
is hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to any Credit Party or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special but not trust
accounts) and any other Indebtedness at any time held or owing by such Lender
(including, without limitation, by branches and agencies of such Lender
wherever located) to or for the credit or the account of any Credit Party
against and on account of the Obligations and liabilities of such Credit Party
to such Lender under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations of such Credit
Party purchased by such Lender pursuant to Section 12.06(b), and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such
Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.

 

12.03   Notices.  Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic, telex, telecopier, facsimile or cable
communication) and mailed, telegraphed, telexed, telecopied, faxed, cabled or
delivered, if to a Credit Party, c/o Rexnord Corporation, 4701 West Greenfield
Avenue, Milwaukee, Wisconsin, 53214, attention: Chief Financial Officer,
telephone: (414) 643-3000, telecopier: (414) 643-3078; if to the
Administrative Agent or the Collateral Agent, at its address, facsimile number
or telephone number specified for such Person on credit notices in the
definition of Notice Address hereto; if to any other Lender, to the address,
facsimile number or telephone number specified in the Administrative
Questionnaire; or, at such other address as shall be designated by any party in
a written notice to the other parties hereto. 
All such notices and communications shall be mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, and shall be
effective when received.

 

12.04   Successors
and Assigns.  (a)  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that neither Holdings nor the Borrower may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (it being understood that Holdings may be released from
the Holdings Guaranty and the Security Documents to which it is a party (x) in
connection with the consummation of a Qualified Public Offering so long as the
consent of the Required Lenders thereto is obtained or (y) after the
establishment of Intermediate Holdco, provided that Intermediate Holdco has
taken all action required by Section 7.10) and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to
an Eligible Transferee in accordance with the provisions of subsection (b) of
this Section 12.04, (ii) by way of participation in accordance with
the provisions of subsection (d) of this Section 12.04, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section 12.04 (and any other attempted
assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the 

 

119

 

parties hereto, their respective successors and assigns permitted
hereby, Participants to the extent provided in subsection (d) of this
Section 12.04 and, to the extent expressly contemplated hereby,
beneficiaries of the indemnification provisions set forth herein) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Any Lender may at any
time assign to one or more Eligible Transferees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans (including for purposes of this subsection (b),
participations in Letters of Credit and in Swingline Loans) at the time owing
to it or held by it); provided that (i) except in the case of an
assignment of the entire remaining amount of the assigning Lender’s Commitment
and the Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund (as defined in subsection (g) of
this Section 12.04) with respect to a Lender, the aggregate amount of the
Commitment and/or (without duplication) Loans subject to each such assignment,
determined as of the date the Assignment and Assumption Agreement with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date”
is specified in the Assignment and Assumption Agreement, as of the Trade Date,
shall not be less than (i) in the case of Revolving Commitments (and
related Outstandings), $5,000,000 and (ii) in the case of Term Loans,
$1,000,000, unless each of the Administrative Agent and, so long as no Event of
Default under Section 9.01 or 9.05 has occurred and is continuing, the
Borrower otherwise consent (each such consent not to be unreasonably withheld
or delayed); (ii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Loans or the Commitment assigned,
except that this clause (ii) shall not apply to rights in respect of
Swingline Loans; (iii), except in the case of assignments by the Agents to
their respective Affiliates, any assignment of a Revolving Commitment must be
approved by each of the Administrative Agent, each Letter of Credit Issuer and
the Swingline Lender unless the Person that is the proposed assignee is itself
a RF Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Transferee); and (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption
Agreement, together with, in the case of assignments of Revolving Commitments
and related outstandings (other than any such assignments by CSFB), a
processing and recordation fee of $3,500, and the Eligible Transferee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.  Subject to
acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of
this Section 12.04, from and after the effective date specified in each
Assignment and Assumption Agreement, the Eligible Transferee thereunder shall
be a party to this Agreement and, to the extent of the interest assigned by
such Assignment and Assumption Agreement, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption Agreement, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption Agreement covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
1.10, 1.11, 2.05, 4.04 and 12.01 with respect to facts and circumstances
occurring prior to the effective date of such assignment).  Upon request, the Borrower (at its expense)
shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this subsection shall
be treated for purposes of this Agreement as a sale by such Lender of a 

 

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participation in such rights and obligations in accordance with subsection (d) of
this Section 12.04.

 

(c)                                  The Administrative
Agent, acting solely for this purpose as an agent of the Borrower, shall
maintain at the Notice Office a copy of each Assignment and Assumption
Agreement delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans and Letter of Credit Outstandings owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Collateral Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower at any reasonable time and from time to time upon
reasonable prior notice.

 

(d)                                 Any Lender may at any
time, without the consent of, or notice to, the Borrower or the Administrative
Agent, sell participations to any Person (other than a natural person or
Holding’s Subsidiaries) (each, a “Participant”) in all or a portion of
such Lender’s rights and/or obligations under this Agreement (including all or
a portion of its Commitment and/or the Loans (including such Lender’s
participations in Letters of Credit Outstandings and/or Swingline Loans) owing
to it); provided that (x) such Lender’s obligations under this
Agreement shall remain unchanged, (y) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (z) the Borrower, the Administrative Agent, the Collateral Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement, except to the extent
such amendment, modification or waiver would (i) extend the final
scheduled maturity of any Loan, Note or Letter of Credit (unless such Letter of
Credit is not extended beyond the RF Maturity Date) in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant’s
participation over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment or of a mandatory Prepayment shall not constitute a change in
the terms of such participation, that an increase in any Commitment (or the
available portion thereof) or Loan shall be permitted without the consent of
any Participant if the participant’s participation is not increased as a result
thereof and that any amendment or modification to the financial definitions in
this Agreement or to 12.07(a) shall not constitute a reduction in any rate
of interest or fees for purposes of this clause (i)), (ii) consent to the
assignment or transfer by Holdings or the Borrower of any of its rights and
obligations under this Agreement (it being understood that Holdings may be
released from the Holdings Guaranty and the Security Documents to which it is a
party (x) so long as the consent of the Required Lenders is obtained, in
connection with the consummation of a Qualified Public Offering or (y) after
the establishment of Intermediate Holdco, provided that Intermediate Holdco has
taken all action required by Section 7.10) or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Security 

 

121

 

Documents) supporting the Loans or Letters of Credit in which such
participant is participating.  Subject to
subsection (e) of this Section 12.04, the Borrower agrees that
each participant shall be entitled to the benefits of Sections 1.10, 1.11, 2.05
and 4.04 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section 12.04.  To the extent
permitted by law, each participant also shall be entitled to the benefits of Section 12.02 as though it were a Lender, provided
such participant agrees to be subject to Section 12.06(b) as though
it were a Lender.

 

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

 

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

 

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

 

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

 

“Eligible Transferee” means (a) a
Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any
other Person (other than a (1) natural person and (2) Holdings or any
of its Subsidiaries) approved by (i) the Administrative Agent and (ii) so
long as no Event of Default exists under Section 9.01 or 9.05, the
Borrower (each such approval not to be unreasonably withheld or delayed).

 

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

 

(h)                                 At the time of each
assignment pursuant to Section 12.04(b) to a Person which is not
already a Lender hereunder and which is not a United States Person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall, to the extent legally entitled
to do so, provide to the Borrower and the Administrative Agent the appropriate
Internal Revenue Service Forms (and, if applicable, a Section 4.04 Certificate)
described in Section 4.04(b) to the extent such forms would provide a
complete exemption from or reduction in United States withholding tax.  To the extent that an

 

122

 

assignment of all or any portion of a Lender’s Commitments and related
outstanding Obligations pursuant to Section 1.13 or Section 12.04(b) would,
due to circumstances existing at the time of such assignment, result in
increased costs under Section 1.10, 1.11, 2.05 or 4.04 from those being
charged by the respective assigning Lender prior to such assignment, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower, in accordance with and pursuant to the other provisions of this
Agreement, shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).

 

(i)                                     Notwithstanding
any other provisions of this Section 12.04 to the contrary, no transfer or
assignment of the interests or obligations of any Lender hereunder or any grant
of participation therein shall be permitted if such transfer, assignment or
grant would require the Borrower to file a registration statement with the SEC
or to qualify the Loans under the “Blue Sky” laws of any State.

 

(j)                                     Each Lender
initially party to this Agreement hereby represents, and each Person that
became a Lender pursuant to an assignment permitted by this Section 12.04
will, upon its becoming party to this Agreement, represent that it is an
Eligible Transferee which is in the business of making, purchasing or investing
in extensions of credit of the types made under this Agreement and that it will
make or acquire Loans for its own account, provided that subject to the
preceding clauses (b), (d) and (f) of this Section 12.04, the
disposition of any promissory notes or other evidences of or interests in
Indebtedness held by such Lender shall at all times be within its exclusive
control.

 

12.05   No
Waiver; Remedies Cumulative.  No
failure or delay on the part of any Agent or any Lender in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between any Credit Party and any Agent or any Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. 
The rights and remedies herein expressly provided are cumulative and not
exclusive of any rights or remedies which any Agent or any Lender would
otherwise have.  No notice to or demand
on any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Agent or any Lender to any other or further action
in any circumstances without notice or demand.

 

12.06   Payments
Pro Rata.  (a)  The
Administrative Agent agrees that promptly after its receipt of each payment
from or on behalf of any Credit Party in respect of any Obligations of such
Credit Party hereunder, it shall distribute such payment to the Lenders (other
than any Lender that has expressly waived its right to receive its pro rata
share thereof) pro  rata based upon their respective shares, if
any, of the Obligations with respect to which such payment was received.

 

(b)                                 Each of the Lenders
agrees that, if it should receive any amount hereunder (whether by voluntary
payment, by realization upon security, by the exercise of the right of setoff
or banker’s lien, by counterclaim or cross action, by the enforcement of any
right under the Credit Documents, or otherwise) which is applicable to the
payment of the principal of, or 

 

123

 

interest on, the Loans or Fees, of a sum which with respect to the
related sum or sums received by other Lenders is in a greater proportion than
the total of such Obligation then owed and due to such Lender bears to the
total of such Obligation then owed and due to all of the Lenders immediately
prior to such receipt, then such Lender receiving such excess payment shall
purchase for cash without recourse or warranty from the other Lenders an
interest in the Obligations of the respective Credit Party to such Lenders in
such amount as shall result in a proportional participation by all of the
Lenders in such amount, provided that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.

 

(c)                                  Notwithstanding
anything to the contrary contained herein, the provisions of the preceding
Sections 12.06(a) and (b) shall be subject to the express provisions
of this Agreement which require, or permit, differing payments to be made to
Non-Defaulting Lenders as opposed to Defaulting Lenders and in connection with
repayments of Loans pursuant to Section 4.01(b).

 

12.07   Calculations;
Computations.  (a)  The
financial statements to be furnished to the Lenders pursuant hereto shall be
made and prepared in accordance with GAAP consistently applied throughout the
periods involved (subject, in the case of quarterly financial statements, to
year end adjustments and the absence of footnotes and except as set forth in
the notes thereto, if any, or as otherwise disclosed in writing by the Borrower
to the Lenders), provided that (x) except as otherwise specifically
provided herein, all computations of Excess Cash Flow and all computations
determining compliance with the Financial Covenants, including definitions used
therein, shall utilize accounting principles and policies in effect at the time
of the preparation of, and in conformity with those used to prepare, the
historical financial statements of Holdings and its Subsidiaries referred to in
the first sentence of Section 6.10(b) and (y) if, as a result of any
change after the Restatement Effective Date in GAAP, any change in such
accounting principles and policies used in the preparation of such financial
statements occurs, then, following the request of the Borrower, or the
Administrative Agent or the Required Lenders, the parties hereto shall
negotiate in good faith modifications to the definitions, covenants and other
provisions of this Agreement relating to the financial covenant calculations
required to be made under this Agreement in order to reflect the impact and the
projected impact of such change on the consolidated financial position and
results of operations of Holdings and its Subsidiaries (and if an amendment to
this Agreement is entered into as contemplated above in this clause (y), then
from and after the date thereof the computations pursuant to preceding clause
(x) of this proviso shall be made in conformity with the accounting principles
and policies referenced in preceding clause (x), but adjusted to give effect to
the changes to GAAP made after the Restatement Effective Date and on or prior
to the date of the respective such amendment), provided further, that
until such time as any modifications have become effective as contemplated by
clause (y) of the immediately preceding proviso, if there has been any change
after the Restatement Effective Date (or the date of the last amendment
effected pursuant to clause (y) of the immediately preceding proviso) in GAAP,
then the financial statements furnished to the Lenders pursuant hereto shall be
accompanied by reconciliation worksheets showing the information required to
determine compliance with the provisions referenced in clause (x) of the
immediately preceding proviso.

 

124

 

(b)                                 All computations of
interest, Commitment Commission and other Fees hereunder shall be made on the
basis of a year of 360 days (or 365/366 days in the case of interest on Base
Rate Loans based on the Prime Lending Rate) for the actual number of days.

 

12.08   GOVERNING
LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.  (a)  THIS AGREEMENT AND THE OTHER
CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN THE MORTGAGES OR ANY OTHER
SECURITY DOCUMENT, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.  ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE
LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT, EACH OF HOLDINGS AND THE BORROWER
HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  EACH OF HOLDINGS AND THE BORROWER HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
JURISDICTION OVER HOLDINGS OR THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM,
IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS
LACK PERSONAL JURISDICTION OVER HOLDINGS OR THE BORROWER.  EACH OF HOLDINGS AND THE BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO HOLDINGS OR THE BORROWER AT
ITS ADDRESS SET FORTH IN SECTION 12.03 UNTIL ANOTHER ADDRESS IS PROVIDED
TO THE ADMINISTRATIVE AGENT IN WRITING IN ACCORDANCE WITH SECTION 12.03,
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.  EACH OF HOLDINGS AND THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF
PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE IF IN CONFORMITY WITH THE
FOREGOING.  NOTHING HEREIN SHALL AFFECT
THE RIGHT OF ANY AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST HOLDINGS OR THE BORROWER IN ANY OTHER JURISDICTION.

 

(b)                                 EACH OF HOLDINGS AND
THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) 

 

125

 

ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(c)                                  EACH OF THE PARTIES
TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.

 

12.09   Counterparts.  This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.  A set of counterparts executed by all the
parties hereto shall be lodged with the Borrower and the Administrative Agent.

 

12.10   Effectiveness.  This Agreement shall become effective on the
date (the “Restatement Effective Date”) on which (i) Holdings, the
Borrower, the Required Lenders under the Existing Credit Agreement (determined
immediately prior to giving effect to the Restatement Effective Date), each
Lender converting Existing Term Loans into Converted Term Loans pursuant to the
Term Loan Conversion, each Existing RF Lender converting its Existing Revolving
Loans into Converted Revolving Loans pursuant to Section 1.01(b) and
each Lender with a New Term Loan Commitment shall have signed a copy of the
Agreement to Amend and Restate (whether the same or different copies) and shall
have delivered the same to the Administrative Agent or, in the case of the
Lenders, shall have given to the Administrative Agent telephonic (confirmed in
writing), written telex or facsimile transmission notice (actually received)
that the same has been signed and mailed to it and (ii) the other
conditions contained in Section 5.01 are met to the reasonable
satisfaction of the Administrative Agent. 
Unless the Administrative Agent has received actual notice from any
Lender that the conditions contained in Section 5.01 have not been met to
its satisfaction, upon the satisfaction of the condition described in clause (i) of
the immediately preceding sentence and upon the Administrative Agent’s good
faith determination that the conditions described in clause (ii) of the
immediately preceding sentence have been met, then the Restatement Effective
Date shall be deemed to have occurred, regardless of any subsequent
determination that one or more of the conditions thereto had not been met
(although the occurrence of the Restatement Effective Date shall not release
any Credit Party from any liability for failure to satisfy one or more of the
applicable conditions contained in Section 5.01.

 

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

 

12.12   Amendment
or Waiver, etc.  (a)  Neither
this Agreement nor any other Credit Document nor any terms hereof or thereof
may be changed, waived, discharged or terminated unless such change, waiver,
discharge or termination is in writing signed by the respective Credit Parties
party hereto or thereto and the Required Lenders (although additional parties
may 

 

126

 

be added to (and annexes may be modified to reflect such additions),
and Subsidiaries of the Borrower may be released from, the Subsidiaries
Guaranty and the Security Documents (in connection with permitted sales or
dispositions of Equity Interests in the respective Subsidiary Guarantor or
Subsidiary Guarantors being released) in accordance with the provisions hereof
and thereof without the consent of the other Credit Parties party thereto or
the Required Lenders), provided that no such change, waiver, discharge
or termination shall, without the written consent of each Lender (other than a
Defaulting Lender) (with Obligations being directly adversely affected in the
case of following clause (i)), (i) extend, waive or postpone the final
scheduled maturity of any Loan or Note or extend, waive or postpone the stated
expiration date of any Letter of Credit beyond the RF Maturity Date, or reduce
the rate or extend, waive or postpone the time of payment of interest or Fees
thereon (except in connection with the waiver of applicability of any
post-default increase in interest rates), or reduce the principal amount
thereof (it being understood that any amendment or modification to the
financial definitions in this Agreement or to Section 12.07(a) shall
not constitute a reduction in the rate of interest or Fees for the purposes of
this clause (i)), (ii) release all or substantially all of the Collateral
under the Security Documents (except as expressly provided in the Credit
Documents (x) in connection with the termination of commitments hereunder and
repayment in full of all amounts owing pursuant hereto and (y) with respect to
permitted sales or dispositions of property), or release all or substantially
all of the Guarantors from the Guaranties (except (x) in connection with the
termination of commitments hereunder and repayment in full of all amounts owing
pursuant hereto and (y) in the case of Subsidiary Guarantors as expressly
provided in the Subsidiaries Guaranty in connection with permitted sales or
dispositions of Equity Interests in the respective Subsidiary Guarantor or
Subsidiary Guarantors being released), (iii) amend, modify or waive any
provision of this Section 12.12 (except for technical amendments with
respect to additional extensions of credit pursuant to this Agreement which
afford the protections to such additional extensions of credit of the type
provided to the Term Loans and the Revolving Commitments on the Restatement
Effective Date), (iv) reduce the percentage specified in the definition of
Required Lenders (it being understood that, with the consent of the Required
Lenders, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Lenders on substantially the same
basis as the extensions of Term Loans and Revolving Commitments are included on
the Restatement Effective Date), (v) consent to the assignment or transfer
by Holdings or the Borrower of any of its rights and obligations under this
Agreement (it being understood that Holdings may be released from the Holdings
Guaranty and the Security Documents to which it is a party (x) so long as the
consent of the Required Lenders is obtained, in connection with the
consummation of a Qualified Public Offering or (y) after the establishment of
Intermediate Holdco, provided that Intermediate Holdco has taken all action
required by Section 7.10) or (vi) amend, modify or waive any
provisions of Section 12.06(a) providing for payments to be made
ratably by the Lenders (it being understood that, with the consent of the
Required Lenders, additional extensions of credit pursuant to this Agreement
may be included in determining any ratable share pursuant to Section 12.06(a) and
adjustments to any such Section may be made consistent therewith); provided
further, that no such change, waiver, discharge or termination shall (1) increase
the Commitment of any Lender over the amount thereof then in effect without the
consent of such Lender (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a
mandatory reduction in the Total Commitment shall not constitute an increase of
the Commitment of any Lender, and that an increase in the available portion of
any Commitment of

 

127

 

any Lender shall not constitute an increase of the Commitment of such
Lender), (2) without the consent of each Letter of Credit Issuer, amend,
modify or waive any provision of Section 2 or alter its rights or
obligations with respect to Letters of Credit, (3) without the consent of
the Swingline Lender, alter the Swingline Lender’s rights or obligations with
respect to Swingline Loans, (4) without the consent of the respective
Agent, amend, modify or waive any provision of Section 12 or any other
provision as same relates to the rights or obligations of such Agent, (5) without
the consent of Collateral Agent, amend, modify or waive any provision relating
to the rights or obligations of the Collateral Agent, or (6) reduce the
amount of, or extend the date of, any Scheduled Repayment without the consent
of the Majority Lenders holding Term Loans, or amend the definition of Majority
Lenders without the consent of the Majority Lenders holding Term Loans (it
being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Majority Lenders on substantially the same basis as the
extensions of Term Loans and Revolving Commitments are included on the
Restatement Effective Date).  Notwithstanding
anything to the contrary contained above, the provisions of Section 12.17
hereof may be modified (and may only be modified) in accordance with the
express requirements of Section 12.17(b) as originally in effect on
the Restatement Effective Date.

 

(b)                                 If, in connection with
any proposed change, waiver, discharge or termination of any of the provisions
of this Agreement as contemplated by clauses (i) through (v), inclusive,
of the first proviso to Section 12.12(a), the consent of the Required
Lenders is obtained but the consent of one or more of such other Lenders whose
consent is required is not obtained, then the Borrower shall have the right, so
long as all non-consenting Lenders whose individual consent is required are
treated as described in either clauses (A) or (B) below, to either (A) replace
each such non-consenting Lender or Lenders with one or more Replacement Lenders
pursuant to Section 1.13 so long as at the time of such replacement, each
such Replacement Lender consents to the proposed change, waiver, discharge or
termination or (B) terminate such non-consenting Lender’s Commitments
and/or repay each Facility of outstanding Loans of such Lender in accordance
with Sections 3.02(b) and/or 4.01(b), provided that, unless the
Commitments that are terminated, and Loans repaid, pursuant to preceding clause
(B) are immediately replaced in full at such time through the addition of
new Lenders or the increase of the Commitments and/or outstanding Loans of
Existing Lenders (who in each case must specifically consent thereto), then in
the case of any action pursuant to preceding clause (B) the Required
Lenders (determined after giving effect to the proposed action) shall
specifically consent thereto, provided further, that in any event the Borrower
shall not have the right to replace a Lender, terminate its Commitments or
repay its Loans solely as a result of the exercise of such Lender’s rights (and
the withholding of any required consent by such Lender) pursuant to the second
proviso to Section 12.12(a).

 

(c)                                  In addition,
notwithstanding the foregoing, this Agreement may be amended with the written
consent of the Administrative Agent, Holdings, the Borrower and the Lenders
providing the relevant Replacement Term Loans (as defined below) to permit the
refinancing of all outstanding Term Loans (“Refinanced Term Loans”) with a
replacement “B” term loan tranche hereunder which shall be Loans hereunder (“Replacement
Term Loans”); provided that (a) the aggregate principal amount of
such Replacement Term Loans shall not exceed the aggregate principal amount of
such Refinanced Term Loans, (b) the Applicable Margin for such Replacement
Term Loans shall not be higher than the Applicable Margin for such Refinanced
Term Loans, (c) the Weighted Average Life to Maturity of such Replacement

 

128

 

Term Loans shall not be shorter than the Weighted Average Life to
Maturity of such Refinanced Term Loans at the time of such refinancing and (d) all
other terms applicable to such Replacement Term Loans shall be substantially
identical to, or less favorable, taken as a whole, to the Lenders providing
such Replacement Term Loans than, those applicable to such Refinanced Term
Loans, except to the extent necessary to provide for covenants and other terms
applicable to any period after the Term Loan Maturity Date.

 

12.13
  Survival.  All
indemnities set forth herein including, without limitation, in Section 1.10,
1.11, 2.05, 4.04, 11.06 or 12.01 shall survive the execution and delivery of
this Agreement and the making and repayment of the Loans.

 

12.14   Domicile
of Loans.  Each Lender may transfer
and carry its Loans at, to or for the account of any branch office, subsidiary
or affiliate of such Lender, provided that the Borrower shall not be
responsible for costs arising under Section 1.10, 2.05 or 4.04 resulting
from any such transfer (other than a transfer pursuant to Section 1.12) to
the extent not otherwise applicable to such Lender prior to such transfer
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the
respective transfer).

 

12.15   Confidentiality.  Each of the Lenders agrees that it will use
its commercially reasonable efforts not to disclose without the prior consent
of the Borrower (other than to its employees, auditors, counsel or other
professional advisors, to affiliates or to another Lender if the Lender or such
Lender’s holding or parent company in its reasonable discretion determines that
any such party should have access to such information) any information with
respect to Holdings or any of its Subsidiaries which is furnished pursuant to
this Agreement; provided, that any Lender may disclose any such
information (a) as has become generally available to the public, other
than through a violation of this Section 12.15 by any Lender or Agent, (b) as
may be required in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors or to the NAIC, (c) as may be
required in response to any summons or subpoena or in connection with any
litigation (notice of which will be promptly sent to the Borrower to the extent
permitted by law), (d) in order to comply with any law, order, regulation
or ruling applicable to such Lender, (e) to any prospective transferee in
connection with any contemplated transfer of any of the Notes or any interest
therein by such Lender; provided, that such prospective transferee is
notified of the confidentiality requirements relating thereto and does not
affirmatively state its intent not to comply therewith and (f) to any
direct or indirect contractual counterparty in swap agreements or such
contractual counterparty’s professional advisors; provided, that such
contractual counterparty or such contractual counterparty’s professional
advisors, as the case may be, is notified of the confidentiality requirements
relating thereto and does not affirmatively state its intent not to comply
therewith.  No Lender shall be obligated
or required to return any materials furnished by Holdings or any Subsidiary.  Holdings and the Borrower hereby agree that
the failure of a Lender to comply with the provisions of this Section 12.15
shall not relieve the Credit Parties of any of their obligations to such Lender
under this Agreement and the other Credit Documents.

 

129

 

12.16   Acquisition
of Mecanica Falk S.A. de C.V. and Falk Shanghai Co., Ltd.  Notwithstanding anything to the contrary
contained in the Credit Agreement, it is understood and agreed that the
acquisition of Mecanica Falk S.A. de C.V. and Falk Shanghai Co., Ltd. pursuant
to the Acquisition shall not be required to be consummated on the Restatement
Effective Date, and if either such acquisition is not consummated on such date
such acquisition may later be consummated in accordance with the Acquisition
Agreement so long as no further consideration is paid therefor.

 

12.17   Limitation
on Certain Enforcement Actions.  (a)  The
Agents and the Lenders hereby acknowledge and agree that, notwithstanding
anything to the contrary contained herein or in any other Credit Document, none
of the following actions shall be taken without the prior written consent of
each Agent (if any) who would have a voting percentage of at least 5% in
determining the Required Lenders at such time: (A) the purchase or other
acquisition of any direct ownership interest by any Agent (in such capacity or
on behalf of any or all of the Secured Creditors) or any Lender or Lenders
(except as a result of any purchase by one or more Lenders in their individual
capacities pursuant to a foreclosure sale) of any Equity Interests of any of
Rexnord North America Holding, Inc. or Clarkson Industries, Inc.; (B) the
exercise of any voting rights by any Agent (in such capacity or behalf of any
or all of the Secured Creditors) or any Lender or Lenders (except following any
purchase by one or more Lenders in their individual capacities pursuant to a
foreclosure sale) with respect to the Equity Interests of any of Rexnord North
America Holdings, Inc. or Clarkson Industries, Inc.; or (C) the
purchase or other acquisition of any direct ownership interest by any Agent (in
such capacity or on behalf of the Secured Creditors) or any Lender or Lenders
(except as a result of any purchase by one or more Lenders in their individual
capacities pursuant to a foreclosure sale) in any of the real property listed
as items 1, 2, 4, 11 and 13 on Schedule 6.17, whether through purchase
upon foreclosure of any lien granted to the Administrative Agent for the
benefit of the Secured Parties under the Security Agreement or any Mortgage or
otherwise.

 

(b)                                 It is acknowledged and
agreed by all parties hereto that provisions of this Section 12.17 are
solely for the benefit of the Agents and Lenders (and not the Borrower or any
other Credit Party), and, that notwithstanding anything to the contrary
contained herein, the provisions hereof may be modified, waived or amended only
with the consent of the Required Lenders and each Agent (if any) who would have
a voting percentage of at least 5% in determining Required Lenders at such
time, with no consent of any Credit Party being required in connection with any
modification, amendment or waiver of the provisions of this Section 12.17
effected in accordance with the preceding portion of this sentence.

 

12.18
  USA Patriot Act.  Each
Lender hereby notifies the Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it may be required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender
to identify the Borrower in accordance with the Act, and the Borrower agrees to
provide such information from time to time to any Lender.

 

12.19   Conversion
of Currencies.  (a)  If,
for the purpose of obtaining judgment in any court, it is necessary to convert
a sum owing hereunder in one currency into another currency, each party hereto
agrees, to the fullest extent that it may effectively do so, that the rate 

 

130

 

of exchange used shall be that at which in accordance with normal
banking procedures in the relevant jurisdiction the first currency could be
purchased with such other currency on the Business Day immediately preceding
the day on which final judgment is given.

 

(b)                                 The obligations of the
Borrower in respect of any sum due to any party hereto or any holder of the
obligations owing hereunder (the “Applicable Creditor”) shall, notwithstanding
any judgment in a currency (the “Judgment Currency”) other than the currency in
which such sum is stated to be due hereunder (the “Agreement Currency”), be
discharged only to the extent that, on the Business Day following receipt by
the Applicable Creditor of any sum adjudged to be so due in the Judgment
Currency, the Applicable Creditor may in accordance with normal banking
procedures in the relevant jurisdiction purchase the Agreement Currency with
the Judgment Currency.  If the amount of
the Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, the Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. 
The obligations of the Borrower contained in this Section 12.19
shall survive the termination of this Agreement and the payment of all other
amounts owing hereunder.

 

SECTION 13.
  Holdings Guaranty.

 

13.01
  The Guaranty.  In
order to induce the Lenders to enter into this Agreement and to extend credit
hereunder and in recognition of the direct benefits to be received by Holdings
from the proceeds of the Loans and the issuance of the Letters of Credit,
Holdings hereby unconditionally and irrevocably guarantees, as primary obligor
and not merely as surety the full and prompt payment when due, whether upon
maturity, acceleration or otherwise, of any and all of the Guaranteed
Obligations.  If any of the Guaranteed Obligations
becomes due and payable hereunder, Holdings unconditionally promises to pay
such indebtedness to the Guaranteed Creditors, on demand, together with any and
all expenses which may be actually incurred by the Guaranteed Creditors in
collecting any of the Guaranteed Obligations. 
If claim is ever made upon any Guaranteed Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part
of said amount by reason of (i) any judgment, decree or order of any court
or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected
by such payee with any such claimant (including the Borrower), then and in such
event Holdings agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon Holdings, notwithstanding any revocation of
this Guaranty or any other instrument evidencing any liability of the Borrower,
and Holdings shall be and remain liable to the aforesaid payees hereunder for
the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.

 

13.02   Bankruptcy.  Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
to the Guaranteed Creditors whether or not due or payable by the Borrower upon
the occurrence in respect of the Borrower of any of the events specified in Section 9.05,
and unconditionally promises to pay such indebtedness on demand, in Dollars.

 

131

 

13.03   Nature
of Liability.  The liability of
Holdings hereunder is exclusive and independent of any security for or other
guaranty of the Guaranteed Obligations whether executed by Holdings, any other
guarantor or by any other party, and the liability of Holdings hereunder is not
affected or impaired by (a) any direction as to application of payment by
the Borrower or by any other party, or (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the Guaranteed Obligations, or (c) any payment on or in reduction of
any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by the Borrower, or (e) any
payment made to the Guaranteed Creditors on the Guaranteed Obligations which
any such Guaranteed Creditor repays to the Borrower pursuant to court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and Holdings waives any right to the deferral or modification of
its obligations hereunder by reason of any such proceeding.

 

13.04   Independent
Obligation.  The obligations of
Holdings hereunder are independent of the obligations of any other guarantor,
any other party or the Borrower, and a separate action or actions may be
brought and prosecuted against Holdings whether or not action is brought
against any other guarantor, any other party or the Borrower and whether or not
any other guarantor, any other party or the Borrower be joined in any such
action or actions.  Holdings waives, to
the full extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement hereof.  Any payment by the Borrower or other
circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to Holdings.

 

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

 

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

 

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

 

(c)                                  exercise or refrain
from exercising any rights against the Borrower or others or otherwise act or
refrain from acting;

 

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

 

132

 

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

 

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

 

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

 

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

 

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

 

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

 

13.08   Waiver.  (a)  Holdings waives any right (except
as shall be required by applicable statute and cannot be waived) to require any
Guaranteed Creditor to (i) proceed against the Borrower, any other
guarantor or any other party, (ii) proceed against or exhaust any security
held from the Borrower, any other guarantor or any other party or (iii) pursue
any other remedy in any Guaranteed Creditor’s power whatsoever.  Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out the disability of the Borrower, any other guarantor or any other
party, or the unenforceability of the Guaranteed Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of 

 

133

 

the Borrower other than payment in full of the Guaranteed
Obligations.  The Guaranteed Creditors
may, at their election, foreclose on any security held by the Collateral Agent
or any other Guaranteed Creditor by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable (to the
extent such sale is permitted by applicable law), or exercise any other right
or remedy the Guaranteed Creditors may have against the Borrower or any other
party, or any security, without affecting or impairing in any way the liability
of Holdings hereunder except to the extent the Guaranteed Obligations have been
paid.

 

(b)                                 Holdings waives all
presentments, demands for performance, protests and notices, including, without
limitation, notices of nonperformance, notices of protest, notices of dishonor,
notices of acceptance of this Guaranty, and notices of the existence, creation
or incurring of new or additional Guaranteed Obligations.  Holdings assumes all responsibility for being
and keeping itself informed of the Borrower’s financial condition and assets,
and of all other circumstances, bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks which
Holdings assumes and incurs hereunder, and agrees that the Guaranteed Creditors
shall have no duty to advise Holdings of information known to them regarding
such circumstances or risks.

 

13.09   Enforcement.  The Guaranteed Creditors agree that this
Guaranty may be enforced only by the action of the Administrative Agent or the
Collateral Agent, in each case acting upon the instructions of the Required
Lenders and no Guaranteed Creditor shall have any right individually to seek to
enforce or to enforce this Guaranty or to realize upon the security to be
granted by the Security Documents, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent or the
Collateral Agent for the benefit of the Guaranteed Creditors upon the terms of
this Guaranty and the Security Documents.

 

*     *     *

 

134Exhibit 10.20

 

STOCK
PURCHASE PLAN

OF 

RBS GLOBAL, INC.

 

RBS Global, Inc., a
Delaware corporation (the “Company”), hereby adopts this Stock Purchase Plan of
RBS Global, Inc.  The purposes of this
Plan are as follows:

 

(1)                                  To
further the growth, development and financial success of the Company and its
Subsidiaries (as defined herein), by providing additional incentives to
employees, consultants and directors of the Company and its Subsidiaries who
have been or will be given responsibility for the management or administration
of the Company’s (or one of its Subsidiaries’) business affairs, by assisting
them to become owners of Common Stock, thereby benefiting directly from the
growth, development and financial success of the Company and its Subsidiaries.

 

(2)                                  To
enable the Company (and its Subsidiaries) to obtain and retain the services of
the type of professional, technical and managerial employees, consultants and
directors considered essential to the long-range success of the Company (and
its Subsidiaries) by providing them an opportunity to purchase Common Stock
from the Company.

 

ARTICLE I.

DEFINITIONS

 

Whenever the following
terms are used in this Plan, they shall have the meaning specified below unless
the context clearly indicates to the contrary. 
The singular pronoun shall include the plural where the context so
indicates.

 

Section  1.1                                      Board

 

“Board” shall mean the
Board of Directors of the Company.

 

Section
1.2                                      Committee

 

“Committee” shall mean
the Compensation Committee of the Board.

 

Section
1.3                                      Common
Stock

 

“Common Stock” shall mean
the common stock, par value $0.01 per share, of the Company.

 

Section  1.4                                      Company

 

“Company” shall mean RBS
Global, Inc., a Delaware corporation.

 

Section  1.5                                      Consultant

 

“Consultant” shall mean
any Person who is a consultant or adviser if: 
(i) the consultant or adviser renders bona fide services to the Company
or one of its Subsidiaries; and (ii) the consultant or adviser is a natural
person who has contracted directly with the Company to render such services.

 

1

 

Section  1.6                                      Employee

 

“Employee” shall mean any
employee (as defined in accordance with the regulations and revenue rulings
then applicable under Section 3401(c) of the Internal Revenue Code of
1986, as amended from time to time) of the Company or one of its Subsidiaries,
whether such employee is so employed at the time this Plan is adopted or
becomes so employed subsequent to the adoption of this Plan.

 

Section
1.7                                      Exchange Act

 

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

 

Section
1.8                                      Independent
Director

 

“Independent Director”
shall mean a member of the Board who is not an Employee of the Company or any
of its Subsidiaries.

 

Section  1.9                                      Participant

 

“Participant” shall mean
any Employee, Consultant or Independent Director who is awarded an opportunity
to purchase Common Stock under the Plan.

 

Section  1.10                                Plan

 

“Plan” shall mean this
Stock Purchase Plan of RBS Global, Inc.

 

Section
1.11                                Securities
Act

 

“Securities Act” shall
mean the United States Securities Act of 1933, as amended.

 

Section
1.12                                Stockholders
Agreement

 

“Stockholders Agreement”
shall mean that certain agreement by and between each Participant, the Company
and other parties thereto, which contains certain restrictions and limitations
applicable to the shares of Common Stock acquired by a Participant.  The Board, in its discretion, shall determine
the terms of the Stockholders Agreement and may amend the terms thereof from
time to time.

 

Section  1.13                                Subsidiary

 

“Subsidiary” of the
Company shall mean any other corporation, limited liability company or other
entity more than 50% of the voting securities of which are owned by the Company
and/or one or more of its Subsidiaries.

 

ARTICLE II.

SHARES SUBJECT TO PLAN

 

Section
2.1                                      Shares
Subject to Plan

 

The aggregate number of
shares of Common Stock which may be awarded under this Plan is 6,269.

 

2

 

ARTICLE III.

SALE OF STOCK

 

Section  3.1                                      Eligibility

 

Any Employee, any
Independent Director and any Consultant of the Company or one of its
Subsidiaries shall be eligible to be granted the opportunity to purchase shares
of Common Stock.

 

Section
3.2                                      Sale
of Common Stock

 

The Committee, acting in
its sole discretion, may from time to time designate one or more Employees,
Independent Directors or Consultants to whom an offer to sell shares of Common
Stock shall be made and shall determine the number of shares of Common Stock to
be sold and the terms and conditions of such sale, consistent with the
Plan.  Each share of Common Stock sold to
an Employee, Independent Director or Consultant under this Section 3.2
shall be evidenced by a written stock purchase agreement in a form approved by
the Committee (the “Stock Purchase Agreement”). 
Any Common Stock acquired pursuant to this Section 3.2 shall also
be subject to the terms and conditions of a Stockholders Agreement.  The Committee’s authorization of the sale of
shares hereunder to a Participant shall not constitute an offer to sell such
shares, and the Committee reserves the right in its sole discretion to revoke
its authorization for any or all Participants to purchase any Common Stock
pursuant to the Plan at any time and for any reason prior to the issuance of
such shares by the Company.

 

ARTICLE IV.

TERMS OF STOCK PURCHASE 

 

Section
4.1                                      Purchase
Price of Common Stock

 

In the event the
Committee determines to sell Common Stock pursuant to the Plan, the Committee
shall have the authority to specify the purchase price per share of Common
Stock, which the Committee shall establish in its sole discretion at the time
such shares are purchased.

 

Section
4.2                                      Manner
of Purchase of Common Stock

 

In the event a
Participant purchases shares of Common Stock pursuant to this Plan, such shares
shall only be issued following the occurrence of the following:

 

(a)                                  Execution by the Participant of the Stock Purchase Agreement;

 

(b)                                 Execution by the Participant of the Stockholders Agreement;
and

 

(c)                                  Full payment (at the discretion of the Company, in cash, by
personal, certified, or bank cashier check or wire transfer) by the Participant
for the shares of Common Stock being acquired by the Participant.

 

The Committee may,
but shall not be required to, authorize the Company to loan to any Participant
all or a portion of the purchase price for the Common Stock being acquired by
such Participant.  The Committee shall
specify the terms and conditions of any such loan in its sole

 

3

 

discretion,
including the maturity date and the interest rate.  Any such loan shall be secured by a pledge of
the shares of Common Stock purchased by such Participant.

 

Section
4.3                                      Conditions
to Issuance of Stock Certificates

 

The Committee may, in
good faith in the reasonable exercise of its discretion, take whatever
additional actions it deems appropriate to effect compliance by the Company and
the Participant of the Securities Act and any other federal or state securities
laws or regulations, including, without limitation, placing legends on share
certificates.  A certificate of shares
will be delivered to the Participant at the Company’s principal place of
business following the receipt by the Company of the executed documents
referenced in Section 4.2 above, unless an earlier date is agreed upon.  Notwithstanding the above, the Company shall
not be required to issue or deliver any certificate or certificates for shares
of Common Stock purchased prior to fulfillment of all of the following
conditions:

 

(a)                                  The
admission of such shares to listing on any and all stock exchanges on which
such class of stock is then listed;

 

(b)                                 The completion
of any registration or other qualification of such shares, or the determination
of exemption from registration or qualification, under any state or federal law
or under the rulings or regulations of the Securities and Exchange Commission
or any other governmental regulatory body, which the Committee shall, in good
faith, in the reasonable exercise of discretion, deem necessary or advisable;
and

 

(c)                                  The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in good faith,
in the reasonable exercise of its discretion, determine to be necessary or
advisable.

 

Section
4.4                                      Rights
as Stockholders

 

A Participant who
purchases shares of Common Stock pursuant to this Plan shall, upon (i) the
completion of the events identified in Section 4.2, and (ii) the issuance
of certificates representing such shares as provided for in Section 4.3,
immediately thereafter be a stockholder of the Company and shall have all of
the rights and privileges of a stockholder of the Company in respect of any
shares so purchased.

 

ARTICLE V.

ADMINISTRATION

 

Section
5.1                                      Duties
and Powers of the Committee

 

It shall be the duty of
the Committee to conduct the general administration of the Plan in accordance
with its provisions.  The Committee shall
have the power to interpret the Plan and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules.  All determinations and decisions made by the
Committee under any provision of the Plan, any Stock Purchase Agreement or the
Stockholders Agreement, which shall be made in good faith and in the reasonable
exercise of the Committee’s discretion, shall be final, conclusive and binding
on all persons. Any action required or permitted to be taken by the Committee
hereunder or under the

 

4

 

Stockholders
Agreement or any Stock Purchase Agreement may be taken by the Board.  All determinations and decisions made by the
Committee under any provision of the Plan, the Stockholders Agreement and Stock
Purchase Agreement shall be final, conclusive and binding on all persons.

 

Section
5.2                                      Compensation,
Professional Assistance, Good Faith Actions

 

The members of the
Committee shall receive such compensation for their services hereunder as may
be determined by the Board.  All expenses
and liabilities incurred by the members of the Committee or the Board in
connection with the administration of the Plan shall be borne by the
Company.  The Committee or the Board may
employ attorneys, consultants, accountants, appraisers, brokers or other
persons.  The Committee, the Company and
its Officers and members of the Board shall be entitled to rely upon the
advice, opinions or valuations of any such persons.  All actions taken and all interpretations and
determinations made by the Committee and the Board, in good faith shall be
final and binding upon all Participants, the Company and all other interested
persons.  No member of the Board shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan, and all members of the Board shall be fully
protected by the Company in respect to any such action, determination or
interpretation.

 

ARTICLE VI.

OTHER PROVISIONS

 

Section
6.1                                      Amendment,
Suspension or Termination of the Plan

 

The Plan may be wholly or
partially amended or otherwise modified, suspended or terminated at any time or
from time to time by the Board or the Committee.  This Plan shall terminate upon the earlier to
occur of (i) the date that all shares of Common Stock available for sale under
this Plan as set forth in Section 2.1 are sold to Participants, unless
additional shares of Common stock are added to the Plan, or (ii) ten years
after the date this Plan is adopted by the Board.

 

Section
6.2                                      Effect
of Plan Upon Other Compensation Plans

 

The adoption of this Plan
shall not affect any other compensation or incentive plans in effect for the
Company or any Subsidiary.  Nothing in
this Plan shall be construed to limit the right of the Company or any
Subsidiary (a) to establish any other forms of incentives or compensation for
Independent Directors, Consultants or Employees or (b) to grant or assume
options otherwise than under this Plan in connection with any proper corporate
purpose, including, but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.

 

Section
6.3                                      Conformity
to Securities Laws

 

The Plan is intended to
conform to the extent necessary with all provisions of the Securities Act and
the Exchange Act and any and all regulations and rules promulgated by the
Securities and Exchange Commission thereunder to the extent the Company or any
Participant is subject to the provisions thereof.  Notwithstanding anything herein to the
contrary, the Plan shall be administered only in such a manner as to conform to
such laws, rules and regulations.  To the

 

5

 

extent permitted
by applicable law, the Plan shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.

 

Section
6.4                                      Titles

 

Titles are provided
herein for convenience only and are not to serve as a basis for interpretation
or construction of the Plan.

 

Section
6.5                                      Governing
Law

 

To the extent not
preempted by federal law, the Plan shall be construed in accordance with and
governed by the laws of the state of Delaware.

 

Section
6.6                                      Severability

 

In the event any portion
of the Plan or any action taken pursuant thereto shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced as if
the illegal or invalid provisions had not been included, and the illegal or
invalid action shall be null and void.

 

I hereby certify that the
foregoing Plan was duly adopted by the Board on May 13, 2005.

 

Executed on this 13th day
of May, 2005.

 

 

	
   

  	
  /s/ Mike
  Andrzejewski

  	
   

  
	
   

  	
  Name:

  	
  Mike
  Andrzejewski

  	
   

  
	
   

  	
  Title:

  	
  Secretary

  	
   

  
					

 

6

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