Document:

Exhibit 10.9

 

 

Published
CUSIP
Number                    

 

CREDIT AGREEMENT

 

 

dated as of June 30, 2004

 

 

among

 

 

VERIFONE INTERMEDIATE HOLDINGS, INC.,

 

 

VERIFONE, INC.,

 

 

THE LENDERS FROM TIME TO TIME PARTY HERETO,

 

 

BANK OF AMERICA, N.A.,

as Administrative Agent, Senior Collateral Agent, 

Second Lien Collateral Agent, L/C Issuer and Swing Line Lender,

 

 

CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS
BRANCH,

as Syndication Agent,

 

 

and

 

 

WELLS FARGO BANK, N.A.,

as Documentation Agent

 

 

 

 

BANC OF AMERICA SECURITIES LLC

CREDIT SUISSE FIRST BOSTON LLC

as Sole Lead Arrangers and Sole Book Managers

 

 

 

Table of Contents*

 

	
  ARTICLE I

  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01

  	
  Defined Terms

  	
   

  
	
  Section 1.02

  	
  Other Interpretative Provisions

  	
   

  
	
  Section 1.03

  	
  Accounting Terms and Determinations

  	
   

  
	
  Section 1.04

  	
  Annualization; Rounding

  	
   

  
	
  Section 1.05

  	
  References to Agreements and Laws

  	
   

  
	
  Section 1.06

  	
  Times of Day

  	
   

  
	
  Section 1.07

  	
  Letter of Credit Amounts

  	
   

  
	
  Section 1.08

  	
  Classes and Types of Borrowings

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  THE CREDIT FACILITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01

  	
  Commitments to Lend.

  	
   

  
	
  Section 2.02

  	
  Notice of Borrowings.

  	
   

  
	
  Section 2.03

  	
  Notice to Lenders; Funding of Loans

  	
   

  
	
  Section 2.04

  	
  Evidence of Loans

  	
   

  
	
  Section 2.05

  	
  Letters of Credit

  	
   

  
	
  Section 2.06

  	
  Interest

  	
   

  
	
  Section 2.07

  	
  Extension and Conversion

  	
   

  
	
  Section 2.08

  	
  Maturity of Loans

  	
   

  
	
  Section 2.09

  	
  Prepayments

  	
   

  
	
  Section 2.10

  	
  Adjustment of Commitments

  	
   

  
	
  Section 2.11

  	
  Fees

  	
   

  
	
  Section 2.12

  	
  Pro-rata Treatment

  	
   

  
	
  Section 2.13

  	
  Sharing of Payments

  	
   

  
	
  Section 2.14

  	
  Payments; Computations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01

  	
  Taxes

  	
   

  
	
  Section 3.02

  	
  Illegality

  	
   

  
	
  Section 3.03

  	
  Inability to Determine Rates

  	
   

  
	
  Section 3.04

  	
  Increased Costs and Reduced Return; Capital
  Adequacy

  	
   

  
	
  Section 3.05

  	
  Funding Losses

  	
   

  
	
  Section 3.06

  	
  Base Rate Loans Substituted for Affected Eurodollar
  Loans

  	
   

  
	
  Section 3.07

  	
  Survival

  	
   

  

 

* The Table of Contents is not part of the Credit Agreement.

 

 

	
  ARTICLE
  IV

  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01

  	
  Conditions to Initial Credit Extension

  	
   

  
	
  Section 4.02

  	
  Determination of Conditions to Initial
  Credit Extension

  	
   

  
	
  Section 4.03

  	
  Conditions to All Credit Extensions

  	
   

  
	
  Section 4.04

  	
  Conditions Precedent to Facilities Increase

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Existence, Qualification and Power;
  Compliance with Laws

  	
   

  
	
  Section 5.02

  	
  Authorization; No Contravention

  	
   

  
	
  Section 5.03

  	
  Governmental Authorization; Other Consents

  	
   

  
	
  Section 5.04

  	
  Binding Effect

  	
   

  
	
  Section 5.05

  	
  Financial Condition; No Material Adverse
  Effect

  	
   

  
	
  Section 5.06

  	
  Litigation

  	
   

  
	
  Section 5.07

  	
  No Default

  	
   

  
	
  Section 5.08

  	
  Ownership of Property; Liens

  	
   

  
	
  Section 5.09

  	
  Environmental Compliance

  	
   

  
	
  Section 5.10

  	
  Insurance

  	
   

  
	
  Section 5.11

  	
  Taxes

  	
   

  
	
  Section 5.12

  	
  ERISA; Foreign Pension Plans; Employee
  Benefit Arrangements

  	
   

  
	
  Section 5.13

  	
  Subsidiaries

  	
   

  
	
  Section 5.14

  	
  Margin Regulations; Investment Company Act;
  Public Utility Holding Company Act

  	
   

  
	
  Section 5.15

  	
  Disclosure

  	
   

  
	
  Section 5.16

  	
  Compliance with Law

  	
   

  
	
  Section 5.17

  	
  Intellectual Property

  	
   

  
	
  Section 5.18

  	
  Purpose of Loans and Letters of Credit

  	
   

  
	
  Section 5.19

  	
  Labor Matters

  	
   

  
	
  Section 5.20

  	
  Solvency and Surplus

  	
   

  
	
  Section 5.21

  	
  Collateral Documents

  	
   

  
	
  Section 5.22

  	
  Ownership

  	
   

  
	
  Section 5.23

  	
  Certain Transactions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Financial Statements

  	
   

  
	
  Section 6.02

  	
  Certificates; Other Information

  	
   

  
	
  Section 6.03

  	
  Notices

  	
   

  
	
  Section 6.04

  	
  Payment of Obligations

  	
   

  
	
  Section 6.05

  	
  Preservation of Existence Etc

  	
   

  
	
  Section 6.06

  	
  Maintenance of Properties

  	
   

  
	
  Section 6.07

  	
  Insurance; Certain Proceeds

  	
   

  
	
  Section 6.08

  	
  Compliance with Laws

  	
   

  
	
  Section 6.09

  	
  Books and Records; Lender Meeting

  	
   

  
	
  Section 6.10

  	
  Inspection Rights

  	
   

  
	
  Section 6.11

  	
  Use of Proceeds

  	
   

  
	
  Section 6.12

  	
  Additional Loan Parties; Additional
  Security

  	
   

  

 

ii

 

	
  Section 6.13

  	
  Interest Rate Protection Agreements

  	
   

  
	
  Section 6.14

  	
  Contributions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Limitation on Indebtedness

  	
   

  
	
  Section 7.02

  	
  Restriction on Liens

  	
   

  
	
  Section 7.03

  	
  Nature of Business

  	
   

  
	
  Section 7.04

  	
  Consolidation, Merger and Dissolution

  	
   

  
	
  Section 7.05

  	
  Asset Dispositions

  	
   

  
	
  Section 7.06

  	
  Investments

  	
   

  
	
  Section 7.07

  	
  Restricted Payments, etc

  	
   

  
	
  Section 7.08

  	
  Payments of Indebtedness, etc

  	
   

  
	
  Section 7.09

  	
  Transactions with Affiliates

  	
   

  
	
  Section 7.10

  	
  Fiscal Year; Organizational and Other
  Documents

  	
   

  
	
  Section 7.11

  	
  Restrictions with Respect to Intercorporate
  Transfers

  	
   

  
	
  Section 7.12

  	
  Ownership of Subsidiaries; Limitations on
  Certain Activities

  	
   

  
	
  Section 7.13

  	
  Sale and Leaseback Transactions

  	
   

  
	
  Section 7.14

  	
  Capital Expenditures

  	
   

  
	
  Section 7.15

  	
  Additional Negative Pledges

  	
   

  
	
  Section 7.16

  	
  Impairment of Security Interests

  	
   

  
	
  Section 7.17

  	
  Financial Covenants

  	
   

  
	
  Section 7.18

  	
  Independence of Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  DEFAULTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Events of Default

  	
   

  
	
  Section 8.02

  	
  Acceleration; Remedies

  	
   

  
	
  Section 8.03

  	
  Rescission of Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  AGENCY PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Appointment and Authorization of the Agents

  	
   

  
	
  Section 9.02

  	
  Delegation of Duties

  	
   

  
	
  Section 9.03

  	
  Exculpatory Provisions

  	
   

  
	
  Section 9.04

  	
  Reliance on Communications

  	
   

  
	
  Section 9.05

  	
  Notice of Default

  	
   

  
	
  Section 9.06

  	
  Credit Decision; Disclosure of Information
  by Administrative Agent; No Reliance on Arranger’s or Agents’ Customer
  Identification Program

  	
   

  
	
  Section 9.07

  	
  Indemnification

  	
   

  
	
  Section 9.08

  	
  Agents in Their Individual Capacity

  	
   

  
	
  Section 9.09

  	
  Successor Agents

  	
   

  
	
  Section 9.10

  	
  Administrative Agent May File Proofs of
  Claim

  	
   

  
	
  Section 9.11

  	
  Collateral and Guaranty Matters

  	
   

  
	
  Section 9.12

  	
  Related Obligations

  	
   

  
	
  Section 9.13

  	
  Other Agents; Arrangers and Managers

  	
   

  
	
  Section 9.14

  	
  Agents’ Fees; Arranger Fee

  	
   

  

 

iii

 

	
  ARTICLE
  X

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Amendments, Etc

  	
   

  
	
  Section 10.02

  	
  Notices and Other Communications; Facsimile
  Copies

  	
   

  
	
  Section 10.03

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  Section 10.04

  	
  Attorney Costs, Expenses and Taxes

  	
   

  
	
  Section 10.05

  	
  Indemnification

  	
   

  
	
  Section 10.06

  	
  Payments Set Aside

  	
   

  
	
  Section 10.07

  	
  Successors and Assigns

  	
   

  
	
  Section 10.08

  	
  Confidentiality

  	
   

  
	
  Section 10.09

  	
  Set-off

  	
   

  
	
  Section 10.10

  	
  Interest Rate Limitation

  	
   

  
	
  Section 10.11

  	
  Counterparts

  	
   

  
	
  Section 10.12

  	
  Integration

  	
   

  
	
  Section 10.13

  	
  Survival of Representations and Warranties

  	
   

  
	
  Section 10.14

  	
  Severability

  	
   

  
	
  Section 10.15

  	
  Tax Forms

  	
   

  
	
  Section 10.16

  	
  Headings

  	
   

  
	
  Section 10.17

  	
  Governing Law; Submission to Jurisdiction

  	
   

  
	
  Section 10.18

  	
  Waiver of Right to Trial by Jury

  	
   

  
	
  Section 10.19

  	
  USA Patriot Act Notice; Lenders’ Compliance
  Certification

  	
   

  
	
  Section 10.20

  	
  Defaulting Lenders

  	
   

  
	
  Section 10.21

  	
  Binding Effect

  	
   

  
	
  Section 10.22

  	
  Judgment Currency

  	
   

  
	
  Section 10.23

  	
  Conflict

  	
   

  

 

Schedules:

 

	
  Schedule 1.01A

  	
  -

  	
  Consolidated EBITDA

  
	
  Schedule 1.01B

  	
  -

  	
  Refinanced Agreements

  
	
  Schedule 1.01C

  	
  -

  	
  Transaction Related Expenditures

  
	
  Schedule 1.01D

  	
  -

  	
  Applicable Basket Amounts

  
	
  Schedule 2.01

  	
   

  	
  Lenders and Commitments

  
	
  Schedule 2.05

  	
  -

  	
  Existing Letters of Credit

  
	
  Schedule 5.03

  	
  -

  	
  Required Consents, Authorizations, Notices and
  Filings

  
	
  Schedule 5.05

  	
  -

  	
  Certain Liabilities

  
	
  Schedule 5.06

  	
  -

  	
  Litigation

  
	
  Schedule 5.12

  	
  -

  	
  ERISA

  
	
  Schedule 5.13

  	
  -

  	
  Subsidiaries

  
	
  Schedule 5.16

  	
  -

  	
  Compliance with Law

  
	
  Schedule 5.17

  	
  -

  	
  Intellectual Property

  
	
  Schedule 5.22

  	
  -

  	
  Ownership of Holdings

  
	
  Schedule 5.23

  	
  -

  	
  Broker’s Fees

  
	
  Schedule 7.01

  	
  -

  	
  Indebtedness

  
	
  Schedule 7.02

  	
  -

  	
  Existing Liens

  
	
  Schedule 7.06

  	
  -

  	
  Existing Investments

  
	
  Schedule 7.09

  	
  -

  	
  Transactions with Affiliates

  
	
  Schedule 10.02

  	
  -

  	
  Administrative Agent’s Office, Certain Addresses for
  Notices

  

 

iv

 

Exhibits:

 

	
  Exhibit A-1

  	
  -

  	
  Form of Notice of Borrowing

  
	
  Exhibit A-2

  	
  -

  	
  Form of Notice of Extension/Conversion

  
	
  Exhibit A-3

  	
  -

  	
  Form of Letter of Credit Request

  
	
  Exhibit A-4

  	
  -

  	
  Form of Swing Line Loan Request

  
	
  Exhibit B-1

  	
  -

  	
  Form of Revolving Note

  
	
  Exhibit B-2

  	
  -

  	
  Form of Term B Note

  
	
  Exhibit B-3

  	
  -

  	
  Form of Second Lien Note

  
	
  Exhibit B-4

  	
  -

  	
  Form of Swing Line Note

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
  -

  	
  Form of Assignment and Assumption

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Form of Compliance Certificate

  
	
   

  	
   

  	
   

  
	
  Exhibit E

  	
  -

  	
  Form of Opinion of Counsel for the Borrower and the
  Other Loan Parties

  
	
   

  	
   

  	
   

  
	
  Exhibit F

  	
  -

  	
  Form of Guaranty

  
	
   

  	
   

  	
   

  
	
  Exhibit G-1A

  	
  -

  	
  Form of Senior Security Agreement

  
	
  Exhibit G-1B

  	
  -

  	
  Form of Second Lien Security Agreement

  
	
  Exhibit G-2A

  	
  -

  	
  Form of Senior Pledge Agreement

  
	
  Exhibit G-2B

  	
  -

  	
  Form of Second Lien Pledge Agreement

  
	
  Exhibit G-3

  	
  -

  	
  Form of Perfection Certificate

  
	
  Exhibit H

  	
  -

  	
  Form of Intercompany Note

  
	
   

  	
   

  	
   

  
	
  Exhibit I

  	
  -

  	
  Form of Intercompany Note Subordination Provisions

  
	
   

  	
   

  	
   

  
	
  Exhibit J

  	
  -

  	
  Form of Loan Party Accession Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit K

  	
  -

  	
  Form of OFAC/Anti-Terrorism Compliance Certificate

  
	
   

  	
   

  	
   

  
	
  Exhibit L

  	
  -

  	
  Form of Solvency Certificate

  
	
   

  	
   

  	
   

  
	
  Exhibit M

  	
  -

  	
  Form of Intercreditor Agreement

  

 

v

 

CREDIT AGREEMENT

 

This Credit Agreement is entered into as of June 30,
2004 among VERIFONE INTERMEDIATE HOLDINGS, INC., a Delaware corporation (“Holdings”),
VERIFONE, INC., a Delaware corporation (the “Borrower”), each lender
from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), BANK OF AMERICA, N.A., as Administrative
Agent for the Lenders, Collateral Agent for the Senior Lenders, Swing Line
Lender and L/C Issuer, BANK OF AMERICA, N.A., as Collateral Agent for the
Second Lien Lenders, CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH, as
Syndication Agent, and WELLS FARGO BANK, N.A., as Documentation Agent.

 

Holdings and the Borrower have requested the Lenders
to provide (i) senior secured revolving and term credit facilities to the
Borrower in an aggregate principal amount of up to $220,000,000, subject to
increase as provided herein, and (ii) a second lien, secured term credit
facility to the Borrower in an aggregate principal amount of up to $72,000,000,
all for the purposes as described herein. 
The Lenders are willing to make the requested credit facilities
available on the terms and conditions set forth herein.  Accordingly, in consideration of the mutual
covenants and agreements herein contained, the parties hereto covenant and
agree as follows:

 

ARTICLE
I

DEFINITIONS AND ACCOUNTING TERMS

 

Section
1.01  Defined Terms.  As
used in this Agreement, the following terms shall have the meanings set forth
below:

 

“Accession Agreement” means a Loan Party
Accession Agreement, substantially in the form of Exhibit J hereto, executed
and delivered by an Additional Subsidiary Guarantor after the Closing Date in
accordance with Section 6.12(a) or (d).

 

“Additional Collateral Documents” has the
meaning specified in Section 6.12(b).

 

“Additional Letter of Credit” means any letter
of credit issued hereunder by a L/C Issuer on or after the Closing Date.

 

“Additional Subsidiary Guarantor” means each
Person that becomes a Subsidiary Guarantor after the Closing Date by execution
of an Accession Agreement as provided in Section 6.12.

 

“Adjusted Eurodollar Rate” means, for the
Interest Period for each Eurodollar Loan comprising part of the same Group, the
quotient obtained (rounded upward, if necessary, to the next higher 1/100th of
1%) by dividing (i) the applicable Eurodollar Rate for such Interest Period by
(ii) 1.00 minus the Eurodollar Reserve Percentage.

 

“Administrative Agent” means Bank of America,
N.A. in its capacity as administrative agent under any of the Loan Documents,
or any successor administrative agent appointed in accordance with Section
9.09.

 

“Administrative Agent’s Office” means the
Administrative Agent’s address and, as appropriate, account as set forth on Schedule
10.02, or such other address or account as the Administrative Agent may
from time to time notify the Borrower and the Lenders.

 

 

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

 

“Affiliate” means, with respect to any Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.  As used herein, the term “Control”
means (i) the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting shares or their equivalent, by contract or
otherwise or (ii) with respect to any Person having voting shares or their
equivalent, the possession, directly or indirectly, of the power to vote 10% or
more of the Voting Securities of such Person.

 

“Agent” means the Administrative Agent, the
Syndication Agent, the Documentation Agent or a Collateral Agent and any
successors and assigns in such capacity appointed in accordance with Section
9.09, and “Agents” means any two or more of them.

 

“Agent-Related Persons” means the
Administrative Agent and the Collateral Agents, together with their respective
Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, Banc of America Securities LLC), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.

 

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

 

“Anti-Terrorism Laws” means any Laws relating
to terrorism or money-laundering, including, without limitation, (i) Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001 and
relating to Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism, (ii) the U.S. Patriot Act,
(iii) the International Emergency Economic Power Act, 50 U.S.C. §1701 et seq.,
(iv) the Bank Secrecy Act, (v) the Trading with the Enemy Act, 50 U.S.C. App. 1
et seq. and (vi) any related rules and regulations of the U.S. Treasury
Department’s Office of Foreign Assets Control or any other Governmental
Authority, in each case as the same may be amended, supplemented, modified,
replaced or otherwise in effect from time to time.

 

“Applicable Basket Amount”, with respect to any
specific provision of this Agreement, has the meaning set forth on Schedule
1.01D opposite the reference to such provision.

 

“Applicable Collateral Agent” means (i) the
Senior Collateral Agent prior to the payment in full of all Senior Obligations
and (ii) thereafter, the Second Lien Collateral Agent.

 

“Applicable Lending Office” means (i) with
respect to any Lender and for each Type of Loan, the “Lending Office” of such
Lender (or of an Affiliate of such Lender) designated for such Type of Loan in
such Lender’s Administrative Questionnaire or in any applicable Assignment and
Assumption pursuant to which such Lender became a Lender hereunder or such
other office of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Administrative Agent and the Borrower as the
office by which its Loans of such Type are to be made and maintained and (ii)
with respect to any L/C Issuer and for each Letter of Credit, the “Lending
Office” of such L/C Issuer (or of an Affiliate of such L/C Issuer) designated
on the signature pages hereto or such other office of such L/C Issuer (or of an
Affiliate of such L/C Issuer) as such L/C Issuer may from time to time specify
to the Administrative Agent and the Borrower as the office by which its Letters
of Credit are to be issued and maintained.

 

2

 

“Applicable Margin” means (i) with respect to
Term B Loans, 2.50% per annum for Eurodollar Loans and 1.50% per annum for Base
Rate Loans, (ii) with respect to Second Lien Loans, 6.00% per annum for
Eurodollar Loans and 5.00% for Base Rate Loans and (iii) for purposes of
calculating (A) the applicable interest rate for any day for any Revolving Loan
or Swing Line Loan, (B) the applicable rate of the Commitment Fee for any day
for purposes of Section 2.11(a), (C) the applicable rate of the Standby
Letter of Credit Fee for any day for purposes of Section 2.11(b)(i) or
(D) the applicable rate of the Trade Letter of Credit Fee for any day for
purposes of Section 2.11(b)(ii), the appropriate applicable margin set
forth below corresponding to the Leverage Ratio as of the most recent
Calculation Date:

 

Revolving Loans, Swing Line Loans And Fees

 

	
  Pricing

  Level

  	
   

  	
  Leverage

  Ratio

  	
   

  	
  Applicable

  Margin

  For

  Eurodollar

  Loans

  	
   

  	
  Applicable

  Margin

  For Base

  Rate

  Loans

  	
   

  	
  Applicable

  Margin

  For

  Commitment

  Fees

  	
   

  	
  Applicable

  Margin

  For Standby

  Letter of

  Credit Fee

  	
   

  	
  Applicable

  Margin

  For Trade

  Letter of

  Credit Fee

  	
   

  
	
  I

  	
   

  	
  3 4.5 to 1.0

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  	
  .500

  	
  %

  	
  2.75

  	
  %

  	
  2.75

  	
  %

  
	
  II

  	
   

  	
  <4.5 to 1.0 but 34.0
  to 1.0

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  .500

  	
  %

  	
  2.50

  	
  %

  	
  2.50

  	
  %

  
	
  III

  	
   

  	
  <4.0 to 1.0 but 33.5
  to 1.0

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  	
  .500

  	
  %

  	
  2.25

  	
  %

  	
  2.25

  	
  %

  
	
  IV

  	
   

  	
  <3.5 to 1.0 but 33.0
  to 1.0

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  .500

  	
  %

  	
  2.00

  	
  %

  	
  2.00

  	
  %

  
	
  V

  	
   

  	
  <3.0

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  	
  .375

  	
  %

  	
  1.75

  	
  %

  	
  1.75

  	
  %

  

 

Each Applicable Margin shall be determined and
adjusted quarterly on the date (each a “Calculation Date”) five Business
Days after the date by which the Borrower is required to provide the
consolidated financial information required by Section 6.01(a) or (b)
and the Compliance Certificate required by Section 6.02(b) for the
fiscal quarter or year of the Borrower most recently ended prior to the
Calculation Date; provided, however, that:  (i) each initial Applicable Margin shall be
based on Pricing Level I (as shown above) and shall remain at Pricing Level I
until the first Calculation Date occurring after the end of the first full
fiscal quarter of the Borrower occurring subsequent to the Closing Date and,
thereafter, each Applicable Margin shall be based on the Pricing Level (as
shown above) corresponding to the Leverage Ratio as of the last day of the most
recently ended fiscal quarter or year of the Borrower preceding the applicable
Calculation Date; and (ii) if the Borrower fails to provide the consolidated
financial information required by Section 6.01(a) or (b) or the
Compliance Certificate required by Section 6.02(b) for the most recently
ended fiscal quarter or year of the Borrower preceding any applicable
Calculation Date, each Applicable Margin from such Calculation Date shall be
based on Pricing Level I (as shown above) until such time as such consolidated
financial information and an appropriate officer’s certificate is provided,
whereupon each Applicable Margin shall be based on the Pricing Level (as shown
above) corresponding to the Leverage Ratio as of the last day of the most
recently ended fiscal quarter or year of the Borrower preceding such
Calculation Date.  Each Applicable Margin
shall be effective from one Calculation Date until the next Calculation
Date.  Any adjustment in the Applicable
Margins shall be applicable to all Loans and Letters of Credit then existing or
subsequently made or issued.

 

“Approved Fund” has the meaning specified in Section
10.07(g).

 

“Asset Disposition” means any sale, (including
any Sale/Leaseback Transaction, whether or not involving a Capital Lease),
lease, transfer or other disposition (including any such transaction involving
a transfer of assets effected by way of merger or consolidation and including
any sale or other disposition by any Group Company of Equity Interests in one
or more of its Subsidiaries, but excluding

 

3

 

any sale or other
disposition by way of Casualty or Condemnation) by any Group Company of any
asset.  For avoidance of doubt, an Equity
Issuance by any Person shall not constitute an Asset Disposition.

 

“Assignment and Assumption” means an Assignment
and Assumption, substantially in the form of Exhibit C hereto.

 

“Attorney Costs” means and includes all
reasonable fees, expenses and disbursements of any law firm or other external
counsel.

 

“Attributable Indebtedness” means, at any date,
(i) in respect of any Capital Lease of any Person, the capitalized amount
thereof that would appear on a balance sheet as Indebtedness of such Person
prepared as of such date in accordance with GAAP, (ii) in respect of any
Synthetic Lease Obligation of any Person, the capitalized or principal amount
of the remaining lease payments under the relevant lease that would appear on a
balance sheet as Indebtedness of such Person prepared as of such date in
accordance with GAAP if such lease or other agreement were accounted for as a
Capital Lease and (iii) in respect of any Sale/Leaseback Transaction, the lesser
of (A) the present value, discounted in accordance with GAAP at the interest
rate implicit in the related lease, of the obligations of the lessee for net
rental payments over the remaining term of such lease (including any period for
which such lease has been extended or may, at the option of the lessor be
extended) and (B) the fair market value of the assets subject to such
transaction.

 

“Audited Financial Statements” means the
audited consolidated balance sheet of Parent Holdings and its Consolidated Subsidiaries
for the fiscal year ended October 31, 2003 and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for
such fiscal year of Parent Holdings and its Consolidated Subsidiaries,
including the notes thereto.

 

“Auto-Extension Letter of Credit” has the
meaning specified in Section 2.05(d).

 

“Availability Period” means the period from and
including the Closing Date to the earliest of (i) the Revolving Termination
Date, (ii) the date of the termination of the Commitments pursuant to Section
2.10 and (iii) the date of termination of the commitment of each Lender to
make Loans and of the obligation of the L/C Issuers issue, extend or increase
Letters of Credit pursuant to Section 8.02.

 

“Bank of America” means Bank of America, N.A.,
a national banking association, and its successors appointed in accordance with
Section 9.09.

 

“Bank Secrecy Act” means the Financial
Recordkeeping and Reporting of Currency and Foreign Transactions Act of 1970,
31 U.S.C. 1051, et seq., as the same may be amended, supplemented, modified,
replaced or otherwise in effect from time to time.

 

“Base Rate” means, for any day, a rate per
annum equal to the higher of (i) the Federal Funds Rate plus 1⁄2 of 1% and (ii)
the rate of interest in effect for such day as publicly announced from time to
time by Bank of America as its “prime rate”. 
The “prime rate” is a rate set by Bank of America based upon various
factors including Bank of America’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above or below such announced rate.  Any change in such rate announced by Bank of
America shall take effect at the opening of business on the day specified in
the public announcement of such change.

 

“Base Rate Loan” means a Loan that bears
interest based on the Base Rate.

 

4

 

“Borrower” means VeriFone, Inc., a Delaware
corporation, and its successors.

 

“Borrowing” has the meaning specified in Section
1.08.

 

“Business Acquisition” means the acquisition by
the Borrower or one or more of its Wholly-Owned Subsidiaries of all of the
Equity Interests of, or all (or any division, line of business or any
substantial part for which audited financial statements or other financial
information reasonably satisfactory to the Administrative Agent is available)
of the assets or property of, another Person.

 

“Business Day” means any day other than a
Saturday, Sunday or other day on which commercial banks are authorized to close
under the Laws of, or are in fact closed in, the state where the Administrative
Agent’s Office is located, except that (i) when used in Section 2.05
with respect to any action taken by or with respect to any L/C Issuer, the term
“Business Day” shall not include any day on which commercial banks are
authorized to close under the Laws of, or are in fact closed in, the
jurisdiction where such L/C Issuer’s Applicable Lending Office is located, and
(ii) if such day relates to a borrowing of, a payment or prepayment of
principal of or interest on, or the Interest Period for, a Eurodollar Loan, or
a notice by the Borrower with respect to any such borrowing, payment,
prepayment or Interest Period, such day shall also be a day on which dealings
in Dollar deposits are conducted by and between banks in the London interbank
eurodollar market.

 

“Capital Lease” of any Person means any lease
of (or other arrangement conveying the right to use) property (whether real,
personal or mixed) by such Person as lessee which would, in accordance with
GAAP, be required to be accounted for as a capital lease on the balance sheet
of such Person.

 

“Capital Lease Obligations” means, with respect
to any Person, all obligations of such Person as lessee under Capital Leases,
in each case taken at the amount thereof accounted for as liabilities in
accordance with GAAP.

 

“Cash Collateralize” means to pledge and
deposit with or deliver to the Senior Collateral Agent, for the benefit of the
L/C Issuers and the Revolving Lenders, as collateral for the L/C Obligations,
cash or deposit balances pursuant to documentation in form and substance
reasonably satisfactory to the Administrative Agent and the L/C Issuers.

 

“Cash Equivalents” means:

 

(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 three months from the date of acquisition;

 

(ii)           Dollar-denominated
certificates of deposit of (A) any Lender, (B) any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000 or (C)
any bank 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 (any such bank being an “Approved Lender”), in each case with
maturities of not more than 90 days from the date of acquisition;

 

(iii)          commercial
paper and variable or fixed rate notes issued by any Approved Lender (or by the
parent company thereof) or any variable rate notes issued by, or guaranteed by,
any domestic corporation not an Affiliate of the Borrower rated A-1 (or the

 

5

 

equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better by
Moody’s and maturing within three months of the date of acquisition;

 

(iv)          repurchase
agreements with a term of not more than seven days with a bank or trust company
(including any of the Lenders) or recognized securities dealer having capital
and surplus in excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States of America in which the Borrower or one or more
of its Subsidiaries shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase obligations; and

 

(v)           investments,
classified in accordance with GAAP as current assets, in money market
investment programs registered under the Investment Company Act of 1940, as
amended, which are administered by reputable financial institutions having
capital of at least $500,000,000 and the portfolios of which are limited to
Investments of the character described in the foregoing clauses (i)
through (iv).

 

“Cash Management Obligation” means, as applied
to any Person, any direct or indirect liability, contingent or otherwise, of
such Person in respect of cash management services (including treasury,
depository, overdraft, credit or debit card, electronic funds transfer and
other cash management arrangements) provided by any Lender or its Affiliates in
connection with any Loan Document, including obligations for the payment of
agreed interest and reasonable, fees, charges, expenses, Attorney Costs and
disbursements in connection therewith.

 

“Casualty” means any casualty, loss, damage,
destruction or other similar loss with respect to real or personal property or
improvements.

 

“Casualty Insurance Policy” means any insurance
policy maintained by any Group Company covering losses with respect to
Casualties.

 

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

 

(i)            prior to
a Qualifying IPO, (A) Parent Holdings or Holdings shall cease to own, directly
or indirectly, 100% of the Equity Interests in the Borrower on a fully-diluted
basis assuming the conversion and exercise of all outstanding Equity
Equivalents (whether or not such securities are then currently convertible or
exercisable), (B) the Sponsor shall beneficially own, directly or indirectly,
or control through contractual voting arrangements less than a majority of the
Equity Interests of Parent Holdings, or (C) the failure at any time of the
Sponsor to control, whether through the ownership of voting securities or by
contract, a majority of the seats on the board of directors (or persons
performing similar functions) of Parent Holdings; or

 

(ii)           after a
Qualifying IPO, (A) Parent Holdings or Holdings shall cease to own, directly or
indirectly, 100% of the Equity Interests in the Borrower on a fully-diluted
basis assuming the conversion and exercise of all outstanding Equity Equivalents
(whether or not such securities are then currently convertible or exercisable),
or (B)(x) any “person” or “group” (within the meaning of Section 13(d) or 14(d)
of the Exchange Act) (other than one or more members of the Investor Group) has
become the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have “beneficial
ownership” of all securities that any such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), by way of merger, consolidation or otherwise, of 35% or more of the
Equity Interests of Parent Holdings on a fully-diluted basis after giving
effect

 

6

 

to the conversion
and exercise of all outstanding Equity Equivalents (whether or not such
securities are then currently convertible or exercisable), and (y) such Person
or group is or becomes, directly or indirectly, the beneficial owner of a
greater percentage of the Voting Securities of Parent Holdings, calculated on a
fully-diluted basis as set forth above, than the percentage of the voting power
of the Voting Securities owned by the Investor Group; or

 

(iii)          after
a Qualifying IPO, during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the board of
directors (or persons performing similar functions) of Parent Holdings together
with any new members of such board of directors (A) whose elections by such
board of directors or whose nominations for election by the stockholders of
Parent Holdings was approved by a vote of a majority of the members of such
board of directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved (excluding, in the case of this clause (A), any
individual whose initial nomination for, or assumption of office as, a member
of such board of directors occurs as a result of an actual or threatened solicitation
of proxies or consents for the election or removal of one or more directors by
any person or group other than a solicitation for the election of one or more
directors by or on behalf of the board of directors) or (B) elected by the
Investor Group, cease for any reason to constitute a majority of the directors
of Parent Holdings still in office.

 

“Class” has the meaning specified in Section
1.08.

 

“Closing Date” means the date on or after the
Effective Date when the first Credit Extension occurs in accordance with Section
4.01.

 

“Code” means the Internal Revenue Code of 1986,
as amended, and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to time.

 

“Collateral” means all of the property which is
subject or is purported to be subject to the Liens granted by the Collateral
Documents.

 

“Collateral Agent” means the Senior Collateral
Agent or the Second Lien Collateral Agent, and “Collateral Agents” means
both of them, collectively.

 

“Collateral Documents” means, collectively, the
Security Agreements, the Pledge Agreements, the Depositary Bank Agreements, any
Additional Collateral Documents, any additional pledges, security agreements,
patent, trademark or copyright filings or mortgages required to be delivered
pursuant to the Loan Documents and any instruments of assignment, control
agreements or other instruments or agreements executed pursuant to the
foregoing.

 

“Commitment” means (i) with respect to each
Lender, its Revolving Commitment, Term B Commitment and/or Second Lien
Commitment, as and to the extent applicable, (ii) with respect to each L/C
Issuer, its L/C Commitment and (iii) with respect to the Swing Line Lender, the
Swing Line Commitment, in each case as set forth on Schedule 2.01 or in
the applicable Assignment and Assumption pursuant to which such Lender becomes
a party hereto, as applicable, as its Commitment of the applicable Class, as
any such amount may be adjusted from time to time in accordance with this Agreement.

 

“Commitment Fee” has the meaning specified in Section
2.11(a).

 

7

 

“Compliance Certificate” means a certificate
substantially in the form of Exhibit D hereto.

 

“Condemnation” means any taking by a
Governmental Authority of property or assets, or any part thereof or interest
therein, for public or quasi-public use under the power of eminent domain, by
reason of any public improvement or condemnation or in any other manner.

 

“Condemnation Award” means all proceeds of any
Condemnation.

 

“Consolidated Adjusted Working Capital” means
at any date the excess of (i) Consolidated Current Assets (excluding cash and
Cash Equivalents classified as such in accordance with GAAP) over (ii)
Consolidated Current Liabilities (excluding the current portion of any
Consolidated Funded Indebtedness).

 

“Consolidated Capital Expenditures” means for
any period the aggregate amount of all expenditures (whether paid in cash or
other consideration or accrued as a liability) that would, in accordance with
GAAP, be included as additions to property, plant and equipment and other
capital expenditures of Holdings and its Consolidated Subsidiaries for such
period, excluding interest capitalized during construction, in each case as the
same are or would be set forth in a consolidated statement of cash flows of
Holdings and its Consolidated Subsidiaries for such period (including the
amount of assets leased under any Capital Lease), but excluding (to the extent
that they would otherwise be included) (i) any such expenditures made for the
replacement or restoration of assets to the extent paid for by any Casualty
Insurance Policy or Condemnation Award with respect to the asset or assets
being replaced or restored to the extent such expenditures are permitted under
the Loan Documents, (ii) any such expenditures made with proceeds of a
Qualifying Equity Issuance or to the extent that Holdings or any of its
Consolidated Subsidiaries has received or will receive reimbursement in cash
from a third party other than Holdings or one or more if its Consolidated
Subsidiaries and (iii) for purposes of Section 7.14 only, capital
expenditures for Permitted Business Acquisitions and Permitted Joint Ventures.

 

“Consolidated Cash Interest Expense” means for
any period Consolidated Interest Expense that has been paid or is payable in
cash for such period other than (to the extent, but only to the extent,
included in the determination of Consolidated Interest Expense for such period
in accordance with GAAP and paid in cash for such period):  (i) amortization of debt discount and debt
issuance fees, (ii) any fees (including underwriting fees and expenses paid in
connection with the consummation of the Transaction or Permitted Business
Acquisitions, (iii) any payments made or expenses incurred to obtain Swap
Agreements, (iv) any fees paid or required to be paid pursuant to any Loan
Document and (v) annual agency fees, unused line fees and letter of credit fees
and expenses paid hereunder; provided that Consolidated Cash Interest
Expense for any period of four fiscal quarters ending on the last day of the
first, second or third fiscal quarters of Holdings first ending after the
Closing Date shall be deemed equal to the product of (i) Consolidated Cash
Interest Expense computed in accordance with the requirements of this
definition for such one, two or three quarter period multiplied by (ii) a
fraction, the numerator of which is four and the denominator of which is the
number of such fiscal quarters ended after the Closing Date.

 

“Consolidated Cash Taxes” means for any period
the aggregate amount of all taxes of Holdings and its Consolidated Subsidiaries
for such period to the extent the same are paid in cash by Holdings or any
Consolidated Subsidiary of Holdings during such period; provided that
Consolidated Cash Taxes for any period of four fiscal quarters ending on the
last day of the first, second or third fiscal quarters of Holdings first ending
after the Closing Date shall be deemed equal to the product of (i) Consolidated
Cash Taxes computed in accordance with the requirements of this definition for
such one,

 

8

 

two or three quarter
period multiplied by (ii) a fraction, the numerator of which is four and the
denominator of which is the number of such fiscal quarters ended after the
Closing Date.

 

“Consolidated Current Assets” means at any date
the consolidated current assets of Holdings and its Consolidated Subsidiaries
determined as of such date.

 

“Consolidated Current Liabilities” means at any
date, without duplication, (i) the consolidated current liabilities of Holdings
and its Consolidated Subsidiaries plus (ii) all Guaranty Obligations of
Holdings or any Consolidated Subsidiary of Holdings in respect of the current
liabilities of any Person (other than Holdings or a Consolidated Subsidiary of
Holdings), determined as of such date.

 

“Consolidated EBITDA” means for any period the
sum of:

 

(i)            Consolidated
Net Income for such period (excluding therefrom (x) any extraordinary or
non-recurring items of gain or loss and (y) any gain or loss from discontinued
operations); plus

 

(ii)           to the
extent not otherwise included in the determination of Consolidated Net Income
for such period, all net cash proceeds of business interruption insurance
policies, if any, received during such period; plus

 

(iii)          without duplication,
those amounts which, in the determination of Consolidated Net Income for such
period, have been deducted for (A) Consolidated Interest Expense, (B) the principal
component of Synthetic Lease Obligations paid or payable in cash under leases
accounted for as Operating Leases during such period but which constitute
Synthetic Leases hereunder, (C) Federal, state, local and foreign income tax,
franchise taxes and state single business unitary and similar taxes imposed in
lieu of income tax, (D) depreciation, amortization (including, without
limitation, amortization of goodwill and other intangible assets), impairment
of goodwill and other nonrecurring, non-cash charges or expenses (excluding any
such non-cash charge or expense to the extent that it represents amortization
of a prepaid cash expense that was paid in a prior period or an accrual of, or
a reserve for, cash charges or expenses in any future period), (E) non-cash
compensation expense, or other non-cash expenses or charges, arising from the
sale of stock, the granting of stock options, the granting of stock
appreciation rights and similar arrangements (including any repricing,
amendment, modification, substitution or change of any such stock, stock
option, stock appreciation rights or similar arrangements), (F) non-cash
purchase accounting adjustments in accordance with GAAP, (G) Management Fees,
(H) any financial advisory fees, accounting fees, legal fees and other similar
advisory and consulting fees and related out-of-pocket expenses of the Borrower
incurred as a result of the Transaction and deducted from net income during the
period ending October 31, 2004, (I) Transaction related expenditures (including
cash charges in respect of strategic market reviews, management bonuses, early
retirement of Indebtedness, restructuring, consolidation, severance or
discontinuance of any portion of operations, employees and/or management)
described in Schedule 1.01C, (J) the amount of (x) any expense to the
extent that a corresponding amount is received in cash by a Group Company from
a Person other than Holdings or any Subsidiary of Holdings under any agreement
providing for reimbursement of such expense or (y) any expenses with respect to
liability or casualty events, business interruption or product recalls, to the
extent covered by insurance (it being understood that if the amount received in
cash under any such agreement in any period exceeds the amount of expense paid
during such period such excess amounts received may be carried forward and
applied against expenses in future periods), (K) any financial advisory fees,
accounting fees, legal fees and other similar advisory and consulting fees and
related out-of-pocket expenses of the Borrower and its Consolidated
Subsidiaries incurred as

 

9

 

a result of
Permitted Business Acquisitions, a Qualifying IPO or a Public Debt Issuance and
(L) non-recurring cash charges resulting from severance, integration,
restructuring costs and other adjustments made as a result of Permitted
Business Acquisitions, provided that the amounts referred to in this clause
(L) reported in any fiscal period ending after March 31, 2004 shall not, in
the aggregate, exceed 20% of the aggregate consideration paid in connection
with Permitted Business Acquisitions; minus

 

(iv)          any amount
which, in the determination of Consolidated Net Income for such period, has
been added for (A) interest income and (B) any non-cash income or non-cash
gains, all as determined in accordance with GAAP;

 

provided that Consolidated EBITDA
for any fiscal period ending prior to the Closing Date which is identified on Schedule
1.01A hereto shall be deemed to equal the amount set forth on Schedule
1.01A opposite such period.  For
purposes of calculating Consolidated EBITDA for any period of four consecutive
fiscal quarters (each, a “Reference Period”) pursuant to any
determination of the Leverage Ratio, the Senior Secured Leverage Ratio or the
Senior Leverage Ratio and the Fixed Charge Coverage Ratio, if during such
Reference Period (or in the case of pro-forma calculations, during the period
from the last day of such Reference Period to and including the date as of
which such calculation is made) any Group Company shall have made an Asset
Disposition or a Permitted Business Acquisition, Consolidated EBITDA for such
Reference Period shall be calculated after giving effect thereto on a Pro-Forma
Basis giving effect to projected or anticipated cost savings and synergies
permitted or required by Regulations S-K or S-X under the Securities Act or
otherwise agreed to by the Administrative Agent in its reasonable discretion.

 

“Consolidated Fixed Charges” means, for any
period, the sum of (i) Consolidated Cash Interest Expense plus (ii)
Consolidated Scheduled Debt Payments.

 

“Consolidated Funded Indebtedness” means at any
date the Funded Indebtedness of Holdings and its Consolidated Subsidiaries as
of such date, determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Indebtedness” means at any date
the Indebtedness of Holdings and its Consolidated Subsidiaries, determined on a
consolidated basis as of such date.

 

“Consolidated Interest Expense” means, for any
period, the total interest expense, whether paid or accrued, (including,
without limitation, amortization of debt issuance costs and original issue
discount, interest capitalized during construction, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments under Capital Leases and the implied interest
component of Synthetic Leases (regardless of whether accounted for as interest
expense under GAAP), all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers’ acceptances and net costs in
respect of Swap Obligations constituting interest rate swaps, collars, caps or
other arrangements requiring payments contingent upon interest rates of
Holdings and its Consolidated Subsidiaries), net of interest income, in each
case determined on a consolidated basis for such period; provided that
any interest on Indebtedness of another Person that is guaranteed by Holdings
or any of its Consolidated Subsidiaries or secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) a Lien on, or payable out of the proceeds of the sale of or
production from, assets of Holdings or any of its Consolidated Subsidiaries
(whether or not such guarantee or Lien is called upon) shall be included.

 

“Consolidated Net Income” means, for any
period, the net income (or net loss) after taxes of Holdings and its
Consolidated Subsidiaries for such period, determined on a consolidated basis
in

 

10

 

accordance with GAAP; provided
that there shall be excluded from the calculation of Consolidated Net Income
for any period (i) the income (or loss) of any Person in which any other Person
(other than Holdings or any of its Wholly-Owned Subsidiaries) has an ownership
interest, except to the extent that any such income is actually distributed in
cash to Holdings or such Wholly-Owned Subsidiary during such period, (ii) the
income (or loss) of any Person accrued prior to the date it becomes a
Consolidated Subsidiary of Holdings or is merged with or into or consolidated
with Holdings or any of its Consolidated Subsidiaries or that Person’s assets
are acquired by Holdings or any of its Consolidated Subsidiaries, except as
provided in the definitions of “Consolidated EBIDTA” and “Pro-Forma
Basis” herein and (iii) the income of any Subsidiary of Holdings to the
extent that the declaration or payment of Restricted Payments or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary.

 

“Consolidated Scheduled Debt Payments” means,
for any period, the sum of all scheduled payments of principal on the Loans and
all other Consolidated Funded Indebtedness (including, without limitation, the
principal component of Capital Lease Obligations and Synthetic Lease
Obligations (regardless of whether accounted for as indebtedness under GAAP)
paid or payable during such period), but excluding payments due on Revolving
Loans and Swing Line Loans during such period; provided that
Consolidated Scheduled Debt Payments for any period shall not include voluntary
prepayments of Consolidated Funded Indebtedness, mandatory prepayments of the
Term B Loans or Second Lien Loans pursuant to Section 2.09(b) or other
mandatory prepayments (other than by virtue of scheduled amortization) of
Consolidated Funded Indebtedness (but Consolidated Scheduled Debt Payments for
a period shall be adjusted to reflect the effect on scheduled payments of
principal for such period of the application of any prepayments of Consolidated
Funded Indebtedness during or preceding such period).

 

“Consolidated Secured Indebtedness” means at
any date (i) the Senior Loans, (ii) the Second Lien Loans and (iii) any other
Consolidated Funded Indebtedness of Holdings and its Consolidated Subsidiaries
that on such date is secured by a valid and perfected Lien, determined on a
consolidated basis as of such date.

 

“Consolidated Subsidiary” means with respect to
any Person at any date any Subsidiary of such Person or other entity the
accounts of which would be consolidated with those of such Person in its
consolidated financial statements if such statements were prepared as of such
date in accordance with GAAP.

 

“Consolidated Total Assets” means at any date
the total consolidated assets of Holdings and its Consolidated Subsidiaries
determined as of such date.

 

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

 

“Control” has the meaning specified in the
definition of “Affiliate”.

 

“Credit Extension” means a Borrowing or the
issuance, renewal, extension or increase of a Letter of Credit.

 

“Credit Obligations” means, at any date, the
Senior Credit Obligations and the Second Lien Obligations.

 

11

 

“Debt Equivalents” of any Person means (i) any
Equity Interest of such Person which by its terms (or by the terms of any
security for which it is convertible or for which it is exchangeable or
exercisable), or upon the happening of any event or otherwise (including an
event which would constitute a Change of Control), (A) matures or is
mandatorily redeemable or subject to any mandatory repurchase requirement,
pursuant to a sinking fund or otherwise, (B) is convertible into or
exchangeable for Indebtedness or Debt Equivalents or (C) is redeemable or
subject to any repurchase requirement arising at the option of the holder
thereof, in whole or in part, in each case on or prior to the date which is six
months after the latest of the Revolving Termination Date, the Term B Maturity
Date and the Second Lien Maturity Date and (ii) if such Person is a Subsidiary
of the Borrower but not a Loan Party, any Preferred Stock of such Person.

 

“Debt Issuance” means the issuance by any Group
Company of any Indebtedness.

 

“Debtor Relief Laws” means the Bankruptcy Code
of the United States, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.

 

“Default” means any condition or event which
constitutes an Event of Default or which with the giving of notice or lapse of
applicable grace periods or both would, unless cured or waived, become an Event
of Default.

 

“Defaulting Lender” means at any time any
Lender that, within one Business Day of when due, (i) has failed to make a Loan
or purchase a Participation Interest in a Swing Line Loan or an L/C Obligation
required pursuant to the terms of this Agreement, (ii) other than as set forth
in clause (i) above, has failed to pay to any Agent or any Lender an
amount owed by such Lender pursuant to the terms of the Agreement or any other
Loan Document unless such amount is subject to a good faith dispute or (iii)
has been deemed insolvent or has become subject to a receivership or insolvency
event.

 

“Default Rate” means, for any day and with
respect to any amount owing under any Loan Document, an interest rate equal to
the applicable rate specified in Section 2.06(e).

 

“Depositary Bank Agreement” means an agreement
between a Loan Party and any bank or other depositary institution,
substantially in the form of, or containing terms substantially equivalent to
those in, Exhibit D to the Security Agreements, as the same may be
amended, modified or supplemented from time to time.

 

“Dollars” and the sign “$” means lawful
money of the United States of America.

 

“Domestic Subsidiary” means with respect to any
Person each Subsidiary of such Person that is organized under the laws of the
United States or any political subdivision or any territory thereof, and “Domestic
Subsidiaries” means any two or more of them.

 

“Effective Date” means the date this Agreement
becomes effective in accordance with Section 10.21.

 

“Eligible Assignee” has the meaning specified
in Section 10.07(g).

 

“Employee Benefit Arrangements” means in any
jurisdiction the material benefit schemes or arrangements in respect of any
employees or past employees operated by any Group Company or in which any Group
Company participates and which provide benefits on retirement, ill-health,

 

12

 

injury, death or
voluntary withdrawal from or termination of employment, including termination
indemnity payments and life assurance and post-retirement medical benefits,
other than Plans and Foreign Pension Plans.

 

“Environmental Laws” means any and all Federal,
state, local, and foreign statutes, Laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and wastewater
discharges.

 

“Environmental Liability” means any liability,
contingent or otherwise (including any liability for damages, costs of
remediation, fines, penalties or indemnities), of any Group Company directly or
indirectly resulting from or based on (i) violation of any Environmental Law,
(ii) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Material, (iii) exposure to any Hazardous Material,
(iv) the release or threatened release of any Hazardous Material into the
environment or (v) any contract, agreement or other consensual arrangement pursuant
to which liability is assumed or imposed with respect to any of the foregoing.

 

“Equity Distribution” means the distribution of
cash on the Closing Date by the Borrower to Holdings and in turn by Holdings to
Parent Holdings in each case to or for the benefit of Parent Holdings’ common
stockholders in an aggregate amount not exceeding the sum of (i) $93,500,000
plus (ii) the amount by which the aggregate outstanding principal amount of the
Borrower’s Indebtedness under all Refinanced Agreements on the Closing Date
(immediately prior to giving effect to the Transaction) is less than the amount
of such Indebtedness on April 30, 2004.

 

“Equity Equivalents” means with respect to any
Person any rights, warrants, options, convertible securities, exchangeable securities,
indebtedness or other rights, in each case exercisable for or convertible or
exchangeable into, directly or indirectly, Equity Interests of such Person or
securities exercisable for or convertible or exchangeable into Equity Interests
of such Person, whether at the time of issuance or upon the passage of time or
the occurrence of some future event.

 

“Equity Interests” means all shares of capital
stock, partnership interests (whether general or limited), limited liability
company membership interests, beneficial interests in a trust and any other
interest or participation that confers on a Person the right to receive a share
of profits or losses, or distributions of assets, of an issuing Person, but
excluding any debt securities convertible into such Equity Interests.

 

“Equity Issuance” means (i) any sale or
issuance by any Group Company to any Person other than Holdings or a Subsidiary
of Holdings of any Equity Interests or any Equity Equivalents (other than any
such Equity Equivalents that constitute Indebtedness) and (ii) the receipt by
any Group Company of any cash capital contributions, whether or not paid in
connection with any issuance of Equity Interests of any Group Company, from any
Person other than Holdings or a Subsidiary of Holdings.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended, and any rule or regulation issued thereunder.

 

“ERISA Affiliate” means each business or entity
which is under “common control” with a Group Company within the meaning of
Section 4001(a)(14) of ERISA or, for purposes of subsection (viii) of
the definition of “ERISA Event”, the definition of “Plan” and Section
6.08, each business or entity which is a member of a “controlled group of
corporations,” under “common control” or an

 

13

 

“affiliated service
group” with a Group Company within the meaning of Section 414(b), (c) or (m) of
the Code or required to be aggregated with a Group Company under Section 414(o)
of the Code.

 

“ERISA Event” means:

 

(i)            a
reportable event as defined in Section 4043 of ERISA and the regulations issued
under such Section with respect to a Plan, excluding, however, such events as
to which the PBGC by regulation has waived the requirement of Section 4043(a)
of ERISA that it be notified within 30 days of the occurrence of such event;

 

(ii)           the
requirements of Section 4043(b) of ERISA apply with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of any Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of
ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days;

 

(iii)          the
failure to meet the minimum funding standard of Section 412 of the Code with
respect to any Plan (whether or not waived in accordance with Section 412(d) of
the Code), the application for a minimum funding waiver under Section 303 of
ERISA with respect to any Plan, the failure to make by its due date a required
installment under Section 412(m) of the Code with respect to any Plan or the
failure to make any required contribution to a Multiemployer Plan;

 

(iv)          (A) the
incurrence of any material liability by a Group Company pursuant to Title I of
ERISA or to the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in Section 3 of ERISA), or the occurrence or
existence of any event, transaction or condition that could reasonably be
expected to result in the incurrence of any such material liability by a Group
Company pursuant to Title I of ERISA or to such penalty or excise tax
provisions of the Code; or (B) the incurrence of any material liability by a
Group Company or an ERISA Affiliate pursuant to Title IV of ERISA or the
occurrence or existence of any event, transaction or condition that could
reasonably be expected to result in the incurrence of any such material
liability or imposition of any lien on any of the rights, properties or assets
of a Group Company or any ERISA Affiliate pursuant to Title IV of ERISA or to
Section 401(a)(29) or 412 of the Code;

 

(v)           the
provision by the administrator of any Plan of a notice pursuant to Section
4041(a)(2) of ERISA (or the reasonable expectation of such provision of notice)
of intent to terminate such Plan in a distress termination described in Section
4041(c) of ERISA, the institution by the PBGC of proceedings to terminate any
Plan or the occurrence of any event or condition which might constitute grounds
under ERISA for the termination of a Plan by the PBGC, or the appointment of a
trustee by the PBGC to administer any Plan;

 

(vi)          the
withdrawal of a Group Company or ERISA Affiliate in a complete or partial
withdrawal (within the meaning of Section 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential material liability therefor, or
the receipt by a Group Company or ERISA Affiliate of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA;

 

(vii)         the
imposition of material liability (or the reasonable expectation thereof) on a
Group Company or ERISA Affiliate pursuant to Section 4062, 4063, 4064 or 4069
of ERISA or by reason of the application of Section 4212(c) of ERISA;

 

14

 

(viii)        the
assertion of a material claim (other than routine claims for benefits) against
any Plan other than a Multiemployer Plan or the assets thereof, or against a
Group Company or ERISA Affiliate in connection with any Plan;

 

(ix)           the
receipt from the United States Internal Revenue Service of notice of the
failure of any Plan (or any Employee Benefit Arrangement intended to be
qualified under Section 401(a) of the Code) to qualify under Section 401(a) of
the Code, or the failure of any trust forming part of any Plan to qualify for
exemption from taxation under Section 501(a) of the Code, and, with respect to
Multiemployer Plans, notice thereof to any Group Company; and

 

(x)            the establishment
or amendment by a Group Company of any Welfare Plan that provides
post-employment welfare benefits in a manner that would reasonably be expected
to result in a Material Adverse Effect.

 

“Eurodollar Loan” means at any date a Loan
which bears interest at a rate based on the Eurodollar Rate.

 

“Eurodollar Rate” means for any Interest Period
with respect to any Eurodollar Loan:

 

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

 

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

 

(iii)          if
the rates referenced in the preceding clauses (i) and (ii) are
not available, the rate per annum determined by the Administrative Agent as the
rate of interest (rounded upwards to the next 1/16th of 1%) at which deposits
in Dollars for delivery on the first day of such Interest Period in same day
funds in the approximate amount of the Eurodollar Loan being made, continued or
converted by Bank of America, N.A. and with a term equivalent to such Interest
Period as would be offered by Bank of America, N.A.’s London branch to major
banks in the London interbank eurodollar market at their request at
approximately 4:00 P.M. (London time) two Business Days prior to the first day
of such Interest Period.

 

“Eurodollar Reserve Percentage” means for any
day during any Interest Period, the reserve percentage (expressed as a decimal,
carried out to five decimal places) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any other entity succeeding
to the functions currently performed thereby) for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred
to “Eurocurrency liabilities”).  The
Adjusted Eurodollar Rate for each outstanding Eurodollar

 

15

 

Loan shall be adjusted
automatically on and as of the effective date of any change in the Eurodollar
Reserve Percentage.

 

“Event of Default” has the meaning specified in
Section 8.01.

 

“Excess Cash Flow” means for any period an
amount equal to:

 

(i)            Consolidated
EBITDA for such period; plus

 

(ii)           all cash
extraordinary or non-recurring gains and cash gains from discontinued
operations, if any, during such period (whether or not accrued in such period)
and (without duplication) cash gains attributable to Asset Dispositions out of
the ordinary course of business, if any, of Holdings and its Consolidated
Subsidiaries during such period in each case to the extent not otherwise
included in Consolidated EBITDA for such period and not required to be utilized
in connection with a repayment or prepayment of the Loans made or to be made
pursuant to Section 2.09(b)(iii); plus

 

(iii)          (x)
the decrease, if any, in Consolidated Adjusted Working Capital less (y) the
decrease, if any, in the principal amount of Revolving Loans and Swing Line
Loans, in each case from the first day to the last day of such period; plus

 

(iv)          the net
increase in deferred tax accounts from the first day to the last day of such
period (other than that arising by virtue of a reduction in the valuation
allowance for deferred tax assets as set forth in the Audited Financial
Statements); minus

 

(v)           the
amount, if any, which, in the determination of Consolidated EBITDA for such
period, has been included in respect of income or cash gains from Asset
Dispositions of Holdings and its Consolidated Subsidiaries to the extent
utilized to repay or prepay Loans pursuant to Section 2.09(b)(iii);
minus

 

(vi)          the
aggregate amount (without duplication and in each case except to the extent
paid, directly or indirectly, with proceeds of any Equity Issuance or Debt
Issuance (other than Revolving Loans) or with any amount referred to in clause
(iii)(J) of the definition of “Consolidated EBITDA” by any Group Company)
of (A) the sum of (x) cash payments during such period in respect of
Consolidated Capital Expenditures allowed under Section 7.14 plus (y) to
the extent amounts permitted to be paid during such period in respect of
Consolidated Capital Expenditures are carried forward to the next succeeding
period in accordance with Section 7.14(b), the aggregate amounts of all
cash payments (not to exceed such permitted carryforward amount) in respect of
such Consolidated Capital Expenditures made during the first 180 days of such
next succeeding period (it being understood and agreed that any cash payments
in respect of Consolidated Capital Expenditures deducted from Excess Cash Flow
pursuant to this clause (vi)(A)(y) shall not thereafter be deducted
pursuant to clause (vi)(A)(x) above in the determination of Excess Cash
Flow for the period during which such payments were actually paid), (B) cash
payments during such period in respect of (x) Permitted Joint Ventures allowed
under Section 7.06(a)(xii) and (y) Permitted Business Acquisitions, (C)
optional prepayments of the Indebtedness (other than Subordinated Indebtedness)
provided that (x) such prepayments are otherwise permitted hereunder and
(y) if such Indebtedness consists of a revolving line of credit, the
commitments under such line of credit are permanently reduced by the amount of
such prepayment during such period, (D) to the extent not included in clause
(v) above, repayments or prepayments of the Revolving Loans and Swing Line
Loans to the extent the Revolving Commitments and the Swing Line Commitment are
permanently reduced at the time of such

 

16

 

payment, (E)
Consolidated Scheduled Debt Payments actually paid by Holdings and its
Consolidated Subsidiaries during such period, (F) Consolidated Cash Interest
Expense actually paid by Holdings and its Consolidated Subsidiaries during such
period, (G) Consolidated Cash Taxes actually paid by Holdings during such
period (exclusive of any taxes referred to in clause (x) below and
deducted in respect of the determination of Excess Cash Flow for a prior
period), (H) the aggregate amount of all Restricted Payments allowed under Section
7.07(iv), (v) and (vi) actually paid in cash during such period, (I)
Management Fees actually paid in cash during such period, (J) the aggregate
amount of all financial advisory fees, accounting fees, legal fees and other
similar advisory and consulting fees and related out-of-pocket expenses
incurred as a result of the Transaction, any Permitted Business Acquisition or
Permitted Joint Venture, a Qualifying IPO or a Public Debt Issuance and
actually paid in cash by Holdings and its Consolidated Subsidiaries during such
period, in each case to the extent added to Consolidated Net Income in the
determination of Consolidated EBITDA for such period, (K) Transaction related
expenditures (including cash charges arising out of strategic market reviews,
early retirement of Indebtedness, management bonuses, restructuring,
consolidation, severance or discontinuance of any portion of operations,
employees and/or management) described on Schedule 1.01C and actually
paid in cash by Holdings and its Consolidated Subsidiaries during such period,
in each case to the extent added to Consolidated Net Income in the
determination of Consolidated EBITDA for such period, and (L) to the extend
deducted in determining Consolidated Net Income for such period, earn-out
obligations incurred in connection with Permitted Business Acquisitions; minus

 

(vii)         all
cash extraordinary or non-recurring losses and losses from discontinued
operations, if any, during such period (whether or not accrued in such period);
minus

 

(viii)        (x)
the increase, if any, in Consolidated Adjusted Working Capital less (y) the
increase, if any, in the principal amount of Revolving Loans and Swing Line
Loans, in each case from the first day to the last day of such period; minus

 

(ix)           the net
decrease in deferred tax accounts from the first day to the last day of such
period (other than that arising by virtue of a reduction in the deferred tax
accounts attributable to any deferred tax assets that had been previously
subject to the valuation allowance for deferred tax assets as set forth in the Audited
Financial Statements); minus

 

(x)            an amount
equal to the income and withholding taxes (as estimated in good faith by a
senior financial or senior accounting officer of the Borrower giving effect to
the overall tax position of Parent Holdings and its Subsidiaries) payable in
the period following the period for which Excess Cash Flow is determined in
respect of that amount of Excess Cash Flow as is attributable to the actual
repatriation to the Borrower of undistributed earnings of those Subsidiaries of
the Borrower that are “controlled foreign corporations” under Section 957 of
the Code to enable it to prepay the Loans and or Cash Collateralize L/C
Obligations as required under Section 2.09(b)(ii) in respect of Excess
Cash Flow for such period.

 

“Exchange Act” means the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Excluded Asset Disposition” means an Asset
Disposition permitted pursuant to any one or more of clauses (i) through
(xvi) of Section 7.05.

 

“Excluded Equity Issuance” means (i) any
issuance by any Subsidiary of the Borrower of its Equity Interests to the
Borrower or any other Subsidiary of the Borrower, (ii) the receipt by any

 

17

 

Subsidiary of the
Borrower of a capital contribution from the Borrower or a Subsidiary of the
Borrower,  (iii) any Qualifying
Equity Issuance by Parent Holdings, (iv) any issuance of Equity Interests to
qualify directors where required by applicable Law or to satisfy other
requirements of applicable Law with respect to the ownership of Equity
Interests of Foreign Subsidiaries and (v) any issuance of Equity Interests by
Parent Holdings to, or any receipt by Parent Holdings of a capital contribution
from the Sponsor in an aggregate amount not exceeding $30,000,000 from and
after the Closing Date, the Net Cash Proceeds of which are contributed promptly
to the common equity of the Borrower.

 

“Excluded IPO Proceeds” means Net Cash Proceeds
from a Qualifying IPO (determined without reference to the minimum amount
specified in clause (ii) of the definition thereof) to the extent and
only to the extent that at the time of determination (i)(A) no Event of Default
then exists with respect to the Senior Credit Obligations and (B) all of such
Net Cash Proceeds shall have been applied concurrently to repay Second Lien
Loans pursuant to Section 2.09(b)(vii)(C) or (ii) the Leverage Ratio as
of the last day of the fiscal quarter of Holdings ending on or most recently
preceding the date of determination, on a Pro-Forma Basis after giving effect
to any concurrent repayment of Second Lien Loans and Term B Loans, is less than
3.0 to 1.0.

 

“Excluded Public Debt Issuance Proceeds” means
Net Cash Proceeds from a Public Debt Issuance to the extent and only to the
extent that at the time of determination (i) no Event of Default then exists
with respect to the Senior Credit Obligations and (B) all of such Net Cash
Proceeds shall have been applied concurrently to repay Second Lien Loans
pursuant to Section 2.09(b)(vii)(C)

 

“Existing Indebtedness” has the meaning
specified in Section 7.01(i).

 

“Existing Letters of Credit” means the letters
of credit issued before the Closing Date and described by date of issuance,
letter of credit number, undrawn amount, name of beneficiary and date of expiry
on Schedule 2.05 hereto, and “Existing Letter of Credit” means
any one of them.

 

“Facilities Increase” has the meaning specified
in Section 2.10(a).

 

“Facilities Increase Date(s)” has the meaning
specified in Section 2.10(a).

 

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

 

“Federal Funds Rate” means for any day the rate
per annum (rounded upward, if necessary, to a whole multiple of 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided that (i) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (ii) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day shall be
the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of
1%) quoted to Bank of America, N.A. on such day on such transactions as
determined by the Administrative Agent.

 

“Fee Letter” means the letter agreement dated
May 27, 2004 among the Borrower and the Joint Lead Arrangers.

 

“Finance Document” means each Loan Document and
each Swap Agreement between one or more Loan Parties and a Swap Creditor
evidencing Swap Obligations permitted hereunder, and “Finance Documents”
means all of them, collectively.

 

18

 

“Finance Obligations” means, at any date, (i)
all Senior Credit Obligations, (ii) all Second Lien Obligations, (iii) all Cash
Management Obligations owing to a Senior Lender or one or more of its
Affiliates and (iv) all Swap Obligations of a Loan Party permitted hereunder
owed or owing to any Swap Creditor.

 

“Finance Party” means each Senior Credit Party,
each Second Lien Credit Party and each Swap Creditor and their respective
successors and assigns, and “Finance Parties” means any two or more of
them, collectively.

 

“Fixed Charge Coverage Ratio” means, for any
period, the ratio of (i) Consolidated EBITDA less the aggregate amount of
Consolidated Capital Expenditures for such period (exclusive of the portion
thereof financed with (A) any Debt Issuance, (B) any Qualifying Equity Issuance
or (C) the Net Cash Proceeds of Asset Dispositions or from Casualties or
Condemnations received during such period that are not required to be applied
to repay Loans or cash collateralize L/C Obligations pursuant to Section
2.09(b)(vii)) less Consolidated Cash Taxes to (ii) Consolidated Fixed
Charges for such period.

 

“Foothill Refinancing” means the termination of
the commitments under the Loan and Security Agreement dated as of July 1, 2002
(as amended, restated, supplemented, or otherwise modified through the Closing
Date) among Foothill Capital Corporation, as Arranger and Administrative Agent,
the Borrower and the lenders party thereto from time to time, and the repayment
in full of all obligations owing by the Borrower thereunder.

 

“Foreign Cash Equivalents” means:

 

(i)            securities
issued or fully guaranteed by the United Kingdom or any instrumentality thereof
(as long as that the full faith and credit of the United Kingdom is pledged in
support of those securities);

 

(ii)           certificates
of deposit, eurodollar time deposits, overnight bank deposits and bankers’
acceptances of any foreign bank, or its branches or agencies (fully protected
against currency fluctuations) that, at the time of acquisition, are rated at
least “A-I” by S&P or “P-I” by Moody’s, and (ii) certificates of deposit,
eurodollar time deposits, banker’s acceptances and overnight bank deposits, in
each case of any non-U.S. commercial bank having capital and surplus in excess
of $500,000,000 and a Thomson BankWatch Rating of at least “B”;

 

(iii)          repurchase
obligations with a term of not more than seven days with respect to securities
of the types described in clause (i) or (ii) with a bank or trust
company (including any of the Lenders) or recognized securities dealer having
capital and surplus in excess of $500,000,000 in which the Borrower or one or
more of its Subsidiaries shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the repurchase
obligations; and

 

(iv)          investments,
classified in accordance with GAAP as current assets, in shares of any money
market fund that has at least 95% of its assets invested continuously in the
types of investments referred to in clauses (i) through (iii)
above which are administered by reputable financial institutions having capital
of at least $500,000,000; provided, however, that the maturities
of all obligations of the type specified in clauses (i) through (iii)
above shall not exceed the lesser of the time specified in such clauses.

 

“Foreign IP Holdco” means a direct Foreign
Subsidiary of US IP Holdco (i) that is incorporated in The Cayman Islands or
any other foreign jurisdiction selected by the Borrower, subject to

 

19

 

the approval of the
Administrative Agent, not to be unreasonably withheld, (ii) 65% of the Equity
Interests of which shall be pledged by US IP Holdco to the Collateral Agents as
security for the Senior Obligations and the Second Lien Obligations,
respectively, under the Pledge Agreements and (iii) the Organization Documents
of which and the Laws of the jurisdiction of organization and other applicable
Law do not prevent (A) US IP Holdco from granting the Requisite Priority Liens
to the Collateral Agents on 65% of the Equity Interests of such Foreign IP
Holdco or (B) foreclosure under such Requisite Priority Liens or any other
exercise of remedies substantially similar or having benefits substantially
similar to the remedies set forth in the Pledge Agreements in respect of
capital stock pledged to the Collateral Agents.

 

“Foreign IP Transfer Transaction” means: (i)
the formation of US IP Holdco and the transfer to it of 100% of the Equity
Interests in all Foreign IP Holdcos; (ii) the entering into of a Research and
Development Cost Sharing Agreement; (iii) (A) the transfer to one or more
Foreign IP Holdcos of the shares of any Foreign Subsidiary of a Loan Party, (B)
subject to the limitations described herein, (x) an exclusive (subject to
existing licenses granted) license to Foreign IP Holdcos of Intellectual
Property to the extent registered in any jurisdiction other than the United
States or any State thereof or the District of Columbia or other specified
jurisdictions (the United States, any State thereof, the District of Columbia
and such other specified jurisdictions being herein collectively referred to as
the “Retained Jurisdictions”), (y) an exclusive (subject to existing
licenses granted) license of any other Intellectual Property which is necessary
to manufacture, use, market, license or sell and distribute products outside of
the Retained Jurisdictions or (z) a non-exclusive and partial granting
of rights under existing manufacturing and distribution contracts only to the
extent related to the manufacture, distribution and sale of products sold
outside of the Retained Jurisdictions; provided, that in each
case referred to in this clause (iii), (1) no license to any
Intellectual Property or related rights referred to herein shall be granted to
any Foreign IP Holdco of Intellectual Property or related rights registered or
used in or otherwise related to the development, marketing, manufacturing,
packaging, handling, distribution, license or sale of products sold within the Retained
Jurisdictions, and (2) the license of the foregoing Intellectual Property
referred to in clause (iii) shall be limited to use of such Intellectual
Property outside of the Retained Jurisdictions and only in connection
with the manufacture, use, marketing, licensing or sale and distribution of
products outside of the Retained Jurisdictions; and (iv) a non-exclusive
license from Foreign IP Holdcos to one or more Loan Parties of the rights
licensed in clause (iii) above to meet business contingencies or
otherwise fulfill any existing obligations.

 

“Foreign Lender” has the meaning specified in Section
10.15(a)(i).

 

“Foreign Pension Plan” means any material plan,
fund (including, without limitation, any superannuation fund) or other similar
program established or maintained outside the United States by any Group
Company primarily for the benefit of employees of any Group Company residing
outside the United States, 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” means with respect to any
Person any Subsidiary of such Person that is not a Domestic Subsidiary of such
Person.

 

“Funded Indebtedness” means, with respect to
any Person and without duplication, (i) all Indebtedness of such Person of the
types referred to in clauses (i), (ii), (iii), (iv),
(v), (vi), and (vii) of the definition of “Indebtedness”
in this Section 1.01, (ii) all Indebtedness of others of the type
referred to in clause (i) above secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) a Lien on, or payable out of the proceeds of production from, any property
or asset of such Person, whether or not the obligations secured thereby have
been assumed by such Person, (iii) all Guaranty Obligations of such Person with
respect to Indebtedness of others of the type

 

20

 

referred to in clause
(i) above and (iv) all Indebtedness of the type referred to in clause
(i) above of any other Person (including any Partnership in which such
Person is a general partner and any unincorporated joint venture in which such
Person is a joint venturer) to the extent such Person would be liable therefor
under any applicable law or any agreement or instrument by virtue of such
Person’s ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide that such Person shall not
be liable therefor.

 

“GAAP” means generally accepted accounting
principles in the United States set forth in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant
segment of the accounting profession in the United States, that are applicable
to the circumstances as of the date of determination, consistently applied.

 

“Government Acts” has the meaning specified in Section
2.05(n)(i).

 

“Governmental Authority” means any nation or
government, any state or other political subdivision thereof, any agency,
authority, instrumentality, regulatory body, court, administrative tribunal,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

 

“Group Company” means any of Holdings, the
Borrower or their respective Subsidiaries (regardless of whether or not
consolidated with Holdings or the Borrower for purposes of GAAP), and “Group
Companies” means all of them, collectively.

 

“Group” means at any time a group of Loans
consisting of (i) all Loans which are Base Rate Loans at such time or (ii) all
Loans which are Eurodollar Loans having the same Interest Period at such time; provided
that, if a Loan of any particular Lender is converted to or made as a Base Rate
Loan pursuant to Article III, such Loan shall be included in the same
Group or Group of Loans from time to time as it would have been had it not been
so converted or made.

 

“Guaranty” means the Guaranty, substantially in
the form of Exhibit F hereto, by Parent Holdings, Holdings and the
Subsidiary Guarantors in favor of the Administrative Agent, as the same may be
amended, modified or supplemented from time to time.

 

“Guaranty Obligation” means, with respect to
any Person, without duplication, any obligation (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guarantying, intended to guaranty, or having the economic effect of
guarantying, any Indebtedness of any other Person in any manner, whether direct
or indirect, and including, without limitation, any obligation, whether or not
contingent, (i) to purchase any such Indebtedness or any property constituting
security therefor, (ii) to advance or provide funds or other support for the
payment or purchase of such Indebtedness or obligation or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including, without limitation, maintenance agreements, support agreements,
comfort letters, take or pay arrangements, put agreements or similar agreements
or arrangements) for the benefit of the holder of Indebtedness of such other
Person, (iii) to lease or purchase property, securities or services primarily
for the purpose of assuring the owner of such Indebtedness or (iv) to otherwise
assure or hold harmless the owner of such Indebtedness against loss in respect
thereof.  The amount of any Guaranty
Obligation hereunder shall (subject to any limitations set forth therein) be
deemed to be an amount equal to the outstanding principal amount (or maximum
principal amount, if larger) of the Indebtedness in respect of which such
Guaranty Obligation is made.

 

21

 

“Hazardous Materials” means all explosive or
radioactive substances or wastes and all hazardous or toxic substances, wastes
or other pollutants or environmental contaminants, including petroleum or
petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas and all other substances or wastes
regulated pursuant to any Environment Law because of their hazardous or
deleterious properties.

 

“Holdings” means VeriFone Intermediate
Holdings, Inc., a Delaware corporation, and its successors.

 

“Honor Date” has the meaning specified in Section
2.05(f).

 

“Indebtedness” means, as to any Person at a
particular time, without duplication, all of the following, whether or not
included as indebtedness or liabilities in accordance with GAAP: (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person to the
extent of the value of such property (other than customary reservations or
retentions of title under agreements with suppliers entered into in the
ordinary course of business), (iv) all obligations, other than intercompany
items, of such Person to pay the deferred purchase price of property or
services (other than trade accounts payable and accrued expenses arising in the
ordinary course of business and due within six months of the incurrence
thereof), (v) the Attributable Indebtedness of such Person in respect of
Capital Lease Obligations and Synthetic Lease Obligations (regardless of
whether accounted for as indebtedness under GAAP), (vi) all obligations of such
Person to purchase securities or other property which arise out of or in
connection with the sale of the same or substantially similar securities or
property, (vii) all obligations, contingent or otherwise, of such Person to
reimburse any bank or other Person in respect of amounts paid under a letter of
credit, bankers’ acceptance or similar instrument, (viii) all Indebtedness of
others secured by (or for which the holder of such obligations has an existing
right, contingent or otherwise, to be secured by) a Lien on, or payable out of
the proceeds of production from, any property or asset of such Person, whether
or not such obligation is assumed by such Person; provided that the
amount of any Indebtedness of others that constitutes Indebtedness of such
Person solely by reason of this clause (viii) shall not for purposes of
this Agreement exceed the greater of the book value or the fair market value of
the properties or assets subject to such Lien, (ix) all Guaranty Obligations of
such Person, (x) all Debt Equivalents of such Person and (xii) the Indebtedness
of any other Person (including any partnership in which such Person is a
general partner and any unincorporated joint venture in which such Person is a
joint venturer) to the extent such Person would be liable therefor under
applicable Law or any agreement or instrument by virtue of such Person’s
ownership interest in or other relationship with such entity, except to the
extent the terms of such Indebtedness provide that such person shall not be
liable therefor; provided that (i) Indebtedness shall not include (A)
deferred compensation arrangements, (B) earn-out obligations until matured or
earned or (C) non-compete or consulting obligations incurred in connection with
Permitted Business Acquisitions and (ii) the amount of any Limited Recourse
Indebtedness of any Person shall be equal to the lesser of (A) the aggregate
principal amount of such Limited Recourse Indebtedness for which such Person
provides credit support of any kind (including any undertaking agreement or
instrument that would constitute Indebtedness), is directly or indirectly
liable as a guarantor or otherwise or is the lender and (B) the fair market value
of any assets securing such Indebtedness or to which such Indebtedness is
otherwise recourse.

 

“Indemnified Liabilities” has the meaning
specified in Section 10.05.

 

“Indemnitees” has the meaning specified in Section
10.05.

 

22

 

“Insurance Proceeds” means all cash insurance
proceeds (other than business interruption insurance proceeds with respect to
any Casualty.

 

“Intellectual Property” has the meaning set
forth in the Security Agreements.

 

“Intercompany Note” means a promissory note
contemplated by Section 7.06(a)(x) or (xi), substantially in the
form of Exhibit H hereto, and “Intercompany Notes” means any two
or more of them.

 

“Intercreditor Agreement” means the
Intercreditor Agreement, substantially in the form of Exhibit M hereto,
dated as of the date hereof among the Administrative Agent, the Senior
Collateral Agent, the Second Lien Collateral Agent, Parent Holdings, Holdings
and the Borrower, as the same may be amended, modified or supplemented from time
to time.

 

“Interest Payment Date” means (i) as to Base
Rate Loans, the last Business Day of each fiscal quarter of the Borrower and
the Maturity Date for Loans of the applicable Class and (ii) as to Eurodollar
Loans, the last day of each applicable Interest Period and the Maturity Date
for Loans of the applicable Class, and in addition where the applicable
Interest Period for a Eurodollar Loan is greater than three months, then also
the respective dates that fall every three months after the beginning of such
Interest Period.

 

“Interest Period” means with respect to each
Eurodollar Loan, a period commencing on the date of borrowing specified in the
applicable Notice of Borrowing or on the date specified in the applicable
Notice of Extension/Conversion and ending one, two, three, six (or if deposits
of such duration are available to all of the Lenders having Commitments or
Loans of the applicable Class, nine or twelve) months thereafter, as the
Borrower may elect in the applicable notice; provided that:

 

(i)            any
Interest Period which would otherwise end on a day which is not a Business Day
shall, subject to clause (v) below, be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;

 

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

 

(iii)          no
Interest Period in respect of Term Loans may be selected which extends beyond a
Principal Amortization Payment Date for Loans of the applicable Class unless,
after giving effect to the selection of such Interest Period, the aggregate
principal amount of Term Loans of the applicable Class which are comprised of
Base Rate Loans together with such Term Loans comprised of Eurodollar Loans
with Interest Periods expiring on or prior to such Principal Amortization
Payment Date are at least equal to the aggregate principal amount of Term Loans
of the applicable Class due on such date;

 

(iv)          if so
provided in written notice to the Borrower by the Administrative Agent at the
direction of the Required Lenders, no Interest Period may be selected at any
time when a Default or an Event of Default is then in existence; and

 

(v)           no
Interest Period may be selected which would end after the Maturity Date for
Loans of the applicable Class.

 

23

 

“Investment” in any Person means (i) the
acquisition (whether for cash, property, services, assumption of Indebtedness,
securities or otherwise) of assets (other than inventory, machinery, equipment
and other assets in the ordinary course of business), Equity Interests, Equity
Equivalents, Debt Equivalents, Indebtedness or other securities of such Person,
(ii) any deposit with, or advance, loan or other extension of credit to or for
the benefit of such Person (other than deposits made in connection with the
purchase of equipment, inventory or services in the ordinary course of
business) or (iii) any other capital contribution to or investment in such
Person, including by way of Guaranty Obligations of any obligation of such Person,
any support for a letter of credit issued on behalf of such Person incurred for
the benefit of such Person or in the case of any Subsidiary of the Borrower,
any release, cancellation, compromise or forgiveness in whole or in part of any
Indebtedness owing by such Person.  The
outstanding amount of any Investment shall be deemed to equal the difference of
(i) the aggregate initial amount of such Investment less (ii) all
returns of principal thereof or capital with respect thereto and all
liabilities expressly assumed by another Person (and with respect to which
Holdings and its Subsidiaries, as applicable, shall have received a novation)
in connection with the sale of such Investment.

 

“Investor Group” means the Sponsor Group and
certain other members of management of the Borrower identified to and approved
by the Administrative Agent prior to the Closing Date.

 

“ISP” means, with respect to any Letter of
Credit, the “International Standby Practices 1998” published by the Institute
of International Banking Law & Practice (or such later version thereof as
may be in effect at the time of issuance).

 

“Joint Lead Arrangers” means Banc of America
Securities LLC and Credit Suisse First Boston, acting through its Cayman
Islands Branch.

 

“Law” means, collectively, all international,
foreign, Federal, state and local statutes, treaties, rules, guidelines,
regulations, ordinances, codes and administrative or judicial precedents or
authorities, including the interpretation or administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directives,
requests, licenses, authorizations and permits of, and agreements with, any
Governmental Authority, in each case whether or not having the force of Law.

 

“L/C Borrowing” means a Revolving Borrowing
made pursuant to Section 2.05(f)(iv) and (v) to refinance
Unreimbursed Amounts in respect of drawn Letters of Credit.

 

“L/C Cash Collateral Account” has the meaning
specified in the Security Agreement.

 

“L/C Commitment” means the commitment of one or
more L/C Issuers to issue Letters of Credit in an aggregate face amount at any
one time outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the L/C Sublimit.

 

“L/C Disbursement” means a payment or
disbursement made by an L/C Issuer pursuant to a Letter of Credit.

 

“L/C Documents” means, with respect to any
Letter of Credit, such Letter of Credit, any amendments thereto, any L/C
Documents and other documents delivered in connection therewith, any
application therefor and any agreements, instruments, Guaranties or other
documents (whether general in application to Letters of Credit generally or
applicable only to such Letter of Credit) governing or providing for (i) the
rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.

 

24

 

“L/C Issuer” means (i) Bank of America, N.A. in
its capacity as issuer of Letters of Credit under Section 2.05(b), and
its permitted successor or successors in such capacity, (ii) each Lender listed
in Schedule 2.05 hereto as the issuer of an Existing Letter of Credit
and (iii) any other Lender which the Borrower shall have designated as an “L/C
Issuer” by notice to the Administrative Agent.

 

“L/C Obligations” means at any time, the sum of
(i) the maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding, assuming
compliance with all requirements for drawings referred to in such Letters of
Credit plus (ii) the aggregate amount of all L/C Disbursements not yet
reimbursed by the Borrower as provided in Section 2.05(f)(ii), (iii), (iv)
or (v) to the applicable L/C Issuers in respect of drawings under Letters
of Credit, including any portion of any such obligation to which a Lender has
become subrogated pursuant to Section 2.05(f)(vi).  For all purposes of this Agreement and all
other Loan Documents, if on any date of determination a Letter of Credit has
expired by its terms by any amount may still be drawn thereunder by reason of
the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to
be “outstanding” in the amount so remaining available to be drawn.

 

“L/C Sublimit” means an amount equal to
$10,000,000.  The L/C Sublimit is a part
of, and not in addition to, the Revolving Committed Amount.

 

“Leaseholds” means with respect to any Person
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” means each Senior Lender and each
Second Lien Lender and their respective successors and shall include, as the
context may require, the Swing Line Lender in such capacity and each L/C Issuer
in such capacity.

 

“Letter of Credit” means an Existing Letter of
Credit or an Additional Letter of Credit, and “Letters of Credit” means
any combination of the foregoing.

 

“Letter of Credit Expiration Date” means the
day that is seven days prior to the Revolving Termination Date then in effect
(or, if such day is not a Business Day, the next preceding Business Day).

 

“Letter of Credit Request” has the meaning
specified in Section 2.05(c).

 

“Leverage Ratio” means on any day the ratio of
(i) Consolidated Funded Indebtedness as of the last day of the fiscal quarter
of Holdings ending on, or most recently preceding, such date to (ii)
Consolidated EBITDA for the four consecutive fiscal quarters of Holdings ended
on, or most recently preceding, such day.

 

“Lien” means, with respect to any asset, any
mortgage, pledge, hypothecation, assignment, deposit arrangement, lien
(statutory or other) or other security interest or preferential arrangement in
the nature of a security interest of any kind or nature whatsoever (including
any conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the Uniform Commercial Code or
comparable Laws of any jurisdiction). 
Solely for the avoidance of doubt, the filing of a Uniform Commercial
Code financing statement that is a protective lease filing in respect of an
Operating Lease that does not constitute a security interest in the leased
property or otherwise give rise to a Lien does not constitute a Lien solely on
account of being filed in a public office.

 

25

 

“Limited Recourse Indebtedness” means, with
respect to any Person, Indebtedness to the extent:  (i) such Person (A) provides no credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness), (B) is not directly or indirectly liable as a
guarantor or otherwise or (C) does not constitute the lender; and (ii) no
default with respect thereto would permit upon notice, lapse of time or both
any holder of any other Indebtedness (other than the Loans or the Notes) of
such Person to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity.

 

“Loan” means a Revolving Loan, a Term B Loan, a
Second Lien Loan or a Swing Line Loan (or a portion of any Revolving Loans,
Term B Loans, Second Lien Loans or Swing Line Loans), individually or
collectively as appropriate; provided that, if any such loan or loans
(or portions thereof) are combined or subdivided pursuant to a Notice of
Extension/Conversion, the term “Loan” shall refer to the combined
principal amount resulting from such combination or to each of the separate
principal amounts resulting from such subdivision, as the case may be.

 

“Loan Documents” means, collectively, this
Agreement, the Notes, the Guaranty, the Collateral Documents, each Perfection
Certificate, the Intercreditor Agreement, the Intercompany Notes, each
Accession Agreement and each L/C Document, in each case as the same may be
amended, modified or supplemented from time to time, and all other related
agreements, certificates and documents executed by a Loan Party and delivered
to any Senior Credit Party or Second Lien Credit Party in connection with or
pursuant to any of the foregoing.

 

“Loan Party” means each of Parent Holdings,
Holdings, the Borrower and each Subsidiary Guarantor, and “Loan Parties”
means any combination of the foregoing.

 

“Management Agreement” means the Professional
Services Agreement dated as of July 1, 2002 between the Borrower and GTCR
Golder Rauner, L.L.C., as the same may be amended, modified or supplemented
from time to time in accordance with the terms thereof and of this Agreement.

 

“Management Fee” means each of the following
fees payable by the Borrower to GTCR Golder Rauner, L.L.C.: (i) a management
fee in an amount not to exceed $250,000 in each fiscal year, (ii) one-time
fees, each payable on the date of the consummation of certain equity and debt
financings described in the Management Agreement in an amount not to exceed 1%
of the gross amount (or, in the case of revolving facilities, the maximum
committed amount) of such financings received by (or made available to) the
Loan Parties and (iii) indemnities and reimbursement of reasonable
out-of-pocket fees and expenses, in each case pursuant to, and subject to the
terms and conditions of, the Management Agreement (as disclosed to the
Administrative Agent on the Closing Date).

 

“Margin Stock” means “margin stock” as such
term is defined in Regulation U.

 

“Material Adverse Effect” means (i) any
material adverse effect upon the business, assets, liabilities (actual or
contingent), operations, properties or condition (financial or otherwise) of
the Holdings and its subsidiaries, taken as a whole, (ii) a material adverse
effect on the ability of a Loan Party to consummate the transactions
contemplated hereby to occur on the Closing Date, (iii) a material impairment
of the ability of any Loan Party to perform any of its material obligations
under any Loan Document to which it is a party or (iv) a material impairment of
the rights and benefits of the Lenders under the Loan Documents, taken as a
whole.

 

“Maturity Date” means (i) as to Revolving Loans
and Swing Line Loans, the Revolving Termination Date, (ii) as to Term B Loans,
the Term B Maturity Date and (iii) as to Second Lien Loans, the Second Lien
Maturity Date.

 

26

 

“Mezzanine Debt Refinancing” means the
termination of the commitments under the Senior Subordinated Loan Agreement
dated as of July 1, 2002 (as amended, restated, supplemented, or otherwise
modified through the Closing Date) among the Borrower, GTCR Capital Partners,
L.P., TCW/Crescent Mezzanine Partners III, L.P., TCW Crescent Mezzanine Trust
III, TCW Leveraged Income Trust IV, L.P. and TCW/Crescent Mezzanine Partners
III Netherlands, L.P., and the repayment in full of all obligations owing by
the Borrower thereunder.

 

“Moody’s” means Moody’s Investors Service,
Inc., a Delaware corporation, and its successors or, absent any such successor,
such nationally recognized statistical rating organization as the Borrower and
the Administrative Agent may select.

 

“Multiemployer Plan” means a “multiemployer
plan” as defined in Section 3(37) or 4001(a)(3) of ERISA.

 

“Net Cash Proceeds” means:

 

(i)            with
respect to any Asset Disposition (other than an Asset Disposition consisting of
a lease where one or more Group Companies is acting as lessor entered into in
the ordinary course of business), Casualty or Condemnation, (A) the gross
amount of all cash proceeds (including cash Insurance Proceeds and cash
Condemnation Awards in the case of any Casualty or Condemnation, except to the
extent and for so long as such Insurance Proceeds or Condemnation Awards
constitute Reinvestment Funds) actually paid to or actually received by any
Group Company in respect of such Asset Disposition, Casualty or Condemnation
(including any cash proceeds received as income or other proceeds of any
noncash proceeds of any Asset Disposition, Casualty or Condemnation as and when
received), less (B) the sum of (1) the amount, if any, of all taxes (other than
income taxes) and all income taxes (as estimated in good faith by a senior
financial or senior accounting officer of the Borrower giving effect to the
overall tax position of Parent Holdings and its Subsidiaries), and customary
fees, legal fees, brokerage fees, commissions, costs and other expenses (other
than those payable to any Group Company or to Affiliates of any Group Company
except for (x) those payable pursuant to the Management Agreement as in effect
on the Closing Date or (y) those payable on terms and conditions as favorable
to the applicable Group Company as would be obtainable by it in a comparable
arms’-length transaction with an independent, unrelated third party) that are
incurred in connection with such Asset Disposition, Casualty or Condemnation
and are payable by any Group Company, but only to the extent not already
deducted in arriving at the amount referred to in clause (i)(A) above,
(2) appropriate amounts that must be set aside as a reserve in accordance with
GAAP against any indemnities, 
liabilities (contingent or otherwise) associated with such Asset
Disposition, Casualty or Condemnation, (3) if applicable, the amount of any
Indebtedness secured by a Permitted Lien that has been repaid or refinanced in
accordance with its terms with the proceeds of such Asset Disposition, Casualty
or Condemnation; and (4) any payments to be made by any Group Company as agreed
between such Group Company and the purchaser of any assets subject to an Asset
Disposition, Casualty or Condemnation in connection therewith; and

 

(ii)           with
respect to any Equity Issuance or Debt Issuance, the gross amount of cash
proceeds paid to or received by any Group Company in respect of such Equity
Issuance or Debt Issuance as the case may be (including cash proceeds subsequently
as and when received at any time in respect of such Equity Issuance or Debt
Issuance from non-cash consideration initially received or otherwise), net of
underwriting discounts and commissions or placement fees, investment banking
fees, legal fees, consulting fees, accounting fees and other customary fees and
expenses directly incurred by any Group Company in connection therewith (other
than those payable to any Group Company or any Affiliate of any Group Company
except for (x) those

 

27

 

payable pursuant
to the Management Agreement as in effect on the Closing Date or (y) those
payable on terms and conditions as favorable to the applicable Group Company as
would be obtainable by it in a comparable arms’-length transaction with an
independent, unrelated third party).

 

“Note” means a Revolving Note, a Term B Note, a
Second Lien Note or a Swing Line Note, and “Notes” means any combination
of the foregoing.

 

“Notice of Borrowing” means a request by the Borrower
for a Borrowing, substantially in the form of Exhibit A-1 hereto.

 

“Notice of Extension/Conversion” has the
meaning specified in Section 2.07.

 

“Operating Lease” means, as applied to any
Person, a lease (including leases which may be terminated by the lessee at any
time) of any property (whether real, personal or mixed) by such Person as
lessee which is not a Capital Lease.

 

“Organization Documents” means (i) with respect
to any corporation, the certificate or articles of incorporation and the bylaws
(or equivalent or comparable constitutive documents with respect to any
non-U.S. jurisdiction); (ii) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement;
and (iii) with respect to any partnership, joint venture, trust or other form
of business entity, the partnership, joint venture or other applicable
agreement of formation or organization and any agreement, instrument, filing or
notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles
of formation or organization of such entity.

 

“Other Taxes” has the meaning specified in Section
3.01.

 

“paid in full” and “payment in full”
means, with respect to any Finance Obligation, the occurrence of all of the
foregoing:  (i) with respect to such
Finance Obligations other than (A) contingent indemnification obligations, Swap
Obligations and Cash Management Obligations not then due and payable and (B) to
the extent covered by clause (ii) below, obligations with respect to
undrawn Letters of Credit, payment in full thereof in cash (or otherwise to the
written satisfaction of the Finance Parties owed such Finance Obligations),
(ii) with respect to any undrawn Letter of Credit, the obligations under which
are included in such Finance Obligations, (A) the cancellation thereof and
payment in full of all resulting Finance Obligations pursuant to clause (i)
above or (B) the receipt of cash collateral (or a backstop letter of credit in
respect thereof on terms acceptable to the applicable L/C Issuer and the
Administrative Agent) in an amount at least equal to 102% of the L/C
Obligations for such Letter of Credit and (iii) if such Finance Obligations
consist of all the Credit Obligations under or in respect of the Revolving
Commitments, the Term B Commitments or the Second Lien Commitments, termination
of all Commitments and all other obligations of the Lenders in respect of such
Commitments under the Loan Documents.

 

“Parent Holdings” means VeriFone Holdings,
Inc., a Delaware corporation, and its successors.

 

“Participation Interest” means a Credit
Extension by a Lender by way of a purchase of a participation interest in
Letters of Credit or L/C Obligations as provided in Section 2.05(a) or (e),
in Swing Line Loans as provided in Section 2.01(d)(vi) or in any Loans
as provided in Section 2.13.

 

28

 

“PBGC” means the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA or any
entity succeeding to any or all of its functions under ERISA.

 

“Perfection Certificate” means with respect to
any Loan Party a certificate, substantially in the form of Exhibit G-3
to this Agreement, completed and supplemented with the schedules and
attachments contemplated thereby to the satisfaction of the Collateral Agents
and duly executed by the chief executive officer and the chief legal officer of
such Loan Party.

 

“Permit” means any license, permit, franchise,
right or privilege, certificate of authority or order, or any waiver of the
foregoing, issued or issuable by any Governmental Authority.

 

“Permitted Business Acquisition” means a
Business Acquisition; provided that:

 

(i)            the
Equity Interests or property or assets acquired in such acquisition relate to a
line of business similar to the business of the Borrower or any of its
Subsidiaries engaged in on the Closing Date or reasonably related, ancillary or
complementary thereto;

 

(ii)           the
representations and warranties made by the Loan Parties in each Loan Document
shall be true and correct in all material respects at and as of the date of
such acquisition (as if made on such date after giving effect to such
acquisition), except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct in all material respects at and as of such
earlier date);

 

(iii)          the
Administrative Agent or the Applicable Collateral Agent, as applicable, shall
have received all items in respect of the Equity Interests or property or
assets acquired in such acquisition (and/or the seller thereof) required to be
delivered by Section 6.12;

 

(iv)          in the case
of an acquisition of the Equity Interests of another Person, (A) except in the
case of the incorporation of a new Subsidiary, the board of directors (or other
comparable governing body) of such other Person shall have duly approved such
acquisition and (B) the Equity Interests acquired shall constitute 100% of the
total Equity Interests of the issuer thereof;

 

(v)           no Event
of Default shall have occurred and be continuing immediately before or
immediately after giving effect to such acquisition, and the Borrower shall
have delivered to the Administrative Agent a Pro-Forma Compliance Certificate
demonstrating that, upon giving effect to such acquisition on a Pro-Forma
Basis, the Borrower shall be in compliance with all of the financial covenants
specified in Section 7.17 hereof as of the last day of the most recent
period of four consecutive fiscal quarters of the Borrower which precedes or
ends on the date of such acquisition;

 

(vi)          after
giving effect to such acquisition, the Revolving Committed Amount shall be at
least $10,000,000 greater than the total Revolving Outstandings; and

 

(vii)         the
aggregate consideration (including cash, earn-out payments, assumption of
indebtedness and non-cash consideration but excluding any “rollover” Equity
Interests (other than Debt Equivalents) issued to the seller of the Equity
Interests, property or assets acquired in such acquisition) for all such
acquisitions occurring after the Closing Date, to the extent not funded with
one or more Qualifying Equity Issuances, shall not exceed the

 

29

 

Applicable Basket
Amount in any fiscal year or the Applicable Basket Amount in the aggregate from
and after the Closing Date;

 

and provided, further, that the term “Permitted
Business Acquisition” shall include a Business Acquisition not otherwise
meeting the requirements of the foregoing definition the terms and provisions
of which have been approved by the Required Lenders.

 

“Permitted Joint Venture” means a joint
venture, in the form of a corporation, limited liability company, business
trust, joint venture, association, company or partnership, entered into by the
Borrower or any of its Subsidiaries which (i) is engaged in a line of business
related, ancillary or complementary to those engaged in by the Borrower and its
Subsidiaries and (ii) is formed or organized in a manner that limits the
exposure of the Borrower and its Subsidiaries for the liabilities thereof to
(A) the Investments of the Borrower and its Subsidiaries therein permitted
under Section 7.06(a)(xii) and (B) any Indebtedness of any Permitted
Joint Venture or any Guaranty Obligations by the Borrower or any of its
Subsidiaries in respect of such Indebtedness, which Indebtedness or Guaranty
Obligations are permitted at the time under Section 7.01.

 

“Permitted Liens” has the meaning specified in Section
7.02.

 

“Permitted Refinancing” means, with respect to
any Person, any modification, refinancing, refunding, renewal or extension of
any Indebtedness of such Person; provided that (i) the principal amount
(or accreted value, if applicable) thereof does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness so modified, refinanced,
refunded, renewed or extended except by an amount equal to a reasonable premium
or other reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such modification, refinancing, refunding, renewal or extension
and by an amount equal to any existing commitments unutilized thereunder or as
otherwise permitted pursuant to Section 7.01, (ii) such modification,
refinancing, refunding, renewal or extension has a final maturity date equal to
or later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being modified, refinanced, refunded, renewed or extended, (iii)
if the Indebtedness being modified, refinanced, refunded, renewed or extended
is subordinated in right of payment to the any Credit Obligation, such
modification, refinancing, refunding, renewal or extension is subordinated in
right of payment to the applicable Credit Obligations on terms at least as
favorable to the applicable Lenders as those contained in the documentation
governing the Indebtedness being modified, refinanced, refunded, renewed or
extended, (iv) the terms and conditions (including, if applicable, as to
collateral) of any such modified, refinanced, refunded, renewed or extended Indebtedness
are not materially less favorable to the Loan Parties or the Lenders than the
terms and conditions of the Indebtedness being modified, refinanced, refunded,
renewed or extended, (v) such modification, refinancing, refunding, renewal or
extension is incurred by the Person who is the obligor on the Indebtedness
being modified, refinanced, refunded, renewed or extended, and (vi) at the time
thereof, no Event of Default shall have occurred and be continuing.

 

“Person” means any natural person, corporation,
limited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.

 

“Plan” means an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code maintained by or contributed to by any
Group Company or any ERISA Affiliate including a Multiemployer Plan.

 

“Pledge Agreement”  means the Senior Pledge Agreement or the
Second Lien Pledge Agreement, and “Pledge Agreements” means both of
them, collectively.

 

30

 

“Pledged Collateral” has the meaning specified
in the Pledge Agreements.

 

“Pre-Commitment Information” means, taken as an
entirety, the information with respect to the Borrower and its Subsidiaries
contained in the Confidential Information Memorandum dated June 2004.

 

“Preferred Stock” means, as applied to the
Equity Interests of a Person, Equity Interests of any class or classes (however
designated) which is preferred as to the payment of dividends or distributions,
or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Person, over the Equity Interests of any
other class of such Person.

 

“Preferred Stock Redemption” means the
redemption by Parent Holdings of all shares of its Preferred Stock outstanding
on the Closing Date.

 

“Prepayment Account” has the meaning specified
in Section 2.09(b)(ix).

 

“Proceeds” has the meaning specified for such
term in the Uniform Commercial Code as in effect from time to time in the State
of New York.

 

“Principal Amortization Payment” means a
scheduled principal payment on the Term B Loans pursuant to Section 2.08(b).

 

“Principal Amortization Payment Date” means (i)
with respect to the Term B Loans and the Second Lien Loans, as applicable, the
last Business Day of each calendar quarter, commencing with the first such date
occurring at least 90 days after the Closing Date, and ending prior to the
later of the Term B Maturity Date and the Second Lien Maturity Date,
(ii) the Term B Maturity Date or (iii) the Second Lien Maturity Date.

 

“Pro-Forma Basis” means, for purposes of
calculating compliance of any transaction with any provision hereof, that the
transaction in question shall be deemed to have occurred as of the first day of
the most recent period of four consecutive fiscal quarters of the Borrower
which most recently precedes or ends on the date of such transaction and with
respect to which the Administrative Agent has received the financial information
for Holdings and its Consolidated Subsidiaries required under Section
6.01(a) or (b), as applicable, and the Compliance Certificate
required by Section 6.02(b) for such period.  In connection with any calculation of the
financial covenants set forth in Section 7.17 upon giving effect to a
transaction on a “Pro-Forma Basis”, (i) any Indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with such transaction (or any
other transaction which occurred during the relevant four fiscal quarter
period) shall be deemed to have been incurred as of the first day of the
relevant four fiscal-quarter period, (ii) if such Indebtedness has a floating
or formula rate, then the rate of interest for such Indebtedness for the
applicable period for purposes of the calculations contemplated by this
definition shall be determined by utilizing the rate which is or would be in
effect with respect to such Indebtedness as at the relevant date of such
calculations and (iii) income statement items (whether positive or negative)
attributable to all property acquired in such transaction or to the Investment
comprising such transaction, as applicable, shall be included as if such
transaction has occurred as of the first day of the relevant four-fiscal-quarter
period, (iv) such other pro-forma adjustments which would be permitted or
required by Regulations S-K and S-X under the Securities Act shall be taken
into account and (v) such other adjustments made by the Borrower with the
consent of the Administrative Agent (not to be unreasonably withheld) shall be
taken into account.

 

“Pro-Forma Compliance Certificate” means a
certificate of the chief financial officer or chief accounting officer of the
Borrower delivered to the Administrative Agent in connection with any

 

31

 

transaction for which a
calculation on a “Pro-Forma Basis” is permitted or required hereunder and
containing reasonably detailed calculations demonstrating, upon giving effect
to the applicable transaction on a Pro-Forma Basis, compliance, as applicable,
with the Leverage Ratio, the Senior Secured Leverage Ratio, the Senior Leverage
Ratio and the Fixed Charge Coverage Ratio as of the last day of the most recent
period of four consecutive fiscal quarters of Holdings which precedes or ends
on the date of the applicable transaction and with respect to which the
Administrative Agent shall have received the consolidated financial information
for Holdings and its Consolidated Subsidiaries required under Section
6.01(a) or (b), as applicable, and the Compliance Certificate
required by Section 6.02(b) for such period.

 

“Public Debt Issuance” has the meaning
specified in Section 7.01(xviii).

 

“Purchase Money Indebtedness” means
Indebtedness of the Borrower or any of its Subsidiaries incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property used in the business of the Borrower or
such Subsidiary.

 

“Qualified Capital Stock” means common stock of
Holdings issued in a Qualifying Equity Issuance.

 

“Qualifying Equity Issuance” means any issuance
of Equity Interests by Parent Holdings or any receipt by Parent Holdings of a
capital contribution, the Net Cash Proceeds of which are contributed promptly to
the common equity of the Borrower if: (i) after giving effect thereto, no
Change of Control shall have occurred; (ii) such stock shall be issued in
a private placement exempt from registration under the Securities Act; and
(iii) the Net Cash Proceeds thereof shall be used (without duplication)
only (A) to make Consolidated Capital Expenditures in excess of the
amounts allowed under Section 7.14, (B) to make Investments in
Permitted Joint Ventures in excess of the amounts allowed under Section
7.06(a)(xii), (C) to make Permitted Business Acquisitions in excess of
the amounts allowed under clause (vii) of the definition of “Permitted
Business Acquisition”, (D) to make Investments contemplated by, but in excess
of the amounts allowed under, Section 7.06(a)(xvii), (E) to repay
Indebtedness of the Borrower and its Subsidiaries, (F) to make Restricted
Payments in excess of the amounts allowed under Section 7.07(iv), (v)
and (vi) and (G) to fund Investments contemplated by Section
7.06(a)(xvi)(A)(x).

 

“Qualifying IPO” means an underwritten primary
public offering (other than a public offering pursuant to a registration
statement on Form S-8 (or any successor form)) of the common stock of Parent
Holdings or Holdings (i) pursuant to an effective registration statement filed
with the United States Securities and Exchange Commission in accordance with
the Securities Act (whether alone or in conjunction with a secondary public
offering) and (ii) resulting in gross proceeds of at least $75,000,000.

 

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

 

“Refinanced Agreements” means those
instruments, documents and agreements listed on Schedule 1.01B.

 

“Refunded Swing Line Loan” has the meaning
specified in Section 2.01(d)(iii).

 

“Register” has the meaning specified in Section
10.07(c).

 

“Regulation D, O, T, U or X” means Regulation
D, O, T, U or X, respectively, of the Board of Governors of the Federal Reserve
System as amended, or any successor regulation.

 

32

 

“Reinvestment Funds” means, with respect to any
Insurance Proceeds or any Condemnation Award exceeding the Applicable Basket
Amount in respect of the single event or series of related events giving rise
thereto, that portion of such funds as shall, according to a certificate of a
Responsible Officer of the Borrower delivered to the Administrative Agent
within 30 days after the occurrence of the Casualty or Condemnation giving rise
thereto (and in any case prior to the receipt thereof by any Group Company), be
reinvested within 365 days after the occurrence of the Casualty or Condemnation
giving rise thereto in the repair, restoration or replacement of the properties
that were the subject of such Casualty or Condemnation; provided that
(i) such certificate shall be accompanied by evidence reasonably satisfactory
to the Administrative Agent that any property subject to such Casualty or
Condemnation has been or will be repaired, restored or replaced to its
condition immediately prior to such Casualty or Condemnation, (ii) pending such
reinvestment, the entire amount of such proceeds shall be deposited in an
account with the Applicable Collateral Agent for the benefit of the Finance
Parties, over which the Collateral Agent shall have sole control and exclusive
right of withdrawal (which may include the Reinvestment Funds Account
established under the Security Agreement), (iii) from and after the date of
delivery of such certificate, the Borrower or one or more of its Subsidiaries
shall diligently proceed, in a commercially reasonable manner, to complete the
repair, restoration or replacement of the properties that were the subject of
such Casualty or Condemnation as described in such certificate and (iv) no
Event of Default shall have occurred and be continuing or, if the Borrower or
one or more of its Subsidiaries shall have then entered into one or more
continuing agreements with a Person not an Affiliate of any of them for the
repair, restoration or replacement of the properties that were the subject of
such Casualty or Condemnation, none of the Administrative Agent or the
Collateral Agents shall have commenced any action or proceeding to exercise or
seek to exercise an right or remedy with respect to any Collateral (including
any action of foreclosure, enforcement, collection or execution or by and
proceeding under any Debtor Relief Law with respect to any Loan Party); and provided,
further, that, if any of the foregoing conditions shall cease to be
satisfied at any time, such funds shall no longer be deemed Reinvestment Funds
and such funds shall immediately be applied to prepayment of the Loans in
accordance with Section 2.09(b).

 

“Release” means, with respect to any Person,
any release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration, in each case, of any Hazardous
Materials into the indoor or outdoor environment or into or out of any property
owned, leased or operated by such Person, including the movement of Hazardous
Materials through or in the air, soil, surface water, ground water or property.

 

“Required Lenders” means, collectively, (i)
Revolving Lenders, Term B Lenders and Second Lien Lenders having (A) on and
prior to the Closing Date, more than 50% of the sum of the aggregate Revolving
Commitments, Term B Commitments and Second Lien Commitments then outstanding,
(B) after the Closing Date and on and prior to the Revolving Termination Date,
more than 50% of the sum of the aggregate Revolving Commitments and the
principal amount of all Term B Loans and Second Lien Loans then outstanding and
(C) after the Revolving Termination Date, more than 50% of the sum of the
aggregate Revolving Outstandings and the principal amount of all Term B Loans
and Second Lien Loans then outstanding and (ii) if the Senior Lenders on any
date comprise less than 50% of the Required Lenders, the Required Senior
Lenders.  A Defaulting Lender shall not
be included in the calculation of the “Required Lenders”.

 

“Required Revolving Lenders” means,
collectively, Revolving Lenders having more than 50% of the aggregate Revolving
Commitments or, after the Revolving Termination Date, more than 50% of the
aggregate Revolving Outstandings.  A
Defaulting Lender shall not be included in the calculation of “Required
Revolving Lenders”.

 

“Required Second Lien Lenders” means,
collectively, Second Lien Lenders having more than 50% of the aggregate
outstanding amount of the Second Lien Commitments or, after the Closing Date,
more than 50% of the principal amount of the Second Lien Loans then
outstanding.  A Defaulting Lender shall
not be included in the calculation of “Required Second Lien Lenders”.

 

33

 

“Required Senior Lenders” means, collectively,
Revolving Lenders and Term B Lenders having (i) on and prior to the Closing
Date, more than 50% of the sum of the aggregate Revolving Commitments and Term
B Commitments then outstanding, (ii) after the Closing Date and on and prior to
the Revolving Termination Date, more than 50% of the sum of the aggregate
Revolving Commitments and the principal amount of all Term B Loans then
outstanding and (iii) after the Revolving Termination Date, more than 50% of the
sum of the aggregate Revolving Outstandings and the principal amount of all
Term B Loans then outstanding.  A
Defaulting Lender shall not be included in the calculation of the “Required
Senior Lenders”.

 

“Required Term B Lenders” means, collectively,
Term B Lenders having more than 50% of the aggregate outstanding amount of the
Term B Commitments or, after the Closing Date, more than 50% of the principal
amount of the Term B Loans then outstanding. 
A Defaulting Lender shall not be included in the calculation of “Required
Term B Lenders”.

 

“Requisite Priority Liens” means, collectively,
(i) a valid and perfected first priority security interest in favor of the
Senior Collateral Agent for the benefit of the Senior Finance Parties and
securing the Senior Obligations and (ii) a valid and perfected second priority
security interest, junior only to security interest of the Senior Collateral
Agent for the benefit of the Senior Finance Parties securing the Senior
Obligations, in favor of the Second Lien Collateral Agent for the benefit of
the Second Lien Credit Parties and securing the Second Lien Obligations.

 

“Research and Development Cost Sharing Agreement”
means an agreement between the Borrower, any Wholly-Owned Domestic Subsidiaries
of any Loan Party and a Foreign IP Holdco under which they agree jointly to
bear the cost and receive the benefits of further development of Intellectual
Property and other intangible assets based on cost sharing principles that
represent the forecasted respective benefits reasonably expected to be derived
and expenses to be incurred in connection with the arrangement, provided,
that title to any Intellectual Property created pursuant to the Research and
Development Cost Sharing Agreement, whether by Borrower, any Wholly-Owned Domestic
Subsidiaries of any Loan Party, any Foreign Subsidiary, or Foreign IP Holdco,
shall be held by the Borrower or other Loan Party (other than the Foreign
Subsidiaries), subject only to a license to a Foreign IP Holdco under terms
identical to those implemented pursuant to clauses (iii)(B)(x) and (iii)(B)(y)
of the definition of “Foreign IP Transfer Transaction”.

 

“Responsible Officer” means the chief executive
officer, president, senior vice president, chief financial officer or treasurer
of a Loan Party.  Any document delivered
hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Loan Party.

 

“Restricted Payment” means (i) any dividend or
other distribution (whether in cash, securities or other property), direct or
indirect, on account of any class of Equity Interests or Equity Equivalents of
any Group Company, now or hereafter outstanding, (ii) any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation, termination or similar payment, purchase or other acquisition for
value, direct or indirect, of any class of Equity Interests or Equity
Equivalents of any Group Company, now or hereafter outstanding or (iii) any
payment made to retire, or to obtain the

 

34

 

surrender of, any
outstanding warrants, options or other rights to acquire any class of Equity
Interests or Equity Equivalents of any Group Company, now or hereafter
outstanding.

 

“Revolving Borrowing” means a Borrowing
comprised of Revolving Loans and identified as such in the Notice of Borrowing
with respect thereto.

 

“Revolving Commitment” means, with respect to
any Lender, (i) the commitment of such Lender, in an aggregate principal amount
at any time outstanding of up to such Lender’s Revolving Commitment Percentage
of the Revolving Committed Amount, (i) to make Revolving Loans in accordance
with the provisions of Section 2.01(a), (ii) to purchase Participation
Interests in Swing Line Loans in accordance with the provisions of Section
2.01(d) and (iii) to purchase Participation Interests in Letters of Credit
in accordance with the provisions of Section 2.05(e). and (ii) any such
commitment of such Lender that is included as part of a Facilities Increase.

 

“Revolving Commitment Percentage” means, for
each Lender, the percentage (carried out to the ninth decimal place) identified
as its Revolving Commitment Percentage on Schedule 2.01 hereto, as such
percentage may be adjusted pursuant to Section 2.10 or modified in
connection with any assignment made in accordance with the provisions of Section
10.07(b).

 

“Revolving Committed Amount” means $30,000,000
or such greater or lesser amount to which the Revolving Committed Amount may be
adjusted pursuant to Section 2.10.

 

“Revolving Lender” means each Lender identified
in Schedule 2.01 as having a Revolving Commitment and each Eligible
Assignee which acquires a Revolving Commitment or Revolving Loan pursuant to Section
10.07(b) and their respective successors.

 

“Revolving Loan” means a Loan made under Section
2.01(a).

 

“Revolving Note” means a promissory note,
substantially in the form of Exhibit B-1 hereto, evidencing the
obligation of the Borrower to repay outstanding Revolving Loans, as such note
may be amended, modified, supplemented, extended, renewed or replaced from time
to time.

 

“Revolving Outstandings” means at any date the
aggregate outstanding principal amount of all Revolving Loans and Swing Line
Loans plus the aggregate outstanding amount of all L/C Obligations.

 

“Revolving Termination Date” means the fifth
anniversary of the Closing Date (or, if such day is not a Business Day, the
next preceding Business Day) or such earlier date upon which the Revolving
Commitments shall have been terminated in their entirety in accordance with
this Agreement.

 

“Sale/Leaseback Transaction” means any direct
or indirect arrangement with any Person (other than Holdings or any of its
Subsidiaries) or to which any such Person is a party providing for the leasing
to Holdings or any of its Subsidiaries of any property, whether owned by
Holdings or any of its Subsidiaries as of the Closing Date or later acquired,
which has been or is to be sold or transferred by Holdings or any of its
Subsidiaries to such Person or to any other Person from whom funds have been,
or are to be, advanced by such Person to Holdings or any if its Subsidiaries on
the security of such property.

 

“S&P” means Standard & Poor’s Ratings
Group, a division of McGraw Hill, Inc., a New York corporation, and its
successors or, absent any such successor, such nationally recognized
statistical rating organization as the Borrower and the Administrative Agent
may select.

 

35

 

“SEC” means the Securities and Exchange
Commission, or any Governmental Authority succeeding to any of its principal
functions.

 

“Second Lien Borrowing” means a Borrowing
comprised of Second Lien Loans and identified as such in the Notice of
Borrowing with respect thereto.

 

“Second Lien Collateral Agent” means Bank of
America, N.A., as Second Lien Collateral Agent for the Second Lien Lenders
under this Agreement and the Collateral Documents, and its permitted successor
or successors in such capacity and, if there is no acting Second Lien
Collateral Agent under this Agreement and the Collateral Documents, the
Required Second Lien Lenders.

 

“Second Lien Commitment” means, with respect to
any Lender, the commitment of such Lender to make a Second Lien Loan on the
Closing Date in a principal amount equal to such Lender’s Second Lien
Commitment Percentage of the Second Lien Committed Amount.

 

“Second Lien Commitment Percentage” means, for
each Lender, the percentage (carried out to the ninth decimal place) identified
as its Second Lien Commitment Percentage on Schedule 2.01, as such
percentage may be reduced pursuant to Section 2.10(b), (d)  or
(e) and modified in connection with any Assignment and Assumption made
in accordance with the provisions of Section 10.07(b).

 

“Second Lien Committed Amount” means
$72,000,000.

 

“Second Lien Credit Party” means each Second
Lien Lender, the Second Lien Collateral Agent and each Indemnitee in respect of
Second Lien Loans and their respective successors and assigns, and “Second Lien
Credit Parties” means any two or more of them, collectively.

 

“Second Lien Lender” means each bank or other
lending institution identified on Schedule 2.01 as having a Second Lien
Commitment and each Eligible Assignee which acquires a Second Lien Loan
pursuant to Section 10.07(b) and their respective successors.

 

“Second Lien Loan” means a Loan made to the
Borrower under Section 2.01(c).

 

“Second Lien Maturity Date” means December 31,
2011 (or if such day is not a Business Day, the next preceding Business Day).

 

“Second Lien Note” means a promissory note,
substantially in the form of Exhibit B-3 hereto, evidencing the
obligation of the Borrower to repay outstanding Second Lien Loans, as such note
may be amended, modified or supplemented from time to time.

 

“Second Lien Obligations” means, with respect
to each Loan Party, without duplication:

 

(i)            in the
case of the Borrower, all principal of and interest (including, without
limitation, any interest which accrues after the commencement of any proceeding
under any Debtor Relief Law with respect to the Borrower to the extent allowed
or allowable as a claim in any such proceeding) on any Second Lien Loan under,
or any Second Lien Note issued pursuant to, this Agreement or any other Loan
Document;

 

(ii)           all fees,
expenses, indemnification obligations and other amounts of whatever nature now
or hereafter payable by such Loan Party under any Loan Document in respect of
any Second Lien Loan (including, without limitation, any amounts which accrue
after the commencement of any proceeding under any Debtor Relief Law with
respect to such Loan

 

36

 

Party to the
extent allowed or allowable as a claim in any such proceeding) pursuant to this
Agreement or any other Loan Document;

 

(iii)          all
expenses of the Second Lien Collateral Agent as to which the Second Lien
Collateral Agent has a right to reimbursement by such Loan Party under Section
10.04 of this Agreement or under any other similar provision of any other
Loan Document, including, without limitation, any and all sums advanced by the
Second Lien Collateral Agent to preserve the Collateral or preserve its
security interests in the Collateral to the extent permitted under any Loan
Document or applicable Law;

 

(iv)          all amounts
paid by any Indemnitee in respect of any Second Lien Loan as to which such
Indemnitee has the right to reimbursement by such Loan Party under Section
10.05 of this Agreement or under any other similar provision of any other
Loan Document; and

 

(v)           in the
case of Parent Holdings, Holdings and each Subsidiary Guarantor, all amounts
now or hereafter payable by Parent Holdings, Holdings or such Subsidiary
Guarantor and all other obligations or liabilities now existing or hereafter
arising or incurred (including, without limitation, any amounts which accrue
after the commencement of any proceeding under any Debtor Relief Law with
respect to the Borrower, Parent Holdings, Holdings or such Subsidiary
Guarantor, to the extent allowed or allowable as a claim in any such
proceeding) on the part of Parent Holdings, Holdings or such Subsidiary
Guarantor under or in respect of the Second Lien Loans pursuant to this
Agreement, the Guaranty or any other Loan Document;

 

together in each case with all renewals, modifications,
consolidations or extensions thereof.

 

“Second Lien Pledge Agreement” means the Pledge
Agreement, substantially in the form of Exhibit G-2B hereto, dated as of
the date hereof among Parent Holdings, Holdings, the Borrower, the Subsidiary
Guarantors and the Second Lien Collateral Agent, as the same may be amended,
modified or supplemented from time to time.

 

“Second Lien Security Agreement” means the
Security Agreement, substantially in the form of Exhibit G-1B
hereto, dated as of the date hereof among Parent Holdings, Holdings, the
Borrower, the Subsidiary Guarantors and the Second Lien Collateral Agent, as
the same may be amended, modified or supplemented from time to time.

 

“Securities Act” means the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.

 

“Security Agreement” means the Senior Security
Agreement or the Second Lien Security Agreement, and “Security Agreements”
means both of them, collectively.

 

“Senior Collateral Agent” means Bank of
America, N.A., as Senior Collateral Agent for the Senior Finance Parties under
the Senior Finance Documents, and its permitted successor or successors in such
capacity and, if there is no acting Senior Collateral Agent under the Senior
Finance Documents, the Required Senior Lenders.

 

“Senior Credit Obligations” means, with respect
to each Loan Party, without duplication:

 

(i)            in the
case of the Borrower, all principal of and interest (including, without
limitation, any interest which accrues after the commencement of any proceeding
under any Debtor Relief Law with respect to the Borrower, whether or not
allowed or allowable as a

 

37

 

claim in any such
proceeding) on any Revolving Loan, Term B Loan or L/C Obligation under, or any
Revolving Note, Term B Note or Swingline Note issued pursuant to, this
Agreement or any other Loan Document;

 

(ii)           all fees,
expenses, indemnification obligations and other amounts of whatever nature now
or hereafter payable by such Loan Party under any Loan Document in respect of
any Revolving Loan, Term B Loan or L/C Obligation under, or any Revolving Note,
Term B Note or Swingline Note issued pursuant to, this Agreement or any other
Loan Document (including, without limitation, any amounts which accrue after
the commencement of any proceeding under any Debtor Relief Law with respect to
such Loan Party, whether or not allowed or allowable as a claim in any such
proceeding) pursuant to this Agreement or any other Loan Document;

 

(iii)          all
expenses of the Administrative Agent or the Senior Collateral Agent as to which
such Agent have a right to reimbursement by such Loan Party under Section
10.04 of this Agreement or under any other similar provision of any other
Loan Document, including, without limitation, any and all sums advanced by the
Senior Collateral Agent to preserve the Collateral or preserve its security
interests in the Collateral to the extent permitted under any Loan Document or
applicable Law;

 

(iv)          all amounts
paid by any Indemnitee in respect of any Revolving Loan, Term B Loan or L/C
Obligation under, or any Revolving Note, Term B Note or Swingline Note issued
pursuant to, this Agreement or any other Loan Document as to which such
Indemnitee has the right to reimbursement by such Loan Party under Section
10.05 of this Agreement or under any other similar provision of any other
Loan Document; and

 

(v)           in the
case of Parent Holdings, Holdings and each Subsidiary Guarantor, all amounts
now or hereafter payable by Parent Holdings, Holdings or such Subsidiary
Guarantor and all other obligations or liabilities now existing or hereafter
arising or incurred (including, without limitation, any amounts which accrue
after the commencement of any proceeding under any Debtor Relief Law with
respect to the Borrower, Parent Holdings, Holdings or such Subsidiary Guarantor
under or in respect of any Revolving Loan, Swing Line Loan, Term B Loan or L/C
Obligation under, or any Revolving Note, Swing Line Note or Term B Note issued
pursuant to, this Agreement or any other Loan Document, whether or not allowed
or allowable as a claim in any such proceeding) on the part of Parent Holdings,
Holdings or such Subsidiary Guarantor pursuant to this Agreement, the Guaranty
or any other Loan Document;

 

together in each case with all renewals,
modifications, consolidations or extensions thereof.

 

“Senior Credit Party” means each Senior Lender
(including any Affiliate in respect of any Cash Management Obligations), each
L/C Issuer, the Administrative Agent, the Senior Collateral Agent and each
Indemnitee in respect of Senior Loans and their respective successors and
assigns, and “Senior Credit Parties” means any two or more of them,
collectively.

 

“Senior Finance Documents” means (i) each Loan
Document, (ii) each Swap Agreement permitted hereunder with one or more Swap
Creditors and (iii) each agreement or instrument governing Cash Management
Obligations between any Loan Party and a Senior Lender.

 

“Senior Finance Party” means each Finance Party
other than a Second Lien Credit Party.

 

38

 

“Senior Lender” means each bank or other
lending institution identified on Schedule 2.01 as having a Revolving
Commitment, a Swing Line Commitment or a Term B Commitment and each Eligible
Assignee which acquires a Revolving Loan or a Term B Loan pursuant to Section
10.07(b) and their respective successors.

 

“Senior Leverage Ratio” means on any date the
ratio of (i) Consolidated Funded Indebtedness (exclusive of Subordinated
Indebtedness) as of the last day of the fiscal quarter of Holdings ending on,
or most recently preceding, such date to (ii) Consolidated EBITDA for the
period of four consecutive fiscal quarters of Holdings ending on, or most
recently preceding, such date.

 

“Senior Loan” means a Revolving Loan or a Term
B Loan, and “Senior Loans” means two or more of them.

 

“Senior Obligations” means, at any date, all
Finance Obligations, other than Second Lien Obligations.

 

“Senior Pledge Agreement” means the Pledge
Agreement, substantially in the form of Exhibit G-2A hereto, dated as of
the date hereof among Parent Holdings, Holdings, the Borrower, the Subsidiary
Guarantors and the Senior Collateral Agent, as the same may be amended,
modified or supplemented from time to time.

 

“Senior Secured Leverage Ratio” means on any
date the ratio of (i) Consolidated Secured Indebtedness (exclusive of the
Second Lien Loans) as of the last day of the fiscal quarter of Holdings ending
on, or most recently preceding, such date to (ii) Consolidated EBITDA for the
period of four consecutive fiscal quarters of Holdings ending on, or most
recently preceding, such date.

 

“Senior Security Agreement” means the Security
Agreement, substantially in the form of Exhibit G-1A hereto, dated
as of the date hereof among Parent Holdings, Holdings, the Borrower, the
Subsidiary Guarantors and the Senior Collateral Agent, as the same may be
amended, modified or supplemented from time to time.

 

“Solvent” means, with respect to any Person as
of a particular date, that on such date (i) such Person is able generally
to pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (ii) such Person
does not intend to, and does not believe that it will, incur debts beyond such
Person’s ability to pay as such debts mature, (iii) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person’s assets would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged or is to engage, (iv)
the fair value (determined on a going concern basis and in accordance with the
United States Bankruptcy Code) of the assets of such Person is greater than the
total amount of liabilities, including, without limitation, probable
liabilities, of such Person and (v) the present fair value (i.e., the amount
that may be realized within a commercially reasonable time, either through
collection or sale at the regular market value, conceiving the latter as the
amount that could be obtained for the assets in question within such period by
a capable and diligent businessperson from a buyer who is willing to purchase
under ordinary selling conditions) of the assets of such Person will exceed the
amount that will be required to pay the probable liability on such Person’s
existing debts as they become absolute and matured.  For purposes of this definition, “debt” means
any legal liability, whether matured, unmatured, liquidated or unliquidated,
absolute, fixed or contingent, or a right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right
is an equitable remedy, is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, secured or
unsecured.  In computing the amount of
contingent or unliquidated liabilities at any time, such

 

39

 

liabilities shall be
computed at the amount that, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability (in each case as interpreted in
accordance with applicable Debtor Relief Laws).

 

“SPC” has the meaning specified in Section
10.07(h).

 

“Sponsor” means GTCR Fund VII, L.P. and its
successors.

 

“Sponsor Group” means the Sponsor and any of
its Affiliates; provided that each such Affiliate is reasonably
acceptable to the Administrative Agent.

 

“Standby Letter of Credit” has the meaning
specified in Section 2.05(b).

 

“Standby Letter of Credit Fee” has the meaning
specified in Section 2.11(b)(i).

 

“Subordinated Indebtedness” of any Person means
all unsecured Indebtedness (i) the principal of which by its terms is not
required to be repaid, in whole or in part, before the first anniversary of the
latest of the Revolving Termination Date, the Term B Maturity Date and the
Second Lien Maturity Date, (ii) which is subordinated in right of payment to
such Person’s indebtedness, obligations and liabilities to the Senior Credit
Parties under the Loan Documents pursuant to payment and subordination
provisions reasonably satisfactory in form and substance to the Administrative
Agent and to such Person’s indebtedness, obligations and liabilities to the
Second Lien Credit Parties under the Loan Documents pursuant to payment and
subordination provisions satisfactory in form and substance to the Second Lien
Collateral Agent and (C) is issued pursuant to documents having covenants,
subordination provisions and events of default that are in no event less
favorable, including with respect to rights of acceleration, to such Person
than the terms hereof or are otherwise reasonably satisfactory in form and
substance to the Administrative Agent and the Second Lien Collateral Agent.

 

“Subsidiary” means, with respect to any Person,
any corporation, partnership, limited liability company, association or other
business entity of which (i) if a corporation, more than 50% of the Voting
Securities of which are at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a partnership, limited liability company,
association or business entity other than a corporation, more than 50% of the
partnership or other similar ownership interests thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof.  For purposes hereof, a Person or Persons
shall be deemed to have more than 50% ownership interest in a partnership,
limited liability company, association or other business entity if such Person
or Persons shall be allocated more than 50% of partnership, association or
other business entity gains or losses or shall be or control the managing
director, manager or a general partner of such partnership, association or
other business entity.  Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall
refer to a Subsidiary or Subsidiaries of the Borrower.

 

“Subsidiary Guarantor” means each Subsidiary of
Holdings on the Closing Date (other than the Borrower and a Foreign Subsidiary)
and each Subsidiary of Holdings (other than a Foreign Subsidiary, except to the
extent otherwise provided in Section 6.12(d)) that becomes a party to
the Guaranty after the Closing Date by execution of an Accession Agreement, and
“Subsidiary Guarantors” means any two or more of them.

 

“Swap Agreement” means (i) any and all rate
swap transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or

 

40

 

options or forward bond
or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement and (ii) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement or any other master agreement
(any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.

 

“Swap Creditor” means any Lender or any
Affiliate of any Lender from time to time party to one or more Swap Agreements
permitted hereunder with a Loan Party (even if any such Lender for any reason
ceases after the execution of such agreement to be a Lender hereunder), and its
successors and assigns, and “Swap Creditors” means any two or more of
them, collectively.

 

“Swap Obligations” of any Person means all
obligations (including, without limitation, any amounts which accrue after the
commencement of any bankruptcy or insolvency proceeding with respect to such
Person, whether or not allowed or allowable as a claim under any proceeding
under any Debtor Relief Law) of such Person in respect of any Swap Agreement,
excluding any amounts which such Person is entitled to set-off against its
obligations under applicable Law.

 

“Swap Termination Value” means, at any date and
in respect of any one or more Swap Agreements, after taking into account the
effect of any legally enforceable netting agreements relating to such Swap
Agreements, (i) for any date on or after the date such Swap Agreements have
been closed out and termination value(s) determined in accordance therewith,
such termination value(s), and (ii) for any date prior to the date referenced
in clause (i), the amount(s) determined as the mark-to-market value(s)
for such Swap Agreements, as determined based upon one or more mid-market or
other readily available quotations provided by any recognized dealer in such
Swap Agreements (which may include any Lender).

 

“Swing Line Commitment” means the agreement of
the Swing Line Lender to make Loans pursuant to Section 2.01(d).  The Swing Line Commitment is a part of, and
not in addition to, the Revolving Committed Amount.

 

“Swing Line Committed Amount” means $5,000,000
(or such other amount not in excess of $10,000,000 as the Borrower and the
Swing Line Lender may agree from time to time), as such Swing Line Committed
Amount may be reduced pursuant to Section 2.10.

 

“Swing Line Lender” means Bank of America,
N.A., in its capacity as the Swing Line Lender under Section 2.01(d),
and its successor or successors in such capacity.

 

“Swing Line Loan” means a Base Rate Loan made
by the Swing Line Lender pursuant to Section 2.01(d), and “Swing Line
Loans” means any two or more of such Base Rate Loans.

 

“Swing Line Loan Request” has the meaning
specified in Section 2.02(b).

 

“Swing Line Note” means a promissory note,
substantially in the form of Exhibit B-4 hereto, evidencing the
obligation of the Borrower to repay outstanding Swing Line Loans, as such note
may be amended, modified, supplemented, extended, renewed or replaced from time
to time.

 

41

 

“Swing Line Termination Date” means the earlier
of (i) June 30, 2009 (or, if such day is not a Business Day, the next preceding
Business Day) or such earlier date upon which the Revolving Commitments shall
have been terminated in their entirety in accordance with this Agreement and
(ii) the date on which the Swing Line Commitment is terminated in its entirety
in accordance with this Agreement.

 

“Syndication Date” means the earlier of (i) the
date which is 90 days after the Closing Date and (ii) the date on which the
Administrative Agent determines in its sole discretion (and notifies the
Borrower) that the primary syndication (and the resulting addition of Lenders
pursuant to Section 10.07(b)) has been completed.

 

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

 

“Taxes” has the meaning specified in Section
3.01.

 

“Term B Borrowing” means a Borrowing comprised
of Term B Loans and identified as such in the Notice of Borrowing with respect
thereto.

 

“Term B Commitment” means, with respect to any
Lender, (i) the commitment of such Lender to make a Term B Loan on the Closing
Date in a principal amount equal to such Lender’s Term B Commitment Percentage
of the Term B Committed Amount and (ii) any commitment of such Lender that is
included as part of a Facilities Increase to make Term B Loans on any
Facilities Increase Date.

 

“Term B Commitment Percentage” means, for each
Lender, the percentage(carried out to the ninth decimal place) identified as
its Term B Commitment Percentage on Schedule 2.01, as such percentage
may be adjusted pursuant to Section 2.10 or modified in connection with
any assignment made in accordance with the provisions of Section 10.07(b).

 

“Term B Committed Amount” means $190,000,000.

 

“Term B Lender” means each bank or other
lending institution identified on Schedule 2.01 as having a Term B
Commitment and each Eligible Assignee which acquires a Term B Loan pursuant to Section
10.07(b) and their respective successors.

 

“Term B Loan” means a Loan made under Section
2.01(b).

 

“Term B Maturity Date” means June 30, 2011 (or
if such day is not a Business Day, the next preceding Business Day).

 

“Term B Note” means a promissory note,
substantially in the form of Exhibit B-3 hereto, evidencing the
obligation of the Borrower to repay outstanding Term B Loans, as such note may
be amended, modified or supplemented from time to time.

 

“Term Loan” means a Term B Loan or a Second
Lien Loan, and “Term Loans” means any two or more of them, collectively.

 

“Threshold Amount” means the amount set forth
opposite such term on Schedule 1.01D.

 

42

 

“Trade Letter of Credit” has the meaning specified
in Section 2.05(b).

 

“Trade Letter of Credit Fee” has the meaning
specified in Section 2.11(b)(ii).

 

“Transaction” means the Foothill Refinancing,
the Mezzanine Debt Refinancing, the Preferred Stock Redemption, the Equity
Distribution, the borrowing of the Senior Loans and the Second Lien Loans on
the Closing Date, the repayment of all Indebtedness and other obligations under
the Refinanced Agreements and the other events contemplated hereby and thereby
to occur on the Closing Date.

 

“Type” has the meaning specified in Section
1.08.

 

“Unfunded Liabilities” means, except as
otherwise provided in Section 5.12(a)(1)(B), (i) with respect to each
Plan, the amount (if any) by which the present value of all nonforfeitable
benefits under each Plan exceeds the current value of such Plan’s assets
allocable to such benefits, all determined in accordance with the respective
most recent valuations for such Plan using applicable PBGC plan termination
actuarial assumptions (the terms “present value” and “current value” shall have
the same meanings specified in Section 3 of ERISA) and (ii) with respect to
each Foreign Pension Plan, the amount (if any) by which the present value of
all nonforfeitable benefits under each Foreign Pension Plan exceeds the current
value of such Foreign Pension Plan’s assets allocable to such benefits, all
determined in accordance with the respective most recent valuations for such
Plan using the most recent actuarial assumptions and methods being used by the
Foreign Pension Plan’s actuaries for financial reporting under applicable
accounting and reporting standards.

 

“United States” means the United States of
America, including each of the States and the District of Columbia, but
excluding its territories and possessions.

 

“US IP Holdco” means a direct, Wholly-Owned
Domestic Subsidiary of the Borrower which (i) owns 100% of the Equity Interests
in all Foreign IP Holdcos, (ii) is a Subsidiary Guarantor, (iii) has delivered
such documents, instruments and certificates as the Administrative Agent may
reasonably request so as to cause it and the other Loan Parties to be in
compliance with Section 6.12 and (iv) 100% of the Equity Interests in
which have been pledged by the Borrower to the Collateral Agents as security
for the Senior Obligations and the Second Lien Obligations, respectively, under
the Pledge Agreements.

 

“U.S. Patriot Act” means the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (Title III of Pub. L. 107-56 (signed into Law
October 26, 2001)), as the same may be amended, supplemented, modified,
replaced or otherwise in effect from time to time.

 

“Unreimbursed Amount” has the meaning specified
in Section 2.05(f)(iv).

 

“Unused Revolving Commitment Amount” means, for
any period, the amount by which (i) the then applicable Revolving Committed
Amount exceeds (ii) the daily average sum for such period of (A) the aggregate
principal amount of all outstanding Revolving Loans plus (B) the aggregate
amount of all outstanding L/C Obligations. 
For the avoidance of doubt, no deduction shall be made on account of
outstanding Swing Line Loans in calculating the Unused Revolving Commitment
Amount.

 

“Voting Securities” means Equity Interests of
any Person having ordinary power to vote in the election of members of the
board of directors, managers, trustees or other controlling Persons of such
Person (irrespective of whether, at the time, Equity Interests of any other
class or classes of such Person shall have or might have voting power by reason
of the happening of any contingency).

 

43

 

“Weighted Average Life to Maturity” means, when
applied to any Indebtedness at any date, the number of years obtained by
dividing:  (i) the sum of the products
obtained by multiplying (A) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (B) the number of
years (calculated to the nearest one-twelfth) that will elapse between such
date and the making of such payment; by (ii) the then outstanding principal
amount of such Indebtedness.

 

“Welfare Plan” means a “welfare plan” as such
term is defined in Section 3(1) of ERISA.

 

“Wholly-Owned Subsidiary” means, with respect
to any Person at any date, any Subsidiary of such Person all of the shares of
capital stock or other ownership interests of which (except directors’
qualifying shares) are at the time directly or indirectly owned by such Person.

 

Section
1.02  Other Interpretative Provisions.  With reference to
this Agreement and each other Loan Document, unless otherwise specified herein
or in such other Loan Document:

 

(a)           The
meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms.

 

(b)           The
words “herein,” “hereto,” “hereof” and “hereunder”
and words of similar import when used in any Loan Document shall refer to such
Loan Document as a whole and not to any particular provision thereof.  Article, Section, Exhibit and Schedule
references are to the Loan Document in which such reference appears.  The term “including” is by way of
example and not limitation.  The term “documents”
includes any and all instruments, documents, agreements, certificates, notices,
reports, financial statements and other writings, however evidenced, whether in
physical or electronic form.

 

(c)           In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including”, the words “to”
and “until” each mean “to but excluding” and the word “through”
means “to and including”.

 

(d)           Section
headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.

 

Section 1.03  Accounting Terms and Determinations.  Except as otherwise expressly provided herein,
all accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Lenders hereunder shall be prepared, in accordance with GAAP
applied on a consistent basis.  All
financial statements delivered to the Lenders hereunder shall be accompanied by
a statement from the Borrower that GAAP has not changed since the most recent
financial statements delivered by the Borrower to the Lenders or if GAAP has
changed describing such changes in detail and explaining how such changes
affect the financial statements.  All calculations
made for the purposes of determining compliance with this Agreement shall
(except as otherwise expressly provided herein) be made by application of GAAP
applied on a basis consistent with the most recent annual or quarterly
financial statements delivered pursuant to Section 6.01 (or, prior to
the delivery of the first financial statements pursuant to Section 6.01,
consistent with the financial statements described in Section 5.05(a)
(but without giving effect to any deviations from GAAP disclosed therein)); provided,
however, that (i) if (A) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (B)
either the Administrative Agent or the Required Lenders shall so object in
writing within 60 days after delivery of such financial statements (or after
the Lenders have been informed of the change in GAAP affecting such financial
statements, if later), then

 

44

 

such calculations shall be made on a basis consistent with the most
recent financial statements delivered by the Borrower to the Lenders as to
which no such objection shall have been made, and the Borrower shall provide to
the Administrative Agent and the Lenders financial statements and other
documents required under this Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations made before and after
giving effect to such change in GAAP and (ii) if any change in GAAP or the
rules promulgated with respect thereto from those used in the preparation of
the most recent annual or quarterly financial statements delivered pursuant to Section
6.01 (or, prior to the delivery of the first financial statements pursuant
to Section 6.01, the financial statements described in Section
5.05(a) (but without giving effect to any deviations from GAAP disclosed
therein) results in a change in any of the financial calculations required by Section
7.17 or otherwise specified in Article VII (including in each case
all related definitions specified in Section 1.01) that would not have
resulted had such accounting change not occurred, the parties hereto agree to
enter into negotiations in order to amend such provisions so as equitably to
reflect such change such that the criteria for evaluation compliance with such
covenants shall be the same after such changes as if such change had not been
made.

 

Section 1.04  Annualization; Rounding.  If any determination hereunder is required by
the terms hereof to be made for a period of four consecutive fiscal quarters at
a time at which fewer than four full fiscal quarters have elapsed since the
Closing Date, such determination shall (except as otherwise expressly provided
herein) be made for the period elapsed from the Closing Date through the most
recent fiscal quarter then ended (annualized on a simple arithmetic basis, if
such determination is to be used in a ratio with a balance sheet item).  Any financial ratios required to be
maintained by any Group Company pursuant to this Agreement shall be calculated
by dividing the appropriate component by the other component, carrying the
result to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).

 

Section 1.05  References to Agreements and Laws.  Unless
otherwise expressly provided herein, (i) references to Organization Documents,
agreements (including the Loan Documents) and other contractual instruments
shall be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are
not prohibited by any Loan Document; and (ii) references to any Law shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Law.

 

Section 1.06  Times of Day.  Unless otherwise specified, all
references herein to times of day shall be references to Eastern time (daylight
or standard, as applicable).

 

Section
1.07  Letter of Credit Amounts. 
Unless otherwise specified, all references herein to the amount of a
Letter of Credit at any time shall be deemed to mean the maximum face amount of
such Letter of Credit after giving effect to all increases thereof contemplated
by such Letter of Credit or the L/C Documents related thereto, whether or not
such maximum face amount is in effect at such time.

 

Section
1.08  Classes and Types of Borrowings.  The term
“Borrowing” denotes the aggregation of Loans of one or more Lenders made
to the Borrower pursuant to Article II on the same date, all of which
Loans are of the same Class and Type (subject to Article III) and,
except in the case of Base Rate Loans, have the same initial Interest
Period.  Loans hereunder are
distinguished by “Class” and “Type”.  The
“Class” of a Loan (or of a Commitment to make such a Loan or of a
Borrowing comprised of such Loans) refers (i) to whether such Loan is a
Revolving Loan, a Term B Loan or a Second Lien Loan and (ii) in certain
instances to whether the Loans within a “Class” are Senior Loans or Second Lien
Loans, in which case the Class of Senior Loans is comprised of Revolving Loans
and Term B Loans and

 

45

 

the Class of Second Lien Loans is comprised of Second Lien Loans.  The “Type” of a Loan refers to whether
such Loan is a Eurodollar Loan or a Base Rate Loan.  Identification of a Loan (or a Borrowing) by
both Class and Type (e.g., a “Term B Eurodollar Loan”) indicates that
such Loan is a Loan of both such Class and such Type (e.g., both a Term B Loan
and a Eurodollar Loan) or that such Borrowing is comprised of such Loans.

 

ARTICLE
II

THE CREDIT FACILITIES

 

Section
2.01  Commitments to Lend.

 

(a)           Revolving Loans.  Each Revolving Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make Revolving Loans
to the Borrower pursuant to this Section 2.01(a) from time to time
during the Availability Period in amounts such that its Revolving Outstandings
shall not exceed (after giving effect to all Revolving Loans repaid, all
reimbursements of L/C Disbursements made, and all Refunded Swing Line Loans
paid concurrently with the making of any Revolving Loans) its Revolving
Commitment; provided that, immediately after giving effect to each such
Revolving Loan, (i) the aggregate Revolving Outstandings shall not exceed the
Revolving Committed Amount and (ii) with respect to each Revolving Lender
individually, such Lender’s outstanding Revolving Loans plus its (other than
the Swing Line Lender’s in its capacity as such) Participation Interests in outstanding
Swing Line Loans plus its Participation Interests in outstanding L/C
Obligations shall not exceed such Lender’s Revolving Commitment Percentage of
the Revolving Committed Amount.  Each
Revolving Borrowing comprised of Eurodollar Loans shall be in an aggregate
principal amount of $1,000,000 or any larger multiple of $500,000, and each
Revolving Borrowing comprised of Base Rate Loans shall be in an aggregate
principal amount of $500,000 or any larger multiple of $100,000 (except that
any such Borrowing may be in the aggregate amount of the unused Revolving
Commitments and any L/C Borrowing may be in the aggregate amount of any
outstanding Unreimbursed Amounts owed to one or more L/C Issuers as provided in
Section 2.05(f)(iv)) and shall be made from the several Revolving
Lenders ratably in proportion to their respective Revolving Commitments.  Within the foregoing limits, the Borrower may
borrow under this Section 2.01(a), repay, or, to the extent permitted by
Section 2.09, prepay, Revolving Loans and reborrow under this Section
2.01(a).

 

(b)           Term B Loans.  Each Term B Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make a Term B Loan to the
Borrower on the Closing Date in a principal amount not exceeding its Term B Commitment.  The Term B Borrowing shall be made from the
several Term B Lenders ratably in proportion to their respective Term B
Commitments.  The Term B Commitments are
not revolving in nature, and amounts repaid or prepaid prior to the Term B
Maturity Date may not be reborrowed. 
Each Term B Lender (or Affiliate or Approved Fund thereof) or Eligible
Assignee having, in its sole discretion, committed to a Facilities Increase
pursuant to Section 2.10(a) shall agree as part of such commitment that,
on the Facilities Increase Date for such Facilities Increase in the aggregate
Term B Commitments, on the terms and subject to the conditions set forth in its
commitment therefor or otherwise agreed to as part of such commitment or set
for in this Agreement as amended in connection with such Facilities Increase,
such Term B Lender (or Affiliate or Approved Fund thereof) or Eligible Assignee
will make a Term B Loan to the Borrower on the Facilities Increase Date for
such Facilities Increase in a principal amount not to exceed such commitment to
such Facilities Increase.

 

(c)           Second Lien Loans.  Each Second Lien Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make a Second Lien
Loan to the Borrower on the Closing Date in a principal amount not exceeding
its Second Lien

 

46

 

Commitment.  The
Second Lien Borrowing shall be made from the several Second Lien Lenders
ratably in proportion to their respective Second Lien Commitments.  The Second Lien Commitments are not revolving
in nature, and amounts repaid or prepaid prior to the Second Lien Maturity Date
may not be reborrowed.

 

(d)           Swing Line Loans.

 

(i)            The Swing
Line Lender agrees, on the terms and subject to the conditions set forth herein
and in the other Loan Documents, to make a portion of the Revolving Commitments
available to the Borrower from time to time during the Availability Period by
making Swing Line Loans to the Borrower in Dollars (each such loan, a “Swing
Line Loan” and, collectively, the “Swing Line Loans”); provided
that (A) the aggregate principal amount of the Swing Line Loans outstanding at
any one time shall not exceed the Swing Line Committed Amount, (B) with regard
to each Lender individually (other than the Swing Line Lender in its capacity
as such), such Lender’s outstanding Revolving Loans plus its Participation
Interests in outstanding Swing Line Loans plus its Participation Interests in
outstanding L/C Obligations shall not at any time exceed such Lender’s Revolving
Commitment Percentage of the Revolving Committed Amount, (C) with regard to the
Revolving Lenders collectively, the sum of the aggregate principal amount of
Swing Line Loans outstanding plus the aggregate amount of Revolving Loans
outstanding plus the aggregate amount of L/C Obligations outstanding shall not
exceed the Revolving Committed Amount and (D) the Swing Line Committed Amount
shall not exceed the aggregate of the Revolving Commitments then in
effect.  Swing Line Loans shall be made
and maintained as Base Rate Loans and may be repaid and reborrowed in
accordance with the provisions hereof prior to the Swing Line Termination
Date.  Swing Line Loans may be made
notwithstanding the fact that such Swing Line Loans, when aggregated with the
Swing Line Lender’s other Revolving Outstandings, exceeds its Revolving
Commitment.  The proceeds of a Swing Line
Borrowing may not be used, in whole or in part, to refund any prior Swing Line
Borrowing.

 

(ii)           The
principal amount of all Swing Line Loans shall be due and payable on the
earliest of (A) the maturity date agreed to by the Swing Line Lender and the
Borrower with respect to such Swing Line Loan (which maturity date shall not be
more than seven Business Days from the date of advance thereof); (B) the Swing Line
Termination Date, (C) the occurrence of any proceeding with respect to the
Borrower under any Debtor Relief Law or (D) the acceleration of any Loan or the
termination of the Revolving Commitments pursuant to Section 8.02.

 

(iii)          With
respect to any Swing Line Loans that have not been voluntarily prepaid by the
Borrower or paid by the Borrower when due under clause (ii) above, the
Swing Line Lender (by request to the Administrative Agent) or the
Administrative Agent at any time may, and shall at any time Swing Line Loans in
an amount of $1,000,000 or more shall have been outstanding for more than seven
days, on one Business Day’s notice, require each Revolving Lender, including
the Swing Line Lender, and each such Lender hereby agrees, subject to the provisions
of this Section 2.01(d), to make a Revolving Loan (which shall be
initially funded as a Base Rate Loan) in an amount equal to such Lender’s
Revolving Commitment Percentage of the amount of the Swing Line Loans (the “Refunded
Swing Line Loans”) outstanding on the date notice is given.

 

(iv)          In the case
of Revolving Loans made by Lenders other than the Swing Line Lender under clause
(iii) above, each such Revolving Lender shall make the amount of its
Revolving Loan available to the Administrative Agent, in same day funds, at the
Administrative Agent’s Office, not later than 1:00 P.M. on the Business Day
next succeeding the date such notice is given. 
The proceeds of such Revolving Loans shall be immediately delivered to
the Swing

 

47

 

Line Lender (and
not to the Borrower) and applied to repay the Refunded Swing Line Loans.  On the day such Revolving Loans are made, the
Swing Line Lender’s Revolving Commitment Percentage of the Refunded Swing Line Loans
shall be deemed to be paid with the proceeds of a Revolving Loan made by the
Swing Line Lender and such portion of the Swing Line Loans deemed to be so paid
shall no longer be outstanding as Swing Line Loans and shall instead be
outstanding as Revolving Loans.  The
Borrower authorizes the Administrative Agent and the Swing Line Lender to
charge the Borrower’s account with the Administrative Agent (up to the amount
available in such account) in order to pay immediately to the Swing Line Lender
the amount of such Refunded Swing Line Loans to the extent amounts received
from the Revolving Lenders, including amounts deemed to be received from the
Swing Line Lender, are not sufficient to repay in full such Refunded Swing Line
Loans.  If any portion of any such amount
paid (or deemed to be paid) to the Swing Line Lender should be recovered by or
on behalf of the Borrower from the Swing Line Lender in bankruptcy, by
assignment for the benefit of creditors or otherwise, the loss of the amount so
recovered shall be ratably shared among all Revolving Lenders in the manner
contemplated by Section 2.13.

 

(v)           A copy of
each notice given by the Swing Line Lender pursuant to this Section 2.01(d)
shall be promptly delivered by the Swing Line Lender to the Administrative
Agent and the Borrower.  Upon the making
of a Revolving Loan by a Revolving Lender pursuant to this Section 2.01(d),
the amount so funded shall no longer be owed in respect of its Participation
Interest in the related Refunded Swing Line Loans.

 

(vi)          If as a
result of any proceeding under any Debtor Relief Law, Revolving Loans are not
made pursuant to this Section 2.01(d) sufficient to repay any amounts
owed to the Swing Line Lender as a result of a nonpayment of outstanding Swing
Line Loans, each Revolving Lender agrees to purchase, and shall be deemed to
have purchased, a participation in such outstanding Swing Line Loans in an
amount equal to its Revolving Commitment Percentage of the unpaid amount
together with accrued interest thereon. 
Upon one Business Day’s notice from the Swing Line Lender, each
Revolving Lender shall deliver to the Swing Line Lender an amount equal to its
respective Participation Interest in such Swing Line Loans in same day funds at
the office of the Swing Line Lender specified or referred to in Section
10.02.  In order to evidence such
Participation Interest each Revolving Lender agrees to enter into a
participation agreement at the request of the Swing Line Lender in form and
substance reasonably satisfactory to all parties.  In the event any Revolving Lender fails to
make available to the Swing Line Lender the amount of such Revolving Lender’s
Participation Interest as provided in this Section 2.01(d)(vi), the
Swing Line Lender shall be entitled to recover such amount on demand from such Revolving
Lender together with interest at the customary rate set by the Swing Line
Lender for correction of errors among banks in New York City for one Business
Day and thereafter at the Base Rate plus the then Applicable Margin for Base
Rate Loans.

 

(vii)         Each
Revolving Lender’s obligation to make Revolving Loans pursuant to clause
(iv) above and to purchase Participation Interests in outstanding Swing
Line Loans pursuant to clause (vi) above shall be absolute and
unconditional and shall not be affected by any circumstance, including (without
limitation) (i) any set-off, counterclaim, recoupment, defense or other right
which such Revolving Lender or any other Person may have against the Swing Line
Lender, the Borrower, Holdings or any other Loan Party, (ii) the occurrence or
continuance of a Default or an Event of Default or the termination or reduction
in the amount of the Revolving Commitments after any such Swing Line Loans were
made, (iii) any adverse change in the condition (financial or otherwise) of the
Borrower or any other Person, (iv) any breach of this Agreement or any other
Loan Document by the Borrower or any other Lender, (v) whether any condition
specified in Article IV is then satisfied or (vi) any other
circumstance, happening or

 

48

 

event whatsoever,
whether or not similar to any of the forgoing. 
If such Lender does not pay such amount forthwith upon the Swing Line
Lender’s demand therefor, and until such time as such Lender makes the required
payment, the Swing Line Lender shall be deemed to continue to have outstanding
Swing Line Loans in the amount of such unpaid Participation Interest for all
purposes of the Loan Documents other than those provisions requiring the other
Lenders to purchase a participation therein. 
Further, such Lender shall be deemed to have assigned any and all
payments made of principal and interest on its Loans, and any other amounts due
to it hereunder to the Swing Line Lender to fund Swing Line Loans in the amount
of the Participation Interest in Swing Line Loans that such Lender failed to
purchase pursuant to this Section 2.01(d)(vi) until such amount has been
purchased (as a result of such assignment or otherwise).

 

Section
2.02  Notice of Borrowings.

 

(a)           Borrowings Other Than Swing Line Loans.  Except in the case of Swing Line Loans and
L/C Borrowings, the Borrower shall give the Administrative Agent a Notice of
Borrowing not later than 1:00 P.M. on (i) the Business Day immediately
preceding each Base Rate Borrowing and (ii) the third Business Day before each
Eurodollar Borrowing (unless the Borrower wishes to request an Interest Period
for such Borrowing other than one, two, three or six months in duration as
provided in the definition of “Interest Period”, in which case on the
fourth Business Day before each such Eurodollar Borrowing), specifying:

 

(i)            the date
of such Borrowing, which shall be a Business Day;

 

(ii)           the
aggregate amount of such Borrowing;

 

(iii)          the
Class and initial Type of the Loans comprising such Borrowing; and

 

(iv)          in the case
of a Eurodollar Borrowing, the duration of the initial Interest Period
applicable thereto, subject to the provisions of the definition of Interest
Period and to Section 2.06(a); and

 

(v)           the
location (which must be in the United States) and number of the Borrower’s
account to which funds are to be disbursed, which shall comply with the
requirements of Section 2.03.

 

If the duration of the initial Interest Period is not
specified with respect to any requested Eurodollar Borrowing, then the Borrower
shall be deemed to have selected an initial Interest Period of one month,
subject to the provisions of the definition of Interest Period and to Section
2.06(a).

 

(b)           Swing Line Borrowings.  The Borrower shall request a Swing Line Loan
by written notice (or telephone notice promptly confirmed in writing)
substantially in the form of Exhibit A-4 hereto (a “Swing Line Loan
Request”) to the Swing Line Lender and the Administrative Agent not later
than 1:30 P.M. on the Business Day of the requested Swing Line Loan.  Each such notice shall be irrevocable and
shall specify (i) that a Swing Line Loan is requested, (ii) the date of the
requested Swing Line Loan (which shall be a Business Day) and (iii) the
principal amount of the Swing Line Loan requested.  Each Swing Line Loan shall be made as a Base
Rate Loan and, subject to Section 2.01(d)(ii), shall have such maturity
date as agreed to by the Swing Line Lender and the Borrower upon receipt by the
Swing Line Lender of the Swing Line Loan Request from the Borrower.

 

(c)           L/C Borrowings.  Each L/C Borrowing shall be made as specified
in Section 2.05(f)(iv) without the necessity of a Notice of Borrowing.

 

49

 

Section
2.03  Notice to Lenders; Funding of Loans.

 

(a)           Notice to Lenders.  If the Borrower has requested an Interest
Period of nine or twelve months in duration, the Administrative Agent shall
give prompt notice of such request to the Lenders and determine whether the
requested Interest Period is acceptable to all of them.  Not later than 2:00 P.M. on the third
Business Day before the requested date of such a Eurodollar Borrowing, the
Administrative Agent shall notify the Borrower (which notice may be by
telephone) whether or not the requested interest Period has been consented to
by all the Lenders.  Upon receipt of a
Notice of Borrowing, the Administrative Agent shall promptly notify each Lender
of such Lender’s ratable share (if any) of the Borrowing referred to therein,
and such Notice of Borrowing shall not thereafter be revocable by the Borrower.

 

(b)           Funding of Loans.

 

(i)            Not later
than 1:00 P.M. on the date of each Borrowing (other than a Swing Line Borrowing
and a L/C Borrowing), each Lender participating therein shall make available its
share of such Borrowing, in Federal or other immediately available funds, to
the Administrative Agent at the Administrative Agent’s Office.  Unless the Administrative Agent determines
that any applicable condition specified in Article IV has not been satisfied,
the Administrative Agent shall make the funds so received available to the
Borrower in like funds as received by the Administrative Agent either by (i)
crediting the account of the Borrower on the books of Bank of America with the
amount of such funds or (ii) in each case in accordance with instructions
provided to (and reasonably acceptable to) the Administrative Agent, wire
transfer of such funds to such other account within the continental United
States as may be specified for such purpose from time to time by the Borrower
to the Administrative Agent or as may have been otherwise specified by the
Borrower in the applicable Notice of Borrowing or, if a Borrowing shall not
occur on such date because any condition precedent herein shall not have been
met, promptly return the amounts received from the Lenders in like funds,
without interest.

 

(ii)           Not later
than 3:00 P.M. on the date of each Swing Line Borrowing, the Swing Line Lender
shall, unless the Administrative Agent shall have notified the Swing Line
Lender that any applicable condition specified in Article IV has not
been satisfied, make available the amount of such Swing Line Borrowing, in
Federal or other immediately available funds, to the Borrower at the Swing Line
Lender’s address referred to in Section 10.02.

 

(iii)          Not
later than 1:00 P.M. on the date of each L/C Borrowing, each Revolving Lender
shall make available its share of such Borrowing, in Federal or other
immediately available funds, to the Administrative Agent at the Administrative
Agent’s Office.  Unless the
Administrative Agent determines that any applicable condition specified in Article
IV has not been satisfied (other than the delivery of a Notice of
Borrowing), the Administrative Agent shall remit the funds so received to the
L/C Issuer which has issued Letters of Credit having outstanding Unreimbursed
Amounts as contemplated by Section 2.05(f)(v).

 

(c)           Funding by the Administrative Agent in Anticipation
of Amounts Due from the Lenders. 
Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
to the Administrative Agent on the date of such Borrowing in accordance with subsection
(b) of this Section 2.03, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount.  If and to the
extent that such Lender shall not have so made such share available to the
Administrative Agent, such Lender and the Borrower severally agree to

 

50

 

repay to the Administrative Agent forthwith on demand
such corresponding amount, together with interest thereon for each day from the
date such amount is made available to the Borrower until the date such amount
is repaid to the Administrative Agent at (i) a rate per annum equal to the
higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.06, in the case of the Borrower, and (ii) the
Federal Funds Rate, in the case of such Lender. 
If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender’s Loan
included in such Borrowing for purposes of this Agreement.

 

(d)           Obligations of Lenders Several.  The obligations of the Lenders hereunder to
make Loans and to purchase Participation Interests in Letters of Credit and
Swing Line Loans are several and not joint. 
The failure of any Lender to make a Loan required to be made by it as
part of any Borrowing hereunder or to fund and Participation Interest shall not
relieve any other Lender of its obligation, if any, hereunder to make any Loan
on the date of such Borrowing or fund any such Participation Interest, but no
Lender shall be responsible for the failure of any other Lender to make the
Loan to be made by such other Lender on such date of Borrowing or fund its
Participation Interest.

 

(e)           Failed Loans.  If any Lender shall fail to make any Loan (a
“Failed Loan”) which such Lender is otherwise obligated hereunder to
make to the Borrower on the date of Borrowing thereof, and the Administrative
Agent shall not have received notice from the Borrower or such Lender that any
condition precedent to the making of the Failed Loan has not been satisfied,
then, until such Lender shall have made or be deemed to have made (pursuant to
the last sentence of this subsection (e)) the Failed Loan in full or the
Administrative Agent shall have received notice from the Borrower or such
Lender that any condition precedent to the making of the Failed Loan was not
satisfied at the time the Failed Loan was to have been made, whenever the
Administrative Agent shall receive any amount from the Borrower for the account
of such Lender, (i) the amount so received (up to the amount of such Failed
Loan) will, upon receipt by the Administrative Agent, be deemed to have been
paid to the Lender in satisfaction of the obligation for which paid, without
actual disbursement of such amount to the Lender, (ii) the Lender will be
deemed to have made the same amount available to the Administrative Agent for
disbursement as a Loan to the Borrower (up to the amount of such Failed Loan)
and (iii) the Administrative Agent will disburse such amount (up to the amount
of the Failed Loan) to the Borrower or, if the Administrative Agent has
previously made such amount available to the Borrower on behalf of such Lender
pursuant to the provisions hereof, reimburse itself (up to the amount of the
amount made available to the Borrower); provided, however, that
the Administrative Agent shall have no obligation to disburse any such amount
to the Borrower or otherwise apply it or deem it applied as provided herein
unless the Administrative Agent shall have determined in its sole discretion
that to so disburse such amount will not violate any Law, rule, regulation or
requirement applicable to the Administrative Agent.  Upon any such disbursement by the
Administrative Agent, such Lender shall be deemed to have made a Base Rate Loan
of the same Class as the Failed Loan to the Borrower in satisfaction, to the
extent thereof, of such Lender’s obligation to make the Failed Loan.

 

Section
2.04  Evidence of Loans.

 

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

 

(b)           Administrative Agent Records.  The Administrative Agent shall maintain
accounts in which it will record (i) the amount of each Loan made hereunder,
the Class and Type of each Loan made and the Interest Period, if any,
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the

 

51

 

amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender’s share thereof.

 

(c)           Evidence of Indebtedness.  The entries made in the accounts maintained
pursuant to subsections (a) and (b) of this Section 2.04
shall be prima facie evidence absent demonstrable error of the existence and
amounts of the obligations therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligations of
the Borrower to repay the Loans in accordance with their terms.

 

(d)           Notes. 
Notwithstanding any other provision of this Agreement, if any Lender
shall request and receive a Note or Notes as provided in Section 10.07
or otherwise, then the Loans of such Lender shall be evidenced by a single
Revolving Note, Term B Note or Second Lien Note, as applicable, in each case,
substantially in the form of Exhibit B-1, B-2 or B-3, as
applicable, payable to the order of such Lender for the account of its
Applicable Lending Office in an amount equal to the aggregate unpaid principal
amount of such Lender’s Revolving, Term B, or Second Lien Loans, as applicable.  If requested by the Swing Line Lender, the
Swing Line Loans shall be evidenced by a single Swing Line Note, substantially
in the form of Exhibit B-6, payable to the order of the Swing Line
Lender in an amount equal to the aggregate unpaid principal amount of the Swing
Line Loans.

 

(e)           Note Endorsements.  Each Lender having one or more Notes shall
record the date, amount, Class and Type of each Loan made by it and the date
and amount of each payment of principal made by the Borrower with respect
thereto, and may, if such Lender so elects in connection with any permitted
transfer or enforcement of any Note, endorse on the reverse side or on the
schedule, if any, forming a part thereof appropriate notations to evidence the
foregoing information with respect to each outstanding Loan evidenced thereby; provided
that the failure of any Lender to make any such recordation or endorsement
shall not affect the obligations of the Borrower hereunder or under any such
Note.  Each Lender is hereby irrevocably
authorized by the Borrower so to endorse each of its Notes and to attach to and
make a part of each of its Notes a continuation of any such schedule as and
when required.

 

Section
2.05  Letters of Credit.

 

(a)           Existing Letters of Credit.  On the Closing Date, each L/C Issuer that has
issued an Existing Letter of Credit shall be deemed, without further action by
any party hereto, to have sold to each Revolving Lender, and each such
Revolving Lender shall be deemed, without further action by any party hereto,
to have purchased from each such L/C Issuer, without recourse or warranty, an
undivided participation interest in such Existing Letter of Credit and the
related L/C Obligations in the proportion its Revolving Commitment Percentage
bears to the Revolving Committed Amount (although any fronting fee payable
under Section 2.11 shall be payable directly to the Administrative Agent
for the accounting of each applicable L/C Issuer, and the Lenders (other than
the applicable L/C Issuer) shall have no right to receive any portion of such
fronting fee) and any security therefore or guaranty pertaining thereto.  On and after the Closing Date, each Existing
Letter of Credit shall constitute a Letter of Credit for all purposes hereof.

 

(b)           Additional Letters of Credit.  Subject to the terms and conditions set forth
herein, (i) each L/C Issuer agrees, in reliance upon the agreements of the
other Revolving Lenders set forth in this Section 2.05, (A) from time to
time on any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue Letters of Credit for the account,
and upon the request, of the Borrower or one of more of its Subsidiaries and in
support of (x) trade obligations of the Borrower and/or its Subsidiaries, which
shall be payable at sight in Dollars (each such letter of credit, a “Trade
Letter of Credit” and, collectively, the “Trade Letters of Credit”)
and (y) such other obligations of the Borrower

 

52

 

incurred for its general
corporate purposes (each such letter of credit, a “Standby Letter of Credit”
and, collectively, the “Standby Letters of Credit”), and to amend or
extend  Letters of Credit
previously issued by it, in accordance with subsection (d) below, and
(B) to honor drawings under its Letters of Credit, and (ii) each Revolving
Lender severally agrees to participate in Letters of Credit issued for the
account of the Borrower or its Subsidiaries and any drawing thereunder in
accordance with the provisions of subsection (f) below; provided
that, immediately after each Letter of Credit is issued, (i) the aggregate
amount of the L/C Obligations shall not exceed the L/C Sublimit, (ii) the
Revolving Outstandings shall not exceed the Revolving Committed Amount and
(iii) with respect to each individual Revolving Lender, the aggregate
outstanding principal amount of the Revolving Lender’s Revolving Loans plus its
Participation Interests in outstanding L/C Obligations plus its (other than the
Swing Line Lender’s) Participation Interests in outstanding Swing Line Loans
shall not exceed such Revolving Lender’s Revolving Commitment Percentage of the
Revolving Committed Amount.  Each request
by the Borrower or a Subsidiary for the issuance or amendment of a Letter of Credit
shall be deemed to be a representation by the Borrower and such Subsidiary that
the issuance or amendment of such Letter of Credit complies with the conditions
set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during the
period specified in clause (i)(A) above, obtain Letters of Credit to
replace Letters of Credit that have expired or that have been drawn upon and
reimbursed.

 

(c)           Certain Limitations on Issuances of Letters of Credit.

 

(i)            No L/C
Issuer shall issue any Letter of Credit, if (A) subject to subsection (d)
below with respect to Auto-Extension Letters of Credit, the expiry date of such
requested Letter of Credit would occur more than twelve months after the date
of issuance or last extension, unless the Required Revolving Lenders have
approved such expiry date, (B) the expiry date of such requested letter of
Credit would occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date or (C) such Letter of Credit is to be
used for any purpose other than for its general corporate purposes unless the
Required Revolving Lenders have consented thereto.

 

(ii)           No L/C
Issuer shall be under any obligation to issue any Additional Letter of Credit
if: (A) any order, judgment or decree of any Governmental Authority shall by
its terms purport to enjoin or restrain the L/C Issuer from issuing such
Additional Letter of Credit, or any Law applicable to such L/C Issuer or any
request or directive (whether or not having a force of Law) from any
Governmental Authority with jurisdiction over such L/C Issuer shall prohibit,
or request that such L/C Issuer refrain from, the issuance of letters of credit
generally or such Additional Letter of Credit in particular or shall impose
upon such L/C Issuer with respect to such Additional Letter of Credit any
restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise
compensated hereunder) not in effect on the Closing Date, or shall impose upon
such L/C Issuer any unreimbursed loss, cost or expense which was not applicable
on the Closing Date and which such L/C Issuer in good faith deems material to
it; (B) the issuance of such Additional Letter of Credit shall violate any Laws
or one ore more policies of such L/C Issuer; (C) except as otherwise agreed by
the Administrative Agent and the applicable L/C issuer, such Letter of Credit
is in an initial face amount less than $100,000, in the case of a Trade Letter
of Credit, or $250,000, in the case of a Standby Letter of Credit; (D) such
Letter of Credit is to be denominated in a currency other than Dollars; or (E)
a default of any Revolving Lender’s obligations to fund under subsection
(f)(iv) or (vi) below exists or any Revolving Lender is at such time
a Defaulting Lender hereunder, unless the L/C Issuer has entered into
satisfactory arrangements with the Borrower or such Revolving Lender to
eliminate the L/C Issuer’s risk with respect to such Revolving Lender.

 

53

 

(iii)          No
L/C issuer shall amend any Letter of Credit if the L/C Issuer would not be
permitted at such time to issue such Letter of Credit in its amended form under
the terms hereof.

 

(iv)          No L/C
issuer shall be under any obligation to amend any Letter of Credit if (A) the
L/C Issuer would have no obligation at such time to issue such Letter of Credit
in its amended form under the terms hereof, or (B) the beneficiary of such
Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

 

(d)           Procedures for Issuance and Amendment of Letters of
Credit; Auto-Extension Letters of Credit.

 

(i)            Each
Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the applicable L/C Issuer (with a copy to
the Administrative Agent) substantially in the form of Exhibit A-3
hereto (a “Letter of Credit Request”), appropriately completed and
signed by a Responsible Officer of the Borrower.  Such Letter of Credit Request must be
received by the L/C Issuer and the Administrative Agent not later than 11:00
A.M. at least two Business Days (or such later date and time as the Administrative
Agent and the L/C issuer may agree in a particular instance in their sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be.  In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Request
shall specify in form and detail reasonably satisfactory to the L/C
Issuer:  (A) the proposed issuance date
of the requested Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the L/C Issuer may require. 
In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Request shall specify in form and detail
satisfactory to the L/C Issuer:  (A) the
Letter of Credit to be amended; (B) the proposed date of amendment thereof
(which shall be a Business Day); (C) the nature of the proposed amendment; and
(D) such other matters as the L/C Issuer may require.  If requested by the applicable L/C Issuer,
the Borrower shall also submit a letter of credit application on such L/C
Issuer’s standard form in connection with any request for the issuance or
amendment of a Letter of Credit. 
Additionally, the Borrower shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any L/C Documents,
as the L/C Issuer or the Administrative Agent may require.

 

(ii)           Promptly
after receipt of any Letter of Credit Request, the L/C Issuer will confirm with
the Administrative Agent (by telephone or in writing) that the Administrative
Agent has received a copy of such Letter of Credit Request from the Borrower
and, if not, the L/C Issuer will provide the Administrative Agent with a copy
thereof.  Unless the L/C Issuer has
received written notice from any Revolving Lender, the Administrative Agent or
any Loan Party, at least one Business Day prior to the requested date of
issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article IV shall not then be
satisfied, then, subject to the terms and conditions thereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of the
Borrower (or the applicable Subsidiary)or enter into the applicable amendment,
as the case may be, in each case in accordance with the L/C Issuer’s usual and
customary business practices.

 

54

 

(iii)          If
the Borrower so requests in any applicable Letter of Credit Request, the L/C Issuer
may, in its sole and absolute discretion, agree to issue a Letter of Credit
that has automatic extension provisions (each, an “Auto-Extension Letter of
Credit”); provided that any such Auto-Extension Letter of Credit
must permit the L/C Issuer to prevent any such extension at least once in each
twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
(the “Non-Extension Notice Date”) in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the L/C Issuer,
the Borrower shall not be required to make a specific request to the L/C Issuer
for any such extension.  Once an
Auto-Extension Letter of Credit has been issued, the Revolving Lenders shall be
deemed to have authorized (but may not require) the L/C Issuer to permit the
extension of such Letter of Credit at any time to a date not later than the
Letter of Credit Expiration Date; provided, however, that the L/C
Issuer shall not permit any such extension if (A) the L/C Issuer has determined
that it would not be permitted, or would have no obligation, at such time to
issue such Letter of Credit in its revised form (as extended) under the terms hereof
(by reason of the provisions of the provisions of subsection (c)(i) or (ii)
above or otherwise) or (B) it has received notice (which may be by telephone or
in writing) on or before the day that is five Business Days before the
Non-Extension Notice Date (x) from the Administrative Agent that the Required
Revolving Lenders have elected not to permit such extension or (y) from the
Administrative Agent, any Revolving Lender or any Loan Party that one or more
of the applicable conditions specified in Section 4.03 is not then
satisfied, and in each such case directing the L/C issuer not to permit such
extension.

 

(iv)          If any
Letter of Credit contains provisions providing for automatic reinstatement of
the stated amount after any drawing thereunder, (A) unless otherwise directed
by the L/C issuer to permit such reinstatement, and (B) the Administrative
Agent and the Revolving Lenders hereby authorize and direct the L/C issuer to
permit such automatic reinstatement, whether or not a Default then exists,
unless the L/C Issuer has received a notice (which may be by telephone or in
writing) on or before the date that is two Business Days before the
reinstatement date from the Administrative Agent, the Required Revolving
Lenders or any Loan Party that one or more of the applicable conditions
specified in Section 4.03 is not then satisfied and directing the L/C
issuer to cease permitting such automatic reinstatement of such Letter of
Credit.

 

(v)           Promptly
after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof,
the L/C Issuer will also deliver to the Borrower and the Administrative Agent a
true and complete copy of such Letter of Credit or amendment.

 

(e)           Purchase and Sale of Letter of Credit Participations.  Immediately upon the issuance by an L/C
Issuer of an Additional Letter of Credit, such L/C Issuer shall be deemed,
without further action by any party hereto, to have sold to each Revolving
Lender, and each Revolving Lender shall be deemed, without further action by
any party hereto, to have purchased from such L/C Issuer, without recourse or
warranty, an undivided participation interest in such Letter of Credit and the
related L/C Obligations in the proportion its Revolving Commitment Percentage
bears to the Revolving Committed Amount (although any fronting fee payable
under Section 2.11 shall be payable directly to the Administrative Agent
for the account of the applicable L/C Issuer, and the Lenders (other than such
L/C Issuer) shall have no right to receive any portion of any such fronting
fee) and any security therefor or guaranty pertaining thereto.  Upon any change in the Revolving Commitments
pursuant to Section 2.10(a) or Section 10.07, there shall be an
automatic adjustment to the Participation Interests in all outstanding Letters
of Credit (including all Existing Letters of Credit, if any) and all L/C
Obligations to reflect the adjusted Revolving Commitments of the assigning and
assignee Lenders or of all Lenders having Revolving Commitments, as the case
may be.

 

55

 

(f)            Drawings and Reimbursements; Funding of
Participations.

 

(i)            Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the applicable L/C Issuer shall notify the
Borrower and the Administrative Agent thereof and shall determine in accordance
with the terms of such Letter of Credit whether such drawing should be honored.  If the L/C Issuer determines that any such
drawing shall be honored, such L/C Issuer shall make available to such
beneficiary in accordance with the terms of such Letter of Credit the amount of
the drawing and shall notify the Borrower and the Administrative Agent as to
the amount to be paid as a result of such drawing and the payment date (each
such date, an “Honor Date”).

 

(ii)           The
Borrower shall be irrevocably and unconditionally obligated forthwith to
reimburse each L/C Issuer through the Administrative Agent for any amounts paid
by such L/C Issuer upon any drawing under any Letter of Credit, together with
any and all reasonable charges and expenses which the L/C Issuer may pay or
incur relative to such drawing.  Such
reimbursement payment shall be due and payable (i) at or before 1:00 P.M. on
the date the Honor Date if the L/C Issuer notifies the Borrower of such drawing
at or before 12:00 P.M. on the Honor Date or (ii) at or before 1:00 P.M. on the
next succeeding Business Day if such notice if given after 12:00 P.M. on the Honor
Date; provided that no payment otherwise required by this sentence to be
made by the Borrower at or before 1:00 P.M. on any day shall be overdue
hereunder if arrangements for such payment by virtue of a Borrowing of
Revolving Loans or a Swing Line Loan or other arrangements satisfactory to the
applicable L/C Issuer, in its reasonable discretion, shall have been made by
the Borrower at or before 1:00 P.M. on such day and such payment is actually
made at or before 3:00 P.M. on such day. 
In addition, the Borrower agrees to pay to the L/C Issuer interest,
payable on demand, on any and all amounts not paid by the Borrower to the L/C
Issuer when due under this subsection (f)(ii), for each day from and
including the date when such amount becomes due to but excluding the date such
amount is paid in full, whether before or after judgment, at a rate per annum
equal to the sum of 2% plus the rate applicable to Revolving Base Rate Loans
for such day.  Each reimbursement and other
payment to be made by the Borrower pursuant to this clause (ii) shall be
made to the L/C Issuer in Federal or other funds immediately available to it at
its address referred to in Section 10.02.

 

(iii)          Subject
to the satisfaction of all applicable conditions set forth in Article IV,
the Borrower may, at its option, utilize the Swing Line Commitment or the
Revolving Commitments, or make other arrangements for payment satisfactory to
the L/C Issuer, for the reimbursement of all L/C Disbursements as required by clause
(ii) above.

 

(iv)          With respect
to any L/C Disbursement that have not been reimbursed by the Borrower when due
under clauses (ii) and (iii) above (an “Unreimbursed Amount”),
the Administrative Agent shall promptly notify each Revolving Lender of the
Honor Date, the amount of the Unreimbursed Amount and the amount of such
Revolving Lender’s pro-rata share thereof such Revolving Lender’s pro-rata
share of such unreimbursed L/C Disbursement (determined by the proportion its
Revolving Commitment Percentage bears to the aggregate Revolving Committed
Amount).  In such event, the Borrower
shall be deemed to have requested a Borrowing (a “L/C Borrowing”) of
Revolving Base Rate Loans to be disbursed on the Honor Date in an aggregate
amount equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.01(a), but subject to the amount of the
unutilized portion of the Revolving Commitments and the conditions set forth in
Section 4.03 (other than the delivery of a Notice of Borrowing), and
each such Revolving Lender hereby agrees to make a Revolving Loan (which shall
be initially funded as a Base Rate Loan) in an amount equal to such Lender’s
Revolving Commitment Percentage of the Unreimbursed Amount outstanding on the
date notice

 

56

 

is given.  Any such notice given by a L/C Issuer or the
Administrative Agent given pursuant to this clause (iv) may be given by
telephone if immediately confirmed in writing; provided that the lack of such
an immediate confirmation shall not affect the conclusiveness or binding effect
of such notice.

 

(v)           Each
Revolving Lender (including any Revolving Lender acting as L/C Issuer in
respect of any Unreimbursed Amount) shall, upon any notice from the
Administrative Agent pursuant to clause (iv) above, make the amount of
its Revolving Loan available to the Administrative Agent, in Dollars in Federal
or other immediately available funds same day funds, at the Administrative
Agent’s Office, not later than 1:00 P.M. on the Business Day specified in such
notice, whereupon, subject to clause (vi) below, each Revolving Lender
that so makes funds available shall be deemed to have made a Revolving Base
Rate Loan to the Borrower in such amount. 
The Administrative Agent shall remit the funds so received to the
applicable L/C Issuer in satisfaction of the Unreimbursed Amount to the extent
of such funds.

 

(vi)          With
respect to any Unreimbursed Amount that is not fully refinanced by a L/C
Borrowing pursuant to clauses (iv) and (v) above because the
conditions set forth in Section 4.03 cannot be satisfied or for any
other reason, the L/C Issuer shall promptly notify the Administrative Agent,
and the Administrative Agent shall promptly notify each Revolving Lender (other
than the relevant L/C Issuer), and each such Revolving Lender shall promptly
and unconditionally pay to the Administrative Agent, for the account of such
L/C Issuer, such Revolving Lender’s pro-rata share of such Unreimbursed Amount
(determined by the proportion its Revolving Commitment Percentage bears to the
aggregate Revolving Committed Amount) in Dollars in Federal or other
immediately available funds.  Such
payment from the Revolving Lenders shall be due (i) at or before 1:00 P.M. on
the date the Administrative Agent so notifies a Revolving Lender, if such
notice is given at or before 10:00 A.M. on such date or (ii) at or before 10:00
A.M. on the next succeeding Business Day, together with interest on such amount
for each day from and including the date of such drawing to but excluding the
day such payment is due from such Revolving Lender at the Federal Funds Rate
for such day (which funds the Administrative Agent shall promptly remit to the
applicable L/C Issuer).  Each payment by
a Revolving Lender to the Administrative Agent for the account of an L/C Issuer
in respect of an Unreimbursed Amount shall constitute a payment in respect of
its Participation Interest in related Letter of Credit purchased pursuant to subsection
(e) above.  The failure of any
Revolving Lender to make available to the Administrative Agent for the account
of an L/C Issuer its pro-rata share of any Unreimbursed Amount shall not
relieve any other Revolving Lender of its obligation hereunder to make
available to the Administrative Agent for the account of such L/C Issuer its
pro-rata share of any payment made under any Letter of Credit on the date
required, as specified above, but no such Lender shall be responsible for the
failure of any other Lender to make available to the Administrative Agent for
the account of the L/C Issuer such other Lender’s pro-rata share of any such
payment.  Upon payment in full of all
amounts payable by a Lender under this clause (vi), such Lender shall be
subrogated to the rights of the L/C Issuer against the Borrower to the extent
of such Lender’s pro-rata share of the related L/C Obligation so paid
(including interest accrued thereon).

 

(vii)         Each
Revolving Lender’s obligation to make Revolving Loans pursuant to clause
(iv) above and to make payments in respect of its Participation Interests
in Unreimbursed Amounts pursuant to clause (vi) above shall be absolute
and unconditional and shall not be affected by any circumstance,
including:  (A) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default; or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided,

 

57

 

however,
that each Revolving Lender’s obligation to make Revolving Loans as a part of a
L/C Borrowing pursuant to clause (iv) above is subject to the conditions
set forth in Section 4.03 (other than delivery by the Borrower of a Notice
of Borrowing).  No such making by a
Revolving Lender of a Revolving Loan or a payment by a Revolving Lender of an
amount in respect of its Participation Interest in Unreimbursed Amounts shall
relieve or otherwise impair the obligation of the Borrower to reimburse the L/C
issuer for the amount of any payment made by the L/C Issuer under any Letter of
Credit, together with interest as provided herein.

 

(viii)        If
any Revolving Lender fails to make available to the Administrative Agent for
the account of an L/C Issuer any amount required to be paid by such Revolving
Lender pursuant to the foregoing provisions of this subsection (f) by
the time specified therefor, the applicable L/C Issuer shall be entitled to
recover from such Revolving Lender (acting through the Administrative Agent),
on demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the applicable L/C Issuer at a rate per annum equal to the Federal Funds
Rate for such day.  Any payment made by
any Lender after 3:00 P.M. on any Business Day shall be deemed for purposes of
the preceding sentence to have been made on the next succeeding Business Day A
certificate of the applicable L/C Issuer submitted to any Revolving Lender
(through the Administrative Agent) with respect to any amounts owing under this
clause (viii) shall be conclusive absent manifest error.

 

(g)           Repayment of Funded Participations in Respect of
Drawn Letters of Credit.

 

(i)            Whenever
the Administrative Agent receives a payment of an L/C Obligation as to which
the Administrative Agent has received for the account of an L/C Issuer any
payments from the Revolving Lenders pursuant to subsection (f) above
(whether directly from the Borrower or otherwise, including proceeds of cash
collateral applied thereto by the Administrative Agent), the Administrative
Agent shall promptly pay to each Revolving Lender which has paid its pro-rata
share thereof an amount equal to such Lender’s pro-rata share of the amount
thereof (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which the payments from the Revolving Lenders were
received) in the same funds as those received by the Administrative Agent.

 

(ii)           If any
payment received by the Administrative Agent for the account of an L/C issuer
pursuant to clause (i) above is required to be returned under any of the
circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the L/C issuer in its discretion), each Revolving
Lender shall pay to the Administrative Agent for the account of such L/C Issuer
its pro-rata share thereof (determined by the proportion its Revolving
Commitment Percentage bears to the aggregate Revolving Committed Amount) on
demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Revolving Lender, at a rate
per annum equal to the Federal Funds Rate for such day.

 

(h)           Obligations Absolute.  The obligations of the Borrower under Section
2.05(f) above shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including, without limitation, the following
circumstances:

 

(i)            any lack
of validity or enforceability of such Letter of Credit, this Agreement or any
other Loan Document;

 

58

 

(ii)           any
amendment or waiver of or any consent to departure from all or any of the
provisions of this Agreement, any Letter of Credit or any other Loan Document;

 

(iii)          the
use which may be made of the Letter of Credit by, or any acts or omission of, a
beneficiary of a Letter of Credit (or any Person for whom the beneficiary may
be acting);

 

(iv)          the
existence of any claim, counterclaim, set-off, defense or other rights that the
Borrower or any Subsidiary may have at any time against a beneficiary or any
transferee of a Letter of Credit (or any Person for whom the beneficiary or
transferee may be acting), any L/C Issuer or any other Person, whether in
connection with this Agreement or any Letter of Credit or any document related
hereto or thereto or any unrelated transaction;

 

(v)           any draft,
demand, certificate, statement or any other document presented under a Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever, or any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under such Letter of Credit;

 

(vi)          any payment
by the L/C Issuer under a Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of such Letter of
Credit;

 

(vii)         any
payment made by the L/C Issuer under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for
the benefit of creditors, liquidator, receiver or other representative of or successor
to any beneficiary or any transferee of such Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Law; or

 

(viii)        any
other act or omission to act or delay of any kind by any L/C Issuer or any
other Person or any other event or circumstance whatsoever that might, but for
the provisions of this subsection (vii), constitute a defense to, or a
legal or equitable discharge of, the Borrower’s or any Subsidiary’s obligations
hereunder.

 

The Borrower shall promptly examine a copy of each
Letter of Credit and each amendment thereto that is delivered to it and, in the
event of any claim of noncompliance with the Borrower’s instructions or other
irregularity, the Borrower will immediately notify the L/C Issuer.  The Borrower shall be conclusively deemed to
have waived any such claim against the L/C Issuer and its correspondents unless
such notice is given as aforesaid.

 

(i)            Role of L/C Issuers; Reliance.  Each Revolving Lender and the Borrower agree
that, in determining whether to pay under any Letter of Credit, the relevant
L/C Issuer shall not have any responsibility to obtain any document (other than
any sight draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document.  None of the L/C Issuer, any
Agent-Related Person nor any of the respective correspondents, participants or
assignees of the L/C Issuer shall be liable to any Lender for: (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of bad faith, gross negligence or willful misconduct; or
(iii) the due execution, effectiveness, validity or enforceability of any
document or instrument related to any Letter of Credit or Letter of Credit
Request.  The Borrower hereby assumes all
risks of the acts or omissions of any

 

59

 

beneficiary or transferee with respect to its use of
any Letter of Credit; provided, however, that this assumption is
not intended to, and shall not, preclude the Borrower’s pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement.  None of the L/C
Issuer, any Agent-Related Person, nor any of the respective correspondents,
participants or assignees of the L/C Issuer, shall be liable or responsible for
any of the matters described in clauses (i) through (viii) of subsection
(h) of this Section 2.05; provided, however, that
anything in such clauses to the contrary notwithstanding, the Borrower may have
a claim against the L/C Issuer, and the L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by the L/C Issuer’s bad faith, willful misconduct or gross
negligence or the L/C Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit.  In furtherance and not in
limitation of the foregoing, the L/C Issuer may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason.  Each L/C Issuer shall be entitled (but not
obligated) to rely, and shall be fully protected in relying, on the
representation and warranty by the Borrower set forth in the last sentence of Section
4.03 to establish whether the conditions specified in paragraphs (b)
and (c) of Section 4.03 are met in connection with any issuance
or extension of a Letter of Credit.  Each
L/C Issuer shall be entitled to rely, and shall be fully protected in relying,
upon advice and statements of legal counsel, independent accountants and other
experts selected by such L/C Issuer and upon any Letter of Credit, draft,
writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopier, telex or teletype message, statement, order or
other document believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary
unless the beneficiary and the Borrower shall have notified such L/C Issuer
that such documents do not comply with the terms and conditions of the Letter
of Credit.  Each L/C Issuer shall be
fully justified in refusing to take any action requested of it under this Section
2.05 in respect of any Letter of Credit unless it shall first have received
such advice or concurrence of the Required Revolving Lenders as it reasonably
deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Revolving Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take, or
omitting or continuing to omit, any such action.  Notwithstanding any other provision of this Section
2.05, each L/C Issuer shall in all cases be fully protected in acting, or
in refraining from acting, under this Section 2.05 in respect of any
Letter of Credit in accordance with a request of the Required Revolving
Lenders, and such request and any action taken or failure to act pursuant
hereto shall be binding upon all Revolving Lenders and all future holders of
participations in such Letter of Credit.

 

(j)            Cash Collateral.  If the Borrower is required pursuant to the
terms of this Agreement or any other Loan Document to Cash Collateralize any
L/C Obligations, the Borrower shall deposit in an account (which may be the L/C
Cash Collateral Account under the Security Agreement) with the Senior
Collateral Agent an amount in cash equal to 105% of such L/C Obligations.  Such deposit shall be held by the Senior
Collateral Agent as collateral for the payment and performance of the L/C
Obligations.  The Senior Collateral Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account.  The
Senior Collateral Agent will, at the request of the Borrower, invest amounts
deposited in such account in Cash Equivalents; provided, however,
that (i) the Senior Collateral Agent shall not be required to make any
investment that, in its sole judgment, would require or cause the Senior
Collateral Agent to be in, or would result in any, violation of any Law, (ii)
such Cash Equivalents shall be subjected to a first priority perfected security
interest in favor of the

 

60

 

Senior Collateral Agent and (iii) if an Event of
Default shall have occurred and be continuing, the selection of such Cash
Equivalents shall be in the sole discretion of the Senior Collateral
Agent.  The Borrower shall indemnify the
Senior Collateral Agent for any losses relating to such investments in Cash
Equivalents.  Other than any interest or
profits earned on such investments, such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall be applied by the Senior Collateral Agent
to reimburse the L/C Issuers immediately for drawings under the applicable
Letters of Credit and, if the maturity of the Loans has been accelerated, to
satisfy the L/C Obligations.  If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of an Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower within three Business Days after all Events
of Default have been cured or waived.  If
the Borrower is required to provide an amount of cash collateral hereunder
pursuant to Section 2.08(a) or 2.09(b)(i), such amount (to the
extent not applied as aforesaid) shall be returned to the Borrower upon demand;
provided that, after giving effect to such return, (i) the aggregate
Revolving Outstandings would not exceed the Revolving Committed Amount and (ii)
no Default or Event of Default shall have occurred and be continuing.  If the Borrower is required to deposit an
amount of cash collateral hereunder pursuant to Section 2.09(b)(ii), (iii),
(iv) or (v), interest or profits thereon (to the extent not applied
as aforesaid) shall be returned to the Borrower after the full amount of such
deposit has been applied by the Senior Collateral Agent to reimburse the L/C
Issuer for drawings under Letters of Credit. 
The Borrower hereby pledges and assigns to the Senior Collateral Agent,
for its benefit and the benefit of the L/C Issuers and the Revolving Lenders,
the cash collateral account established hereunder (and all monies and
investments held therein) to secure all L/C Obligations and Revolving Loans.

 

(k)           Applicability of ISP98 and UCP.  Unless otherwise expressly agreed by the L/C
Issuer and the Borrower when a Letter of Credit is issued (including any such
agreement applicable to an Existing Letter of Credit), (i) the rules of
the ISP shall apply to each Standby Letter of Credit, and (ii) the rules
of the Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce at the time of issuance
shall apply to each Trade Letter of Credit.

 

(l)            Conflict with L/C Documents.  In the event of any conflict between this
Agreement and any L/C Document, this Agreement shall govern.

 

(m)          Letters of Credit Issued for Subsidiaries.  Notwithstanding that a Letter of Credit
issued or outstanding hereunder is in support of any obligations of, or is for
the account of, a Subsidiary, the Borrower shall be obligated to reimburse the
applicable L/C Issuer hereunder for any and all drawings under such Letter of
Credit.  The Borrower hereby acknowledges
that the issuance of Letters of Credit for the account of Subsidiaries inures
to the benefit of the Borrower, and that the Borrower’s business derives
substantial benefits from the businesses of such Subsidiaries.

 

(n)           Indemnification of L/C Issuers.

 

(i)            In
addition to its other obligations under this Agreement, the Borrower hereby
agrees to protect, indemnify, pay and save each L/C Issuer harmless from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable Attorney Costs) that such L/C Issuer
may incur or be subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of such L/C Issuer to honor
a drawing under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government
or Governmental Authority (all such acts or omissions, herein called “Government
Acts”); provided that such indemnity shall not be available to the
extent that such claims, demands, liabilities, damages, losses, costs, charges
and expenses are determined by a court of competent jurisdiction by final and
nonappealable

 

61

 

judgment to have
resulted from the bad faith, gross negligence or willful misconduct of such L/C
Issuer.

 

(ii)           In
furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by an L/C Issuer, under or
in connection with any Letter of Credit or the related certificates, if taken
or omitted in good faith, shall not put the L/C Issuer under any resulting
liability to the Borrower or any other Loan Party.  It is the intention of the parties that this
Agreement shall be construed and applied to protect and indemnify the L/C
Issuers against any and all risks involved in the issuance of any Letter of
Credit, all of which risks are hereby assumed by the Loan Parties, including,
without limitation, any and all risks, whether rightful or wrongful, of any
present or future Government Acts.  The
L/C Issuers shall not, in any way, be liable for any failure by the L/C Issuers
or anyone else to pay any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of the L/C Issuers.

 

(iii)          Nothing
in this subsection (n) is intended to limit the reimbursement obligation
of the Borrower contained in this Section 2.05.  The obligations of the Borrower under this subsection
(n) shall survive the termination of this Agreement.  No act or omission of any current or prior
beneficiary of a Letter of Credit shall in any way affect or impair the rights
of any L/C Issuer to enforce any right, power or benefit under this Agreement.

 

(iv)          Notwithstanding
anything to the contrary contained in this subsection (n), the Borrower
shall have no obligation to indemnify any L/C Issuer in respect of any
liability incurred by the L/C Issuer arising solely out of the gross negligence
or willful misconduct of the L/C Issuer, as determined by a court of competent
jurisdiction.  Nothing in this Agreement
shall relieve any L/C Issuer of any liability to the Borrower in respect of any
action taken by the L/C Issuer which action constitutes gross negligence or
willful misconduct of the L/C Issuer or a violation of the UCP or Uniform
Commercial Code, as applicable, as determined by a court of competent
jurisdiction.

 

(o)           Resignation of an L/C Issuer.  An L/C Issuer may resign at any time by
giving 60 days’ notice to the Administrative Agent, the Revolving Lenders and
the Borrower; provided, however, that any such resignation shall
not affect the rights or obligations of the L/C Issuer with respect to Letters
of Credit issued by it prior to such resignation.  Upon any such resignation, the Borrower shall
(within 60 days after such notice of resignation) either appoint a successor,
or terminate the unutilized L/C Commitment of such L/C Issuer; provided,
however, that, if the Borrower elects to terminate such unutilized L/C
Commitment, the Borrower may at any time thereafter that the Revolving
Commitments are in effect reinstate such L/C Commitment in connection with the
appointment of another L/C Issuer.  Upon
the acceptance of any appointment as an L/C Issuer hereunder by a successor L/C
Issuer, such successor shall succeed to and become vested with all the
interests, rights and obligations of the retiring L/C Issuer and the retiring
L/C Issuer shall be discharged from its obligations to issue Additional Letters
of Credit hereunder.  The acceptance of
any appointment as L/C Issuer hereunder by a successor L/C Issuer shall be
evidenced by an agreement entered into by such successor, in a form reasonably
satisfactory to the Borrower and the Administrative Agent, and, from and after
the effective date of such agreement, (i) such successor shall be a party
hereto and have all the rights and obligations of an L/C Issuer under this
Agreement and the other Loan Documents and (ii) references herein and in the
other Loan Documents to the “L/C Issuer” shall be deemed to refer to such successor
or to any previous L/C Issuer, or to such successor and all previous L/C
Issuers, as the context shall require. 
After the resignation of an L/C Issuer hereunder the retiring L/C Issuer
shall remain a party hereto and shall continue to have all the rights and
obligations of an L/C Issuer under this Agreement and the other Loan

 

62

 

Documents with respect to Letters of Credit issued by
it prior to such resignation but shall not be required to issue additional
Letters of Credit.

 

(p)           Reporting.  Each L/C Issuer will
report in writing to the Administrative Agent (i) on the first Business Day of
each week, the aggregate face amount of Letters of Credit issued by it and
outstanding as of the last Business Day of the preceding week, (ii) on or prior
to each Business Day on which such L/C Issuer expects to issue, amend, renew or
extend any Letter of Credit, the date of such issuance or amendment, and the
aggregate face amount of Letters of Credit to be issued, amended, renewed or
extended by it and outstanding after giving effect to such issuance, amendment,
renewal or extension (and such L/C Issuer shall advise the Administrative Agent
on such Business Day whether such issuance, amendment, renewal or extension occurred
and whether the amount thereof changed), (iii) on each Business Day on
which such L/C Issuer makes any L/C Disbursement, the date and amount of such
L/C Disbursement and (iv) on any Business Day on which the Borrower fails to
reimburse an L/C Disbursement required to be reimbursed to such L/C Issuer on
such day, the date and amount of such failure.

 

Section
2.06  Interest.

 

(a)           Rate Options Applicable to Loans.  Each Borrowing made prior to the Syndication
Date shall be comprised of Base Rate Loans or (except in the case of Swing Line
Loans, which shall be made and maintained as Base Rate Loans, and L/C
Borrowings, which shall be made initially as Base Rate Loans) Eurodollar Loans
with a one-month Interest Period (ending on the same date), as the Borrower may
request pursuant to Section 2.02. 
Each Borrowing made on or after the Syndication Date shall be comprised
of Base Rate Loans or (except in the case of Swing Line Loans, which shall be
made and maintained as Base Rate Loans) Eurodollar Loans, as the Borrower may
request pursuant to Section 2.02. 
Borrowings of more than one Type may be outstanding at the same time; provided,
however, that the Borrower may not request any Borrowing that, if made,
would result in an aggregate of more than ten separate Groups of Eurodollar
Loans being outstanding hereunder at any one time.  For this purpose, Loans having different
Interest Periods, regardless of whether commencing on the same date, shall be
considered separate Groups.  Interest
hereunder shall be due and payable in accordance with the terms hereof before
and after judgment and before and after the commencement of any proceeding
under any Debtor Relief Law.

 

(b)           Base Rate Loans.  Each Loan of a Class which is made as, or
converted into, a Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made as, or
converted into, a Base Rate Loan until it becomes due or is converted into a
Loan of any other Type, at a rate per annum equal to the Base Rate for such day
plus the then Applicable Margin.  Such
interest shall be payable in arrears on each Interest Payment Date and, with
respect to the principal amount of any Base Rate Loan converted to a Eurodollar
Loan, on the date such Base Rate Loan is so converted.  Any overdue principal of and, to the extent
permitted by Law, interest on any Base Rate Loan of any Class shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the Base Rate for such day plus the Applicable Margin for
Base Rate Loans of the same Class for such day.

 

(c)           Eurodollar Loans.  Each Eurodollar Loan of a Class shall bear
interest on the outstanding principal amount thereof, for each day during the
Interest Period applicable thereto, at a rate per annum equal to the sum of the
Adjusted Eurodollar Rate for such Interest Period plus the then Applicable
Margin.  Such interest shall be payable
for each Interest Period on each Interest Payment Date.  Any overdue principal of and, to the extent
permitted by Law, interest on any Eurodollar Loan of any Class shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the rate otherwise applicable to Eurodollar Loans of the
same Class for such day (or, if the

 

63

 

circumstances described in Section 3.02 shall
exist, at a rate per annum equal to the sum of 2% plus the Base Rate for such
day plus the Applicable Margin for Base Rate Loans of the same Class for such
day).

 

(d)           Determination and Notice of Interest Rates.  The Administrative Agent shall determine each
interest rate applicable to the Loans hereunder.  The Administrative Agent shall give prompt
notice to the Borrower and the participating Lenders of each rate of interest
so determined, and its determination thereof shall be conclusive in the absence
of manifest error.  Any notice with
respect to Eurodollar Loans shall, without the necessity of the Administrative
Agent so stating in such notice, be subject to the provisions of the definition
of “Applicable Margin” providing for adjustments in the Applicable
Margin applicable to such Loans after the beginning of the Interest Period
applicable thereto.  When during an
Interest Period any event occurs that causes an adjustment in the Applicable
Margin applicable to Loans to which such Interest Period is applicable, the
Administrative Agent shall give prompt notice to the Borrower and the Lenders
of such event and the adjusted rate of interest so determined for such Loans,
and its determination thereof shall be conclusive in the absence of manifest
error.

 

(e)           Default Interest.  Upon the occurrence and during the
continuance of an Event of Default under Section 8.01(a) or (f),
the principal of and, to the extent permitted by Law, interest on the Loans and
any other amounts owing herein or under the other Loan Documents shall bear
interest, payable on demand, at a per annum rate equal to (i) in the case of
principal of any Loan, the rate otherwise applicable to such Loan during such
period pursuant to this Section 2.06 plus 2.00% (without duplication of
any amount owing in respect of Base Rate Loans under the third sentence of Section
2.06(b) or in respect of Eurodollar Loans under the third sentence of Section
2.06(c)), (ii) in the case of interest on any Loan, the rate specified in
the third sentence of Section 2.06(b) in respect of Base Rate Loans, or
in the third sentence of Section 2.06(c) in respect of Eurodollar Loans,
and (iii) in the case of any other amount, if expressly provided for herein, at
the rate so provided and otherwise at the Base Rate plus the Applicable Margin
for Revolving Base Rate Loans plus 2.00%.

 

Section
2.07  Extension and Conversion.

 

(a)           Continuation and Conversion Options.  The Loans included in each Borrowing shall
bear interest initially at the type of rate allowed by Section 2.06 and
as specified by the Borrower in the applicable Notice of Borrowing.  Thereafter, the Borrower shall have the
option, on any Business Day on and after the Syndication Date, to elect to
change or continue the type of interest rate borne by each Group of Loans
(subject in each case to the provisions of Article III and subsection
2.07(d)), as follows:

 

(i)            if such
Loans are Base Rate Loans, the Borrower may elect to convert such Loans to
Eurodollar Loans as of any Business Day; and

 

(ii)           if such
Loans are Eurodollar Loans, the Borrower may elect to convert such Loans to
Base Rate Loans or elect to continue such Loans as Eurodollar Loans for an
additional Interest Period, subject to Section 3.05 in the case of any
such conversion or continuation effective on any day other than the last day of
the then current Interest Period applicable to such Loans.

 

Each such election shall be made by delivering a
notice, substantially in the form of Exhibit A-2 hereto (a “Notice of
Extension/Conversion”) (which may be by telephone if promptly confirmed in
writing, which notice shall not thereafter be revocable by the Borrower, to the
Administrative Agent not later than 12:00 Noon on the third Business Day before
the conversion or continuation selected in such notice is to be effective.  A Notice of Extension/Conversion may, if it
so specifies, apply to only a portion of the aggregate principal amount of the
relevant Group of Loans; provided that (i) such portion is allocated

 

64

 

ratably among the Loans comprising such Group and (ii)
the portion to which such Notice of Extension/Conversion applies, and the remaining
portion to which it does not apply, are each $2,000,000 or any larger multiple
of $500,000.

 

(b)           Contents of Notice of Extension/Conversion.  Each Notice of Extension/Conversion shall
specify:

 

(i)            the Group
of Loans (or portion thereof) to which such notice applies;

 

(ii)           the date
on which the conversion or continuation selected in such notice is to be
effective, which shall comply with the applicable clause of subsection
2.07(a) above;

 

(iii)          if
the Loans comprising such Group are to be converted, the new Type of Loans and,
if the Loans being converted are to be Eurodollar Loans, the duration of the
next succeeding Interest Period applicable thereto; and

 

(iv)          if such
Loans are to be continued as Eurodollar Loans for an additional Interest
Period, the duration of such additional Interest Period.

 

Each Interest Period specified in a Notice of Interest
Rate Election shall comply with the provisions of the definition of the term
“Interest Period”.  If no Notice of
Extension/Conversion is timely received prior to the end of an Interest Period
for any Group of Eurodollar Loans, the Borrower shall be deemed to have elected
that such Group be converted to Base Rate Loans as of the last day of such
Interest Period.

 

(c)           Notification to Lenders.  Upon receipt of a Notice of
Extension/Conversion from the Borrower pursuant to subsection 2.07(a)
above, the Administrative Agent shall promptly notify each Lender of the
contents thereof.

 

(d)           Limitation on Conversion/Continuation Options.  The Borrower shall not be entitled to elect
to convert any Loans to, or continue any Loans for an additional Interest
Period as, Eurodollar Loans if (i) the aggregate principal amount of any Group
of Eurodollar Loans created or continued as a result of such election would be
less than $2,000,000 or (ii) a Default shall have occurred and be continuing
when the Borrower delivers notice of such election to the Administrative Agent
and the Required Lenders have directed the Administrative Agent during the
period of such Event of Default that Eurodollar Loans shall no longer be made
available to the Borrower.

 

(e)           Accrued Interest.  Accrued interest on a Loan (or portion
thereof) being extended or converted shall be paid by the Borrower (i) with
respect to any Base Rate Loan being converted to a Eurodollar Loan, on the last
Business Day of the first fiscal quarter of the Borrower ending on or after the
date of conversion and (ii) otherwise, on the date of extension or conversion.

 

Section
2.08  Maturity of Loans.

 

(a)           Maturity of Revolving Loans.  The Revolving Loans shall mature on the
Revolving Termination Date, and any Revolving Loans, Swing Line Loans and L/C
Obligations then outstanding (together with accrued interest thereon and fees
in respect thereof) shall be due and payable on such date.

 

(b)           Scheduled Amortization of Term B Loans.  The Borrower shall repay, and there shall
become due and payable (together with accrued interest thereon) on each
Principal Amortization Payment Date and on the Term B Maturity Date (i) the sum
of (A) 1⁄4 of 1% of the aggregate initial

 

65

 

principal amount of the Term B Loans in the case of
the first 27 Principal Amortization Payment Dates and (B) 1⁄4 of 1% of the
aggregate initial principal amount of each additional Term B Loans made as part
of a Facilities Increase in the case of each of the then remaining Principal
Amortization Payment Dates occurring after each such applicable Facilities
Increase and prior to the Term B Maturity Date and (ii) the remaining outstanding
principal amount of all Term B Loans on the Term B Maturity Date.

 

(c)           Maturity of Second Lien Loans.  The Second Lien Loans shall mature on the
Second Lien Maturity Date, and any Second Lien Term Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such date.

 

Section
2.09  Prepayments.

 

(a)           Voluntary Prepayments.  The Borrower shall have the right voluntarily
to prepay Loans in whole or in part from time to time, subject to Section
2.09(c) and Section 3.05; provided, however, that (i)
no such prepayment shall be made of Second Lien Loans prior to the payment in
full of the Senior Credit Obligations, (ii) each partial prepayment of Loans
shall be in a minimum principal amount of $2,000,000 or a whole multiple of
$500,000 in excess thereof, in the case of Eurodollar Loans, and $500,000 or a
whole multiple of $100,000 in excess thereof, in the case of Base Rate Loans
and (iii) the Borrower shall have given prior written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the
Administrative Agent, in the case of any Revolving Loan which is a Base Rate
Loan or any Swing Line Loan, by 1:00 P.M. (or 1:30 P.M. in the case of Swing
Line Loans), on the date of prepayment and, in the case of any other Loan, by
1:00 P.M., at least three Business Days prior to the date of prepayment.  Each notice of prepayment shall specify the
prepayment date, the principal amount to be prepaid, whether the Loan to be
prepaid is a Revolving Loan, Term B Loan, Second Lien Loan or Swing Line Loan,
whether the Loan to be prepaid is a Eurodollar Loan or a Base Rate Loan and, in
the case of a Eurodollar Loan, the Interest Period of such Loan.  Each notice of prepayment shall be
irrevocable and shall commit the Borrower to prepay such Loan by the amount
stated therein on the date stated therein. 
Subject to the foregoing, amounts prepaid under this Section 2.09(a)
shall be applied as the Borrower may elect; provided that if the
Borrower fails to specify the application of a voluntary prepayment, then such
prepayment shall be applied first to Revolving Loans, then to Swing Line Loans,
then to the Term B Loans and, once the Senior Obligations have been paid in
full, to the Second Lien Loans (in each case ratably to the remaining Principal
Amortization Payments thereof), in each case first to Base Rate Loans and then
to Eurodollar Loans in direct order of Interest Period.  All prepayments of Eurodollar Loans under
this Section 2.09(a) shall be accompanied by accrued interest on
the principal amount being prepaid to the date of payment.

 

(b)           Mandatory Prepayments.

 

(i)            Revolving Committed Amount.  If on any date the aggregate Revolving
Outstandings exceed the Revolving Committed Amount, the Borrower shall repay, and
there shall become due and payable (together with accrued interest thereon), on
such date an aggregate principal amount of Swing Line Loans equal to such
excess.  If the outstanding Swing Line
Loans have been repaid in full, the Borrower shall prepay, and there shall
become due and payable (together with accrued interest thereon), Revolving
Loans in such amounts as are necessary so that, after giving effect to the
repayment of the Swing Line Loans and the repayment of Revolving Loans, the
aggregate Revolving Outstandings do not exceed the Revolving Committed
Amount.  If the outstanding Revolving
Loans and Swing Line Loans have been repaid in full, the Borrower shall Cash
Collateralize L/C Obligations so that, after giving effect to the repayment of
Swing Line Loans and Revolving Loans and the Cash Collateralization of L/C
Obligations pursuant to this subsection (i), the aggregate Revolving
Outstandings does not exceed the Revolving Committed Amount.  In determining the aggregate Revolving
Outstandings for 

 

66

 

purposes of this subsection
(i), L/C Obligations shall be reduced to the extent that they are Cash
Collateralized as contemplated by this subsection (i).  Each prepayment of Revolving Loans required
pursuant to this subsection (i) shall be applied ratably among
outstanding Revolving Loans based on the respective amounts of principal then
outstanding.  Each Cash Collateralization
of L/C Obligations required by this subsection (i) shall be applied
ratably among L/C Obligations based on the respective amounts thereof then
outstanding.

 

(ii)           Excess Cash Flow.  Within 100 days after the end of each fiscal
year of Holdings (commencing with the fiscal year ending October 31, 2005), the
Borrower shall prepay the Loans and/or Cash Collateralize or pay the L/C
Obligations in an amount equal to Applicable Percentage of the Excess Cash Flow
for such prior fiscal year (or, in the case of fiscal year ending October 31,
2005 the period of five fiscal quarters commencing on August 1, 2004 though
October 31, 2005).  As used in this Section
2.09(b)(ii), the term “Applicable Percentage” for any fiscal year
means (i) 50% or (ii) if the respective Senior Leverage Ratios as of the last
days of each of the third and fourth quarters of the fiscal year in respect of
which Excess Cash Flow is being determined are in both cases less than 2.5 to
1.0 (the “Senior Leverage Ratio Condition”), then the Applicable
Percentage shall be zero for that fiscal year and all subsequent fiscal years,
except that the Applicable Percentage shall revert to 50% for (x) any fiscal
year during which a Facilities Increase causes the Senior Leverage Ratio
Condition not to be satisfied and (y) all subsequent fiscal years until the
Senior Leverage Ratio Condition is again satisfied.

 

(iii)          Asset Dispositions, Casualties and Condemnations, etc.  Within five Business Days after receipt by
any Group Company of Net Cash Proceeds from any Asset Disposition (other than
any Excluded Asset Disposition), Casualty or Condemnation, the Borrower shall
prepay the Loans and/or Cash Collateralize or pay the L/C Obligations in an
aggregate amount equal to 100% of the Net Cash Proceeds of such Asset
Disposition, Casualty or Condemnation; provided, that no such prepayment caused
by the receipt of Net Cash Proceeds from any Asset Disposition shall be
required to the extent that the sum of such Net Cash Proceeds and all other Net
Cash Proceeds from Asset Dispositions occurring after the Closing Date and
during the same fiscal year does not exceed $1,000,000 (it being understood
that a prepayment shall only be required of such excess).

 

(iv)          Debt Issuances.  Within five Business Days after receipt by
any Group Company of Net Cash Proceeds from any Debt Issuance (other than any
Debt Issuance permitted pursuant to clauses (i) through (xvii) of
Section 7.01 of this Agreement or to the extent that such Net Cash
Proceeds constitute Excluded Public Debt Issuance Proceeds), the Borrower shall
prepay the Senior Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to 100% of the Net Cash Proceeds of such Debt
Issuance.  Within five Business Days
after receipt by any Group Company of any Excluded Public Debt Issuance
Proceeds, the Borrower shall prepay Second Lien Loans in an aggregate amount
equal to 100% of such proceeds.

 

(v)           Equity Issuances.  Within five Business Days after receipt by
any Group Company of Net Cash Proceeds from any Equity Issuance (other than any
Excluded Equity Issuance or to the extent such Net Cash Proceeds constitute
Excluded IPO Proceeds), the Borrower shall prepay the Senior Loans and/or Cash
Collateralize the L/C Obligations in an aggregate amount equal to 50% of the
Net Cash Proceeds of such Equity Issuance. 
Within five Business Days after receipt by any Group Company of any
Excluded IPO Proceeds, the Borrower shall prepay Second Lien Loans in an
aggregate amount equal to 100% of such proceeds (giving effect, as applicable,
to clause (ii) of the definition of “Excluded IPO Proceeds”).

 

67

 

(vi)          Payments in Respect of Subordinated Indebtedness.  Immediately upon receipt by the
Administrative Agent or any Lender of any amount so payable pursuant to the
subordination provision of any Indebtedness of Holdings or any of its
Subsidiaries that is subordinate to the Credit Obligations, all proceeds
thereof shall be applied as set forth in subsection (vii)(B) below.

 

(vii)         Application of Mandatory Prepayments.  Subject to Section 2.14(d), all
amounts required to be paid pursuant to this Section 2.09(b) shall be
applied as follows:

 

(A)          with
respect to all amounts paid pursuant to Section 2.09(b)(i), first to
Swing Line Loans, second to Revolving Loans and third to Cash Collateralize L/C
Obligations;

 

(B)           with
respect to all amounts paid pursuant to Section 2.09(b)(ii), (iii),
(iv)(first sentence), (v)(first sentence) or (vi), (1)
first to the Term B Loans (ratably to the remaining Principal Amortization
Payments thereof), (2) second, (x) to the Swing Line Loans (with a
corresponding reduction in the Swing Line Committed Amount pursuant to Section
2.10(c)(i)), (y) then to Revolving Loans (with a corresponding reduction in
the Revolving Committed Amount pursuant to Section 2.10(c)(i)), and (z)
then to Cash Collateralize L/C Obligations and (3) third, once the all other
Senior Credit Obligations have been paid in full, to the Second Lien Loans; and

 

(C)           with
respect to all amounts paid pursuant to the second sentence of Section
2.09(b)(iv) or (v), to the Second Lien Loans.

 

(viii)        Order of Applications.  All amounts allocated to Revolving
Outstandings as provided in this Section 2.09(b) shall be applied,
first, to Swing Line Loans, second, after all Swing Line Loans have been
repaid, to Revolving Loans, and third, after all Revolving Loans have been
repaid, to Cash Collateralize or pay the L/C Obligations; provided that
any balance of such amounts remaining after all L/C Obligations have been Cash
Collateralized shall be applied to the Term B Loans (in each case ratably to
the remaining Principal Amortization Payments thereof) and to the Second Lien
Loans in the priority set forth clause (vii)(B).  Within the parameters of the applications set
forth above, prepayments shall be applied first to Base Rate Loans and then,
subject to subsection (ix) below, to Eurodollar Loans in direct order of
Interest Period maturities.  All
prepayments under this Section 2.09(b) shall be subject to Section
3.05 and to paragraph (c) below. 
All prepayments under this Section 2.09(b) shall be accompanied
by accrued interest on the principal amount being prepaid to the date of
payment.

 

(ix)           Prepayment Accounts.  Amounts to be applied as provided in subsection (vii)
above to the prepayment of Loans of any Class shall be applied first to reduce
outstanding Base Rate Loans of such Class. 
Any amounts remaining after each such application shall, at the option
of the Borrower, be applied to prepay Eurodollar Loans of such Class
immediately and/or shall be deposited in a separate Prepayment Account (as
defined below) for the Loans of such Class. 
The Administrative Agent shall apply any cash deposited in the
Prepayment Account for any Class of Loans, upon withdrawal by the Applicable
Collateral Agent, to prepay Eurodollar Loans of such Class on the last day of
their respective Interest Periods (or, at the direction of the Borrower, on any
earlier date) until all outstanding Loans of such Class have been prepaid or
until all the allocable cash on deposit in the Prepayment Account for such Class
has been exhausted.  For purposes of this
Agreement, the term “Prepayment Account” for any Class of Loans shall
mean an account (which may include the Prepayment Account established under the
Security Agreement) established by the Borrower with the

 

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Applicable
Collateral Agent and over which the Applicable Collateral Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal for
application in accordance with this subsection (ix).  The Applicable Collateral Agent will, at the
request of the Borrower, invest amounts on deposit in the Prepayment Account
for any Class of Loans in Cash Equivalents that mature prior to the last day of
the applicable Interest Periods of the Eurodollar Loans of such Class to be
prepaid; provided, however, that (i) the Applicable
Collateral Agent shall not be required to make any investment that, in its sole
judgment, would require or cause the Applicable Collateral Agent to be in, or
would result in any, violation of any Law, (ii) such Cash Equivalents shall be
subjected to a Requisite Priority Lien in favor of the Collateral Agents and
(iii) if any Event of Default shall have occurred and be continuing, the
selection of such Cash Equivalents shall be in the sole discretion of the
Applicable Collateral Agent.  The
Borrower shall indemnify the Applicable Collateral Agent for any losses
relating to such investments in Cash Equivalents so that the amount available
to prepay Eurodollar Loans on the last day of the applicable Interest Periods
is not less than the amount that would have been available had no investments
been made pursuant thereto.  Other than
any interest or profits earned on such investments, the Prepayment Accounts
shall not bear interest.  Interest or
profits, if any, on the investments in any Prepayment Account shall accumulate
in such Prepayment Account until all outstanding Loans of any applicable Class
with respect to which amounts have been deposited in the Prepayment Accounts
have been prepaid in full, at which time so much thereof as is not required to
make payment of the Credit Obligations which have become due and payable
(whether by scheduled maturity, acceleration or otherwise) shall be withdrawn
by the Applicable Collateral Agent on the next Business Day following the day
on which the Applicable Collateral Agent considers the funds deposited therein
to be collected funds and disbursed to the Borrower or its order.  If the maturity of the Loans has been
accelerated pursuant to Section 8.02, the Administrative Agent may, in
its sole discretion, cause the Applicable Collateral Agent to withdraw amounts
on deposit in the Prepayment Account for the applicable Class of Loans and,
subject to Section 2.14(d), apply such funds to satisfy the Credit
Obligations of the applicable Class or Classes.

 

(x)            Notice.  The Borrower shall give to the Administrative
Agent and the Lenders at least five Business Days’ prior written or telecopy
notice of each and every event or occurrence requiring a prepayment under Section
2.09(b)(ii), (iii), (iv), (v) or (vi),
including the amount of Net Cash Proceeds expected to be received therefrom and
the expected schedule for receiving such proceeds; provided, however,
that in the case of any prepayment event consisting of a Casualty or
Condemnation, the Borrower shall give such notice within five Business Days
after the occurrence of such event.

 

(c)           Prepayment Premium.  If any optional or mandatory repayment or
prepayment of principal of any Second Lien Loan is made prior to the third
anniversary of the Closing Date, the Borrower shall on the date of such
prepayment or declaration, as applicable, pay to the Lenders that hold Second
Lien Loans a prepayment premium equal to (A) if such prepayment or declaration
occurs on or prior to the first anniversary of the Closing Date, 3.0% of the
principal amount of the Second Lien Loans so prepaid or repaid, (B) if such
prepayment or declaration occurs after the first anniversary but on or prior to
the second anniversary of the Closing Date, 2.0% of the principal amount of the
Second Lien Loans so prepaid or repaid and (C) if such prepayment or
declaration occurs after the second anniversary but on or prior to the third
anniversary of the Closing Date, 1.0% of the principal amount of the Second
Lien Loans so prepaid or repaid.

 

Section
2.10  Adjustment of Commitments.

 

(a)           Optional Increase of Revolving and Term B Commitments.

 

69

 

(i)            The
Borrower shall have the right to give the Administrative Agent, after the
Closing Date, a Facilities Increase Notice to request an increase (each a “Facilities
Increase”) in the aggregate Revolving Credit Commitments or the
disbursement of additional Term B Loans in excess of the Term B Loans previously
disbursed, in a principal amount not to exceed $100,000,000 in the aggregate
for all such requests; provided, however, that (A) no Facilities
Increase in the Revolving Credit Commitments shall be effective later than one
year prior to the Revolving Termination Date, (B) no Facilities Increase in the
Term B Facility shall be effective later than three years prior to the Term B
Maturity Date, (C) no Facilities Increase shall be effective earlier than 10
days after the delivery of the Facilities Increase Notice to the Administrative
Agent in respect of such Facilities Increase and (D) no more than three
Facilities Increases shall be made.

 

(ii)           The
Administrative Agent shall promptly notify each Lender of the proposed
Facilities Increase and of the proposed terms and conditions therefor agreed
between the Borrower and the Administrative Agent.  Each such Lender (and each of their
Affiliates and Approved Funds) may, in its sole discretion, commit to
participate in such Facilities Increase by forwarding its commitment to the
Administrative Agent therefor in form and substance satisfactory to the
Administrative Agent within 10 days of receipt of such notice.  The Administrative Agent shall allocate, in
its sole discretion but in amounts not to exceed for each such Lender the
commitment received from such Lender, Affiliate or Approved Fund, the
Commitments to be made as part of the Facilities Increase to the Lenders from
which it has received such written commitments. 
If the Administrative Agent does not receive sufficient commitments from
existing Lenders or their Affiliates or Approved Funds, it may, after
consultation with the Borrower, allocate to Eligible Assignees any excess of
the proposed amount of such Facilities Increase agreed with the Borrower over
the aggregate amounts of the commitments received from existing Lenders.

 

(iii)          Each
Facilities Increase shall become effective on a date agreed by the Borrower and
the Administrative Agent (each a “Facilities Increase Date”), which
shall be in any case on or after the date of satisfaction of the conditions
precedent set forth in Section 4.03 and following notice to the Lenders
and the Borrower of such effectiveness. 
Once a Facilities Increase becomes effective, the Administrative Agent
shall record in the Register all applicable additional information in respect
of such Facilities Increase.

 

(iv)          On the
Facilities Increase Date for any Facilities Increase in the Revolving Credit
Commitments, each Lender participating in such Facilities Increase shall purchase
from each existing Revolving Lender having Revolving Loans outstanding on such
Facilities Increase Date, without recourse or warranty, an undivided
participation interest in such outstanding Revolving Loans in the proportion
its Revolving Commitment Percentage bears to the Revolving Committed Amount
(after giving effect to such Facilities Increase) so as to ensure that, on the
Facilities Increase Date after giving effect to such Facilities Increase, each
Revolving Lender is owed no more than its proportionate share of the Revolving
Loans outstanding on such Facilities Increase Date.

 

(v)           From and
after the Facilities Increase Date, the term “Lenders”, as used herein,
shall include all Eligible Assignees which become Lenders pursuant to this Section
2.10(a).

 

This subsection (a) shall supercede any
provisions of Section 2.13 or 10.01 to the contrary.

 

70

 

(b)           Optional Termination or Reduction of Revolving
Commitments (Pro-Rata). 
The Borrower may from time to time permanently reduce or terminate the
Revolving Committed Amount in whole or in part (in minimum aggregate amounts of
$2,000,000 or any whole multiple of $500,000 in excess thereof (or, if less,
the full remaining amount of the then applicable Revolving Committed Amount))
upon five Business Days’ prior written or telecopy notice to the Administrative
Agent; provided, however, that no such termination or reduction
shall be made which would cause the Revolving Outstandings to exceed the
Revolving Committed Amount as so reduced, unless, concurrently with such
termination or reduction, the Revolving Loans are repaid (and, after the
Revolving Loans have been paid in full, the Swing Line Loans are repaid and,
after the Swing Line Loans have been paid in full, the L/C Obligations are Cash
Collateralized) to the extent necessary to eliminate such excess.  The Administrative Agent shall promptly
notify each affected Lender of the receipt by the Administrative Agent of any notice
from the Borrower pursuant to this Section 2.10(b).  Any partial reduction of the Revolving
Committed Amount pursuant to this Section 2.10(b) shall be applied to
the Revolving Commitments of the Lenders pro-rata based upon their respective
Revolving Commitment Percentages.  The
Borrower shall pay to the Administrative Agent for the account of the Lenders
in accordance with the terms of Section 2.11, on the date of each
termination or reduction of the Revolving Committed Amount, any fees accrued
through the date of such termination or reduction on the amount of the
Revolving Committed Amount so terminated or reduced.

 

(c)           Mandatory Reductions of Revolving Commitments.  On any date that any Revolving Loans are
required to be prepaid, Swing Line Loans are required to be prepaid and/or L/C
Obligations are required to be Cash Collateralized pursuant to the terms of Section
2.09(b)(ii), (iii), (iv), (v) or (vi) (or would
be so required if any Revolving Loans, Swing Line Loans or L/C Obligations were
outstanding), the Revolving Committed Amount shall be automatically and
permanently reduced by the total amount of such required prepayments and cash
collateral (and, in the event that the amount of any payment referred to in Section
2.09(b)(ii), (iii), (iv), (v) or (vi) which is
allocable to the Revolving Outstandings exceeds the amount of all outstanding
Revolving Outstandings, the Revolving Committed Amount shall be further reduced
by 100% of such excess).

 

(d)           Termination.  The Revolving Commitments of the Lenders and
the L/C Commitments of the L/C Issuers shall terminate automatically on the
Revolving Termination Date.  The Swing
Line Commitment of the Swing Line Lender shall terminate automatically on the
Swing Line Termination Date.  The Term B
Commitments and Second Lien Commitments of the Lenders shall terminate
automatically immediately after the making of the Term Loans on the Closing
Date, subject to a subsequent Facilities Increase pursuant to paragraph (a)
above.

 

(e)           Replacement of Lenders.  If (i) any Lender has demanded compensation
or indemnification pursuant to Section 3.01 or Section 3.04, (ii)
the obligation of any Lender to make Eurodollar Loans has been suspended
pursuant to Section 3.02, (iii) any Lender is a Defaulting Lender or
(iv) any Lender has failed to consent to a proposed amendment, waiver,
discharge or termination which pursuant to the terms of Section 10.01 or
any other provision of any Loan Document requires the consent of all of the
Lenders of a Class or Class and with respect to which the required Lenders for
such Class or Classes shall have granted their consent, the Borrower shall have
the right, if no Default or Event of Default then exists, to (i) remove such
Lender by terminating such Lender’s Commitment in full or (ii) replace such
Lender by causing such Lender to assign its Commitment to one or more existing
Lenders or Eligible Assignees pursuant to Section 10.07; provided,
however, that (x) if the Borrower elects to exercise such right with
respect to any Lender pursuant to clause (i) or (ii) above, it
shall be obligated to remove or replace, as the case may be, all Lenders that
have similar requests then outstanding for compensation pursuant to Section
3.01 or 3.04 or whose obligation to make Eurodollar Loans has been
similarly suspended and (y) in the case of any replacement of Lenders under the
circumstances described in clause (iv) above, the applicable amendment,
waiver, discharge or termination that the Borrower has

 

71

 

requested shall become effective upon giving effect to
such replacement (and any related Assignment and Assumptions required to be
effected in connection therewith in accordance with this paragraph (e)).  The replacement of a Lender pursuant to this Section
2.10(e) shall be effective on the tenth Business Day (the “Replacement
Date”) following the date of notice of such replacement to the Lenders
through the Administrative Agent, subject to the satisfaction of the following
conditions:

 

(i)            each
replacement Lender and/or Eligible Assignee, and the Administrative Agent
acting on behalf of each Lender subject to replacement, shall have satisfied
the conditions to an Assignment and Assumption set forth in Section 10.07(b)
and, in connection therewith, the replacement Lender(s) and/or Eligible
Assignee(s) shall pay:

 

(A)          to each
Lender subject to replacement an amount equal in the aggregate to the sum of
(x) the principal of, and all accrued but unpaid interest on, its outstanding
Loans, (y) all L/C Disbursements that have been funded by (and not reimbursed
to) it under Section 2.05, together with all accrued but unpaid interest
with respect thereto, and (z) all accrued but unpaid fees owing to it pursuant
to Section 2.11; and

 

(B)           to the L/C
Issuers an amount equal to the aggregate amount owing by the replaced Lenders
to the L/C Issuers as reimbursement pursuant to Section 2.05, to the
extent such amount was not theretofore funded by such replaced Lenders; and

 

(ii)           the
Borrower shall have paid to the Administrative Agent for the account of (A)
each replaced Second Lien Lender (other than a Second Lien Lender replaced
under the circumstances described in (x) clause (e)(iii) above or in (y)
clause (e)(iv) above if such Second Lien Lender was the sole Second Lien
Lender failing to consent to a proposed amendment, waiver, discharge or
termination which pursuant to the terms of Section 10.01 or any other
provision of any Loan Document requires the consent of all Second Lien Lenders)
an amount equal to the amount specified in Section 2.09(c) as if the
assignment to the replacement Lender or Eligible Assignee were a voluntary
prepayment of the Loans of such replaced Lender and (B) to each replaced Lender
all obligations owing to such replaced Lenders by the Borrower pursuant to this
Agreement and the other Loan Documents (other than those obligations of the
Borrower referred to in clause (i)(A) above).

 

In the case of the removal of a Lender pursuant to
this Section 2.10(e), upon (i) payment by the Borrower to the
Administrative Agent for the account of the Lender subject to such removal of
an amount equal to the sum of (A) the aggregate principal amount of all Loans
and L/C Obligations held by such Lender and (B) all accrued interest, fees and
other amounts owing to such Lender hereunder, including, without limitation,
all amounts payable by the Borrower to such Lender under Article III or Sections
10.04 and 10.05, and (ii) provision by the Borrower to the Swing
Line Lender and each L/C Issuer of appropriate assurances and indemnities
(which may include letters of credit) as each may reasonably require with
respect to any continuing obligation of such removed Lender to purchase
Participation Interests in any L/C Obligations or Swing Line Loans then
outstanding, such Lender shall, without any further consent or other action by
it, cease to constitute a Lender hereunder; provided that the provisions of
this Agreement (including, without limitation, the provisions of Article III
and Sections 10.04 and 10.05) shall continue to govern the rights
and obligations of a removed Lender with respect to any Loans made, any Letters
of Credit issued or any other actions taken by such removed Lender while it was
a Lender.

 

(f)            General.  The Borrower shall pay to the Administrative
Agent for the account of the Lenders in accordance with the terms of Section
2.10, on the date of each termination of the

 

72

 

Revolving Committed Amount, the Commitment Fee accrued
through the date of such termination on the amount of the Revolving Committed
Amount so terminated.

 

Section
2.11  Fees.

 

(a)           Commitment Fee.  The Borrower shall pay to the Administrative
Agent for the account of each Revolving Lender a fee (the “Commitment Fee”)
on such Lender’s Revolving Commitment Percentage of the daily Unused Revolving
Committed Amount, computed at a per annum rate for each day at a rate equal to
the then applicable rate per annum set forth under the caption “Applicable
Margin for Commitment Fees” in the definition of “Applicable Margin” in Section
1.01.  The Commitment Fee shall
commence to accrue on the Closing Date and shall be due and payable in arrears
on the last Business Day of each March, June, September and December (and on
the Revolving Termination Date) for the quarter or portion thereof ending on
each such date, beginning with the first of such dates to occur after the
Closing Date.

 

(b)           Letter of Credit Fees.

 

(i)            Standby Letter of Credit Issuance Fee.  The Borrower shall pay to the Administrative
Agent for the account of each Revolving Lender a fee (the “Standby Letter of
Credit Fee”) on such Lender’s Revolving Commitment Percentage of the
average daily maximum amount available to be drawn under each such Standby
Letter of Credit (whether or not such maximum amount is then in effect under
such Letter of Credit) computed at a per annum rate for each day from the date
of issuance to the date of expiration equal to the Applicable Margin for
Standby Letter of Credit Fees in effect from time to time.  The Standby Letter of Credit Fee will be
computed on a quarterly basis in arrears and shall be due and payable on the
first Business Day after the end of each March, June, September and December,
commencing with the first of such dates to occur after the date of issuance of
such Letter of Credit, and on the Letter of Credit Expiration Date and
thereafter on demand.

 

(ii)           Trade Letter of Credit Fee.  The Borrower shall pay to the Administrative
Agent for the account of each Revolving Lender a fee (the “Trade Letter of
Credit Fee”) on such Lender’s Revolving Commitment Percentage of the
average daily maximum amount available to be drawn under each such Trade Letter
of Credit (whether or not such maximum amount is then in effect under such
Letter of Credit) computed at a per annum rate for each day from the date of issuance
to the date of expiration equal to the Applicable Margin for Trade Letter of
Credit Fees in effect from time to time. 
The Trade Letter of Credit Fee will be computed on a quarterly basis in
arrears and shall be due and payable on the first Business Day after the end of
each March, June, September and December, commencing with the first such date
after the issuance of such Letter of Credit, and on the Letter of Credit
Expiration Date and thereafter on demand.

 

(iii)          Fronting Fees.  The Borrower shall pay directly to each L/C
Issuer for its own account a fronting fee in the amount (A) with respect to
each Trade Letter of Credit, equal to .125% of the amount of such Trade Letter
of Credit (or such higher amount as may be agreed to between the Borrower and
the L/C Issuer), due and payable upon the issuance thereof and (B) with respect
to each Standby Letter of Credit, equal to .125% per annum (or such higher
amount as may be agreed to between the Borrower and the L/C Issuer) on the
daily maximum amount available to be drawn thereunder (whether or not such
maximum amount is then in effect under such Letter of Credit).  Such fronting fee shall be computed on a
quarterly basis in arrears and shall be due and payable on the first Business
Day after the end of each March, June, September

 

73

 

and December,
commencing with the first such date after the issuance of such Letter of
Credit, and on the Letter of Credit Expiration Date and thereafter on demand.

 

(iv)          L/C Issuer Fees.  In addition to the Standby Letter of Credit
Fee payable pursuant to clause (i) above and the Trade Letter of Credit
Fee payable pursuant to clause (ii) above and any fronting fees
payable pursuant to clause (iii) above, the Borrower promises to pay to
the L/C Issuer for its own account without sharing by the other Lenders the
customary charges from time to time of the L/C Issuer with respect to the
issuance, amendment, transfer, administration, cancellation and conversion of,
and drawings under, such Letters of Credit (collectively, the “L/C Issuer
Fees”).  L/C Issuer Fees are due and
payable on demand and are nonrefundable.

 

(v)           Computation of Certain Fees after Default.  Upon the occurrence and during the
continuance of an Event of Default under Section 8.01(a) or (f),
the Standby Letter of Credit Fee and the Trade Letter of Credit Fee payable
under subsections (i) and (ii) above shall be computed at a rate
per annum equal to the relevant “Applicable Margin for Standby Letter of Credit
Fee” and the “Applicable Margin for Trade Letter of Credit Fee” as set forth in
the applicable table in the definition of “Applicable Margin” in Section
1.01 hereof plus 2.00%.

 

(c)           Other Fees.  The Borrower shall pay to the Arranger and
the Administrative for their own respective accounts fees in the amounts and at
the times specified in the Fee Letter. 
Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.  The Borrower
shall pay to the Lenders such fees as shall have been separately agreed upon in
writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.

 

Section
2.12  Pro-rata Treatment.  Except to the extent otherwise provided
herein or in the Intercreditor Agreement:

 

(a)           Loans. 
Each Borrowing, each payment or prepayment of principal of or interest
on any Loan, each payment of fees (other than the L/C Issuer Fees retained by
an L/C Issuer for its own account and the administrative fees retained by the
Agents for their own account), each reduction of the Revolving Committed Amount
and each conversion or continuation of any Loan, shall be allocated pro-rata
among the relevant Lenders in accordance with the respective Revolving Commitment
Percentages, Term B Commitment Percentages and Second Lien Commitment
Percentages, as applicable, of such Lenders (or, if the Commitments of such
Lenders have expired or been terminated, in accordance with the respective
principal amounts of the outstanding Loans of the applicable Class and
Participation Interests of such Lenders); provided that, in the event
any amount paid to any Lender pursuant to this subsection (a) is
rescinded or must otherwise be returned by the Administrative Agent, each Lender
shall, upon the request of the Administrative Agent, repay to the
Administrative Agent the amount so paid to such Lender, with interest for the
period commencing on the date such payment is returned by the Administrative
Agent until the date the Administrative Agent receives such repayment at a rate
per annum equal to, during the period to but excluding the date two Business
Days after such request, the Federal Funds Rate, and thereafter, the Base Rate
plus 2.00% per annum.

 

(b)           Letters of Credit.  Each payment of L/C Obligations shall be
allocated to each Revolving Lender pro-rata in accordance with its Revolving
Commitment Percentage; provided that, if any Revolving Lender shall have
failed to pay its applicable pro-rata share of any L/C Disbursement as required
under Section 2.05(f)(iv) or (vi), then any amount to which such
Revolving Lender would otherwise be entitled pursuant to this subsection (b)
shall instead be payable to the L/C Issuer.

 

74

 

Section
2.13  Sharing of Payments.  Subject to the Intercreditor Agreement, the
Lenders agree among themselves that, except to the extent otherwise provided
herein, if any Lender shall obtain payment in respect of any Loan, unreimbursed
L/C Disbursements or any other obligation owing to such Lender under this
Agreement through the exercise of a right of setoff, banker’s lien or
counterclaim, or pursuant to a secured claim under Section 506 of the
Bankruptcy Code or other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable Debtor Relief Laws
or otherwise, or by any other means, in excess of its pro-rata share of such
payment as provided for in this Agreement, such Lender shall promptly pay in
cash or purchase from the other Lenders a participation in such Loans,
unreimbursed L/C Disbursements and other obligations in such amounts, and make
such other adjustments from time to time, as shall be equitable to the end that
all Lenders share such payment in accordance with their respective ratable
shares as provided for in this Agreement; provided that nothing in this Section
2.13 shall impair the right of any Lender to exercise any right of set-off
or counterclaim it may have for payment of indebtedness of the Borrower other
than its indebtedness hereunder.  The
Lenders further agree among themselves that if payment to a Lender obtained by
such Lender through the exercise of a right of setoff, banker’s lien,
counterclaim or other event as aforesaid shall be rescinded or must otherwise
be restored, each Lender which shall have shared the benefit of such payment
shall, by payment in cash or a repurchase of a participation theretofore sold,
return its share of that benefit (together with its share of any accrued interest
payable with respect thereto) to each Lender whose payment shall have been
rescinded or otherwise restored. 
Holdings and the Borrower agree that any Lender so purchasing such a
participation may, to the fullest extent permitted by Law, exercise all rights
of payment, including setoff, banker’s lien or counterclaim, with respect to
such participation as fully as if such Lender were a holder of such Loan, L/C
Obligation or other obligation in the amount of such participation.  The Administrative Agent will keep records
(which shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments.  Each Lender that purchases a participation
pursuant to this Section shall from and after such purchase have the right to
give all notices, requests, demands, directions and other communications under
this Agreement with respect to the portion of the Loan, L/C/ Obligation or
other obligation purchased to the same extent as though the purchasing Lender
were the original owner of the obligations purchased.  If under any applicable Debtor Relief Law,
any Lender receives a secured claim in lieu of a setoff to which this Section
2.13 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders under this Section 2.13 to share in the benefits of any
recovery on such secured claim.

 

Section
2.14  Payments; Computations.

 

(a)           Payments by the Borrower.  Each payment of principal of and interest on
Loans, L/C Obligations and fees hereunder (other than fees payable directly to
the L/C Issuers) shall be paid not later than 2:00 P.M. on the date when due,
in Federal or other funds immediately available to the Administrative Agent at
the account designated by it by notice to the Borrower.  Each such payment shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff and
irrespective of any claim or defense to payment which might in the absence of
this provision be asserted by the Borrower or any Affiliate against the any
Agent or any Lender.  Payments received
after 2:00 P.M. shall be deemed to have been received on the next Business Day,
and any applicable interest or fee shall continue to accrue.  Except for payments and other amounts
received by the Administrative Agent and applied in accordance with the
provisions of paragraph (d) below or required to be applied in accordance
with Section 2.09(b)(vii), the Borrower shall, at the time it makes any
payments under this Agreement, specify to the Administrative Agent the Loan,
Letters of Credit, fees or other amounts payable by the Borrower hereunder to
which such payment is to be applied (and if it fails to specify or if such
application would be inconsistent with the terms hereof, the Administrative
Agent shall, subject to paragraph (d) below, to Section 2.08, to Section
2.09(b)(vii) and to Section 2.12 , distribute such payment to the

 

75

 

Lenders in such manner as the Administrative Agent may
deem reasonably appropriate).  The
Administrative Agent may in its sole discretion, distribute such payments to
the applicable Lenders on the date of receipt thereof, if such payment is
received prior to 2:00 P.M.; otherwise the Administrative Agent may, in its
sole discretion, distribute such payment to the applicable Lenders on the date
of receipt thereof or on the immediately succeeding Business Day.  Whenever any payment hereunder shall be due
on a day which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day unless (in the case of Eurodollar
Loans) such Business Day falls in another calendar month, in which case the
date for payment thereof shall be the next preceding Business Day.  If the date for any payment of principal is
extended by operation of Law or otherwise, interest thereon shall be payable
for such extended time.  The Borrower
hereby authorizes and directs the Administrative Agent to debit any account
maintained by the Borrower with the Administrative Agent to pay when due any
amounts required to be paid from time to time under this Agreement.

 

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

 

(c)           Computations.  All computations of interest for Base Rate
Loans when the Base Rate is determined by Bank of America’s “prime rate” and
all computations of fees hereunder shall be made on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed.  All other computations of interest shall be
made on the basis of a 360-day year and actual days elapsed (which results in
more interest being paid than if computed on the basis of a 365-day year).  Interest shall accrue from and including the
date of borrowing (or continuation or conversion) but excluding the date of
payment; provided that any Loan that is repaid on the same day on which
it is made shall, subject to Section 2.14(a), bear interest for one day.

 

(d)           Certain Payments after an Event of Default.  The Borrower hereby irrevocably waives the
right to direct the application of any and all payments in respect of the
Finance Obligations and any Proceeds of Collateral after the occurrence and
during the continuance of an Event of Default, and agrees that, notwithstanding
the provisions of Section 2.09(b)(vii) and paragraph (a) above,
the Administrative Agent may, and (upon either (i) the written direction of the
Required Lenders or (ii) acceleration of the Credit Obligations pursuant to Section
8.02), shall apply all payments in respect of any Finance Obligation, all
funds in any Prepayment Account or other cash collateral account and all other
Proceeds of Collateral in the order set forth in the Intercreditor Agreement.

 

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

 

Section
3.01  Taxes.

 

(a)           Payments Net of Certain Taxes.  Any and all payments by any Loan Party to or
for the account of the Administrative Agent or any Lender under any Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts,

 

76

 

deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of
the Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may be, is
organized or maintains a lending office (all such non-excluded taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and liabilities being hereinafter referred to as “Taxes”).  If the Borrower shall be required by any Laws
to deduct any Taxes from or in respect of any sum payable under any Loan
Document to the Administrative Agent or any Lender, (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section), each of the Administrative Agent and such Lender receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
the Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable Laws, and (iv) within 30 days after the date of such
payment, the Borrower shall furnish to the Administrative Agent (which shall
forward the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.

 

(b)           Other Taxes.  In addition, the Borrower agrees to pay any
and all present or future stamp, court or documentary taxes and any other
excise or property taxes or charges or similar levies (including mortgage
recording taxes) which arise from any payment made under any Loan Document or
from the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Loan Document (hereinafter referred to as “Other
Taxes”).

 

(c)           Gross-Up.  If the Borrower shall be required to deduct
or pay any Taxes or Other Taxes from or in respect of any sum payable under any
Loan Document to the Administrative Agent or any Lender, the Borrower shall
also pay to the Administrative Agent or to such Lender, as the case may be, at
the time interest is paid, such additional amount that the Administrative Agent
or such Lender specifies is necessary to preserve the after-tax yield (after
factoring in all taxes, including taxes imposed on or measured by net income)
that the Administrative Agent or such Lender would have received if such Taxes
or Other Taxes had not been imposed.

 

(d)           Borrower Indemnification.  The Borrower agrees to indemnify the
Administrative Agent and each Lender for (i) the full amount of Taxes and Other
Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by the Administrative
Agent and such Lender, (ii) amounts payable under Section 3.01(c) and
(iii) any liability (including additions to tax, penalties, interest and
expenses) arising therefrom or with respect thereto, in each case whether or
not such Taxes or Other Taxes were correctly or legally imposed or asserted by
the relevant Governmental Authority. 
Payment under this subsection (d) shall be made within 30 days
after the date the Lender or the Administrative Agent makes a demand therefor.

 

(e)           Certain Recoveries.  If the Agent or any Lender determines, in its
sole discretion, that it has received a refund of any Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 3.01, it shall pay to the
Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
3.01 with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Agent or such Lender, as the case may be, and
without interest (other than interest paid by the relevant Governmental
Authority with respect to such refund); provided, however, that
the Borrower, upon the request of the Agent or such Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Agent or such Lender in
the event the Agent or such Lender is required to repay such refund to such Governmental
Authority.  This paragraph (e)
shall not be construed

 

77

 

to require the Agent or any Lender to make available
its tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.

 

Section
3.02  Illegality.  If, on or after the date of this Agreement,
the adoption of any applicable Law, or any change in any applicable Law, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of Law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Lender (or its Applicable Lending Office) to make,
maintain or fund any of its Eurodollar Loans and such Lender shall so notify
the Administrative Agent, the Administrative Agent shall forthwith give notice
thereof to the other Lenders and the Borrower, whereupon, until such Lender
notifies the Borrower and the Administrative Agent that the circumstances
giving rise to such suspension no longer exist, the obligation of such Lender
to make Eurodollar Loans, or to convert outstanding Loans into Eurodollar
Loans, shall be suspended.  Before giving
any notice to the Administrative Agent pursuant to this Section 3.02,
such Lender shall designate a different Applicable Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.  If such notice is given, each Eurodollar Loan
of such Lender then outstanding shall be converted to a Base Rate Loan either
(i) on the last day of the then current Interest Period applicable to such
Eurodollar Loan, if such Lender may lawfully continue to maintain and fund such
Loan to such day or (ii) immediately, if such Lender shall determine that it
may not lawfully continue to maintain and fund such Loan to such day.

 

Section
3.03  Inability to Determine Rates.  If on or prior to the
first day of any Interest Period for any Eurodollar Loan:

 

(i)            the
Administrative Agent determines (which determination shall be conclusive) that
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the applicable Eurodollar Rate
for such Interest Period; or

 

(ii)           Lenders
having 50% or more of the aggregate amount of the Commitments advise the
Administrative Agent that the London Interbank Offered Rate as determined by
the Administrative Agent will not adequately and fairly reflect the cost to
such Lenders of funding their Eurodollar Loans for such Interest Period;

 

the Administrative Agent shall forthwith give notice
thereof to the Borrower and the Lenders, whereupon, until the Administrative
Agent notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, (i) the obligations of the Lenders to make
Eurodollar Loans, or to continue or convert outstanding Loans as or into
Eurodollar Loans, shall be suspended and (ii) each outstanding Eurodollar Loan
shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. 
Unless the Borrower notifies the Administrative Agent at least two
Business Days before the date of any Eurodollar Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such date,
such Borrowing shall instead be made as a Base Rate Borrowing in the same
aggregate amount as the requested Borrowing and shall bear interest for each
day from and including the first day to but excluding the last day of the
Interest Period applicable thereto at the rate applicable to Revolving Base
Rate Loans for such day.

 

Section
3.04  Increased Costs and Reduced Return;
Capital Adequacy.

 

(a)           If
on or after the date hereof, the adoption of or any change in any applicable
Law or in the interpretation or application thereof applicable to any Lender
(or its Applicable Lending

 

78

 

Office), or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of Law) from any central bank or other Governmental Authority, in
each case made subsequent to the Effective Date (or, if later, the date on
which such Lender becomes a Lender):

 

(i)            shall
subject such Lender (or its Applicable Lending Office) to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans made by
it or any of its Notes or its obligation to make Eurodollar Loans or to
participate in Letters of Credit, or change the basis of taxation of payments
to such Lender (or its Applicable Lending Office) in respect thereof (except
for (A) Taxes and Other Taxes covered by Section 3.01 (including Taxes
imposed solely by reason of any failure of such Lender to comply with its
obligations under Section 10.15) and (B) changes in taxes measured by or
imposed upon the overall net income, or franchise tax (imposed in lieu of such
net income tax), of such Lender or its Applicable Lending Office, branch or any
affiliate thereof));

 

(ii)           shall
impose, modify or hold applicable any reserve, special deposit, compulsory loan
or similar requirement against assets held by, deposits or other liabilities in
or for the account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender (or its Applicable
Lending Office) which is not otherwise included in the determination of the
Eurodollar Rate hereunder; or

 

(iii)          shall
impose on such Lender (or its Applicable Lending Office) any other condition
(excluding any tax of any kind whatsoever);

 

and the result of any of the foregoing is to increase
the cost to such Lender (or its Applicable Lending Office) of making,
converting into, continuing or maintaining any Eurodollar Loans or issuing or
participating in Letters of Credit or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, upon notice to the Borrower from
such Lender, through the Administrative Agent, in accordance herewith, the
Borrower shall be obligated to promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender on an after-tax basis
(after taking into account applicable deductions and credits in respect of the
amount indemnified) for such increased cost or reduced amount receivable.  Each Lender will promptly notify the Borrower
and the Administrative Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Lender to compensation pursuant
to this Section and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
such Lender.

 

(b)           If
any Lender shall have determined that the adoption or the becoming effective
of, or any change in, or any change by any Governmental Authority, central bank
or comparable agency charged with the interpretation or administration thereof
in the interpretation or administration of, any applicable Law regarding capital
adequacy, 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 Governmental Authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender’s (or 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 parent corporation’s) policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated
to pay to such Lender such additional amount or amounts as will compensate such
Lender on an after-tax basis (after taking into account applicable deductions
and credits in respect of the amount indemnified) for such reduction; provided
that the Borrower shall not be required to compensate any Lender pursuant to subsection
(a) above or this

 

79

 

subsection (b) for any additional costs or
reductions suffered more than 180 days prior to the date such Lender notifies
the Borrower of the circumstances giving rise to such additional costs or
reductions and of such Lender’s intentions to claim compensation therefor, and
provided further that, if the change in Law or in the interpretation or
administration thereof giving rise to such additional costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.  Each determination by any such Lender of
amounts owing under this Section 3.04 shall, absent manifest error, be
conclusive and binding on the parties hereto.

 

(c)           A
certificate of each Lender setting forth in reasonable detail such amount or
amounts as shall be necessary to compensate such Lender or its holding company
as specified in subsection (a) or (b) above, as the case may be,
shall be delivered to the Borrower and shall be conclusive absent manifest
error.  The Borrower shall pay each
Lender or the L/C Issuer the amount shown as due on any such certificate
delivered by it within 10 Business Days after receipt of the same.

 

(d)           Promptly
after any Lender becomes aware of any circumstance that will, in its reasonable
judgment, result in a request for increased compensation pursuant to this Section
3.04, such Lender shall notify the Borrower thereof.  Failure on the part of any Lender so to
notify the Borrower or to demand compensation for any increased costs or reduction
in amounts received or receivable or reduction in return on capital with
respect to any period shall not constitute a waiver of such Lender’s right to
demand compensation with respect to such period or any other period, except as
expressly otherwise provided above.  The
protection of this Section 3.04 shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
the Law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.

 

Section
3.05  Funding Losses.  The Borrower shall indemnify each Lender
against any loss or expense (but excluding in any event loss of anticipated
profit) which such Lender may sustain or incur as a consequence of (i) any
failure by any Borrower to fulfill on the date of any Borrowing hereunder the
applicable conditions set forth in Article IV, (ii) any failure by the
Borrower to borrow or to convert or continue any Loan hereunder after
irrevocable notice of such Borrowing, conversion or continuation has been given
pursuant to Section 2.02 or 2.07, (iii) any payment, prepayment
or conversion of a Eurodollar Loan, whether voluntary or involuntary, pursuant
to any other provision of this Agreement or otherwise made on a date other than
the last day of the Interest Period applicable thereto, (iv) any default in
payment or prepayment of the principal amount of any Loan or any part thereof
or interest accrued thereon, as and when due and payable (at the due date
thereof, by irrevocable notice of prepayment or otherwise) or (v) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to Section
2.10(e), including, in each such case, any loss or reasonable expense
sustained or incurred or to be sustained or incurred in liquidating or
employing deposits from third parties acquired to effect or maintain such Loan
or any part thereof as a Eurodollar Loan. 
Such loss or reasonable expense shall include an amount equal to the
excess, if any, as reasonably determined by such Lender, of (i) its cost of
obtaining the funds for the Loan being paid, prepaid, converted, not borrowed
or assigned (based on the applicable London Interbank Offered Rate), for the period
from the date of such payment, prepayment, conversion, failure to borrow,
convert or continue to the last day of the Interest Period for such Loan (or,
in the case of a failure to borrow, the Interest Period for such Loan which
would have commenced on the date of such failure to borrow, convert or
continue) or assignment over (ii) the amount of interest (as reasonably
determined by such Lender) that would be realized by such Lender in reemploying
the funds so paid, prepaid, converted, not borrowed, converted or continued for
such period or Interest Period or assignment, as the case may be.  A certificate of any Lender setting forth any
amount or amounts which such Lender is entitled to receive pursuant to this Section
3.05 shall be delivered to the Borrower and shall be conclusive absent
manifest error.

 

80

 

Section
3.06  Base Rate Loans Substituted for Affected Eurodollar Loans. 
If (i) the obligation of any Lender to make, or to continue or convert
outstanding Loans as or to, Eurodollar Loans has been suspended pursuant to Section
3.02 or (ii) any Lender has demanded compensation under Section 3.01
or 3.04 with respect to its Eurodollar Loans, and in any such case the
Borrower shall, by at least five Business Days’ prior notice to such Lender
through the Administrative Agent, have elected that the provisions of this Section
3.06 shall apply to such Lender, then, unless and until such Lender
notifies the Borrower that the circumstances giving rise to such suspension or
demand for compensation no longer exist, all Loans which would otherwise be
made by such Lender as (or continued as or converted to) Eurodollar Loans shall
instead be Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related Eurodollar Loans of the other Lenders).  If such Lender notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer exist, the principal amount of each such Base Rate Loan shall be
converted into a Eurodollar Loan on the first day of the next succeeding
Interest Period applicable to the related Eurodollar Loans of the other
Lenders.

 

Section
3.07  Survival.  All of
the Borrower’s obligations under this Article III shall survive termination
of the Commitments and repayment of all other Senior Obligations and Second
Lien Obligations hereunder.

 

ARTICLE
IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

Section
4.01  Conditions to Initial Credit Extension.  The obligation of
each Lender to make a Loan or issue a Letter of Credit on the Closing Date is
subject to the satisfaction of the following conditions:

 

(a)           Executed Loan Documents.  Receipt by the Administrative Agent of duly
executed copies of:  (i) this Agreement;
(ii) the Notes; (iii) the Intercreditor Agreement, (iv) the Guaranties; (v) the
Collateral Documents and (vi) all other Loan Documents, each in form and
substance reasonably satisfactory to the Administrative Agent and the
Syndication Agent.

 

(b)           Legal Matters.  All legal matters incident to this Agreement
and the borrowings hereunder shall be reasonably satisfactory to the
Administrative Agent, the Syndication Agent and to Fried Frank Harris Shriver
& Jacobson, LLP, counsel for the Administrative Agent.

 

(c)           Organization Documents.  After giving effect to the transactions
contemplated hereby, the Administrative Agent shall have received: (i) a copy
of the Organization Documents, including all amendments thereto, of each Loan
Party, certified as of a recent date by the Secretary of State or other
applicable Governmental Authority of its respective jurisdiction of
organization, and a certificate as to the good standing of each Loan Party from
such Secretary of State, as of a recent date; (ii) a certificate as to the good
standing of each Loan Party, as of a recent date, from the Secretary of State
or other applicable authority of its respective jurisdiction of organization
and from each other state in which such Loan Party is qualified or is required
to be qualified to do business; (iii) a certificate of the Secretary or
Assistant Secretary of each Loan Party dated the Closing Date and certifying
(A) that the Organization Documents of such Loan Party have not been amended
since the date of the last amendment thereto shown on the certificate of good
standing from its jurisdiction of organization furnished pursuant to clause
(ii) above; (B) that attached thereto is a true and complete copy of the
agreement of limited partnership, operating agreement or by-laws of such Loan
Party, as applicable, as in effect on the Closing Date and at all times since a
date prior to the date of the resolutions described in clause (C) below,
(C) that attached thereto is a true and complete copy of resolutions duly
adopted by the board of directors or other governing body of such Loan Party
authorizing the execution, delivery and performance of the Loan

 

81

 

Documents to which it is to be a party and, in the case of the
Borrower, the borrowings hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect; and (D) as to
the incumbency and specimen signature of each officer executing any Loan
Document; (iv) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (iii) above; and (v) such other corporate
or other constitutive or organizational documents as the Administrative Agent,
the Syndication Agent or Fried Frank Harris Shriver & Jacobson, LLP,
counsel for the Administrative Agent, may reasonably request.

 

(d)           Officer’s Certificates.  The Administrative Agent shall have received
(i) a certificate, dated the Closing Date and signed by a Responsible Officer
of each of Holdings and the Borrower, confirming compliance with the conditions
precedent set forth in paragraphs (b) and (c) of Section 4.03
and (ii) a certificate, dated the Closing Date and signed by a Responsible
Officer of each other Loan Party, confirming compliance with the condition
precedent set forth in paragraph (b) of Section 4.03.

 

(e)           Opinions of Counsel.  On the Closing Date, the Administrative Agent
shall have received a favorable written opinion of Kirkland & Ellis LLP,
special counsel to the Loan Parties, addressed to the Administrative Agent, the
Collateral Agent and each Lender, dated the Closing Date, substantially in the
form of Exhibit E hereto and covering such additional matters incident
to the transactions contemplated hereby as the Administrative Agent or the
Syndication Agent may reasonably request.

 

(f)            Capitalization.  The Administrative Agent and the Syndication
Agent (i) shall be satisfied in their reasonable judgment with the capital and
ownership structure of Parent Holdings (including that Parent Holdings owns all
of the issued and outstanding shares of capital stock of Holdings, that
Holdings owns all of the issued and outstanding shares of capital stock of the
Borrower and that the Borrower or one or more Wholly-Owned Subsidiaries owns
all of the issued and outstanding shares of capital stock of, each of the
Borrower’s Subsidiaries, in each case free of any Lien, charge or encumbrance
not permitted hereunder) and the Organization Documents of each Loan Party and
(ii) shall have received true and correct copies, certified as such by an
appropriate officer of Holdings, of all subscription agreements, registration
rights agreements, shareholder agreements and other documents and instruments
delivered in connection therewith (collectively, the “Capitalization
Documents”), each of which shall be in full force and effect and shall be
in form and substance reasonably satisfactory to the Administrative Agent and
the Syndication Agent.

 

(g)           Refinancing of Certain Existing Indebtedness; Other
Indebtedness.  On the
Closing Date, the commitments under all Refinanced Agreements shall have been
terminated, the Foothill Refinancing shall have been consummated, the Mezzanine
Debt Refinancing shall have been consummated for an aggregate consideration not
exceeding $61,200,000 plus accrued interest thereon and all other loans
outstanding under the Refinanced Agreements shall have been repaid in full
(other than contingent indemnification obligations not yet due and payable),
together with accrued interest thereon (including, without limitation, any
prepayment premium), all Letters of Credit issued thereunder shall have been
terminated, backstopped through the issuance of Letters of Credit hereunder or
shall have become Letters of Credit hereunder and all other amounts owing
pursuant to each Refinanced Agreement shall have been repaid in full, and the
Administrative Agent and the Syndication Agent shall have received evidence in
form, scope and substance reasonably satisfactory to them that the matters set
forth in this subsection (g) have been satisfied at such time.  In addition, on the Closing Date, the
creditors under each Refinanced Agreement shall have terminated and released
all applicable Liens on the capital stock of and assets owned by the Borrower
and its Subsidiaries, and the Administrative Agent shall have received all such
releases as may have been requested by the Administrative Agent or the
Syndication Agent, which releases shall be in form and substance reasonably
satisfactory to the Administrative Agent

 

82

 

and the Syndication Agent.  On
the Closing Date the Group Companies shall have no material liabilities (actual
or contingent) or Preferred Stock, except (i) as disclosed on Schedule 5.05
or in the most recent interim balance sheet included in the financial
statements delivered pursuant to subsection (n) below or in the
footnotes thereto, (ii) for accounts payable incurred in the ordinary course of
business consistent with past practice since the date of the most recent
interim balance sheet included in the financial statements delivered pursuant
to subsection (o) below, (iii) Indebtedness under the Loan Documents and
(iv) the Existing Indebtedness.

 

(h)           Consummation of the Preferred Stock Redemption and
the Equity Distribution. 
The Preferred Stock Redemption and the Equity Distribution shall have
been duly approved by the board of directors and (if required by applicable
Law) the shareholders of the Group Companies party thereto, and all documents
and instruments necessary therefor shall have been duly executed and delivered
by the parties thereto and shall be in full force and effect.  The Preferred Stock Redemption shall have
been consummated for an aggregate consideration not in excess of $86,200,000
and the Equity Distribution shall have been consummated for an aggregate
consideration not exceeding the sum of (i) $93,500,000 plus (ii) the amount by
which the aggregate outstanding principal amount of the Borrower’s Indebtedness
under all Refinanced Agreements on the Closing Date (immediately prior to
giving effect to the Transaction) is less than the amount of such Indebtedness
on April 30, 2004.

 

(i)            Perfection of Personal Property Security Interests
and Pledges; Search Reports.  On or prior to the Closing Date, the
Administrative Agent shall have received:

 

(i)            a
Perfection Certificate from each Loan Party;

 

(ii)           appropriate
financing statements (Form UCC-1 or such other financing statements or similar
notices as shall be required by local Law) authenticated and authorized for
filing under the Uniform Commercial Code or other applicable local law of each
jurisdiction in which the filing of a financing statement or giving of notice
may be required, or reasonably requested by the Administrative Agent or the
Syndication Agent, to perfect the security interests intended to be created by
the Collateral Documents;

 

(iii)          copies
of reports from CT Corporation or another independent search service reasonably
satisfactory to the Collateral Agent listing all effective financing
statements, notices of tax, PBGC or judgment liens or similar notices that name
the Borrower, any other Loan Party, as such (under its present name and any
previous name and, if requested by the Administrative Agent or the Syndication
Agent, under any trade names), as debtor or seller that are filed in the
jurisdictions referred to in clause (ii) above or in any other
jurisdiction having files which must be searched in order to determine fully
the existence of the Uniform Commercial Code security interests, notices of the
filing of federal tax Liens (filed pursuant to Section 6323 of the Code), Liens
of the PBGC (filed pursuant to Section 4068 of ERISA) or judgment Liens on any
Collateral, together with copies of such financing statements, notices of tax,
PBGC or judgment Liens or similar notices (none of which shall cover the
Collateral except to the extent evidencing Permitted Liens or for which the
Administrative Agent shall have received termination statements (Form UCC-3 or
such other termination statements as shall be required by local Law)
authenticated and authorized for filing);

 

(iv)          searches of
ownership of intellectual property in the appropriate governmental offices and
such patent, trademark and/or copyright filings as may be requested by the
Collateral Agent to the extent necessary or reasonably advisable to perfect the
Collateral Agents’ security interests in intellectual property Collateral;

 

83

 

(v)           all of the
Pledged Collateral, which Pledged Collateral shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, with signatures appropriately guaranteed,
accompanied in each case by any required transfer tax stamps, all in form and
substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent; and

 

(vi)          evidence of
the completion of all other filings and recordings of or with respect to the
Collateral Documents and of all other actions as may be necessary or, in the
opinion of the Administrative Agent or the Syndication Agent, desirable to
perfect the security interests intended to be created by the Collateral
Documents.

 

(j)            Evidence of Insurance.  Receipt by the Administrative Agent of copies
of insurance policies or certificates of insurance of the Loan Parties and
their Subsidiaries evidencing liability and casualty insurance meeting the
requirements set forth in the Loan Documents, including, but not limited to,
naming the Collateral Agents as additional insured and loss payee on behalf of
the Lenders.

 

(k)           Consents and Approvals.  On the Closing Date, all necessary
governmental (domestic or foreign), regulatory and third party approvals in
connection with the transactions contemplated hereby shall have been obtained
and remain in full force and effect, and all applicable waiting and appeal
periods shall have expired, in each case without any action being taken by any
competent authority which have or could have a reasonable likelihood of
restraining, preventing or imposing materially burdensome conditions on such
transactions or impose, in the reasonable judgment of the Administrative Agent
or the Syndication Agent, materially burdensome conditions upon the
consummation of such transactions.

 

(l)            Litigation; Judgments.  On the Closing Date, there shall be no
actions, suits, proceedings, counterclaims or investigations pending or overtly
threatened (i) challenging the consummation of any portion of the Transaction
or which in the reasonable judgment of the Administrative Agent or the
Syndication Agent could restrain, prevent or impose burdensome conditions on
the Transaction, in the aggregate, or any other transaction contemplated
hereunder, (ii) seeking to prohibit the ownership or operation by the Borrower
or any of its Subsidiaries of all or any material portion of any of its
respective businesses or assets or (iii) seeking to obtain, or which could
result or has resulted in the entry of, any judgment, order or injunction that
(A) would restrain, prohibit or impose materially adverse or materially
burdensome conditions on the ability of the Lenders to make the Loans, (B) in
the judgment of the Administrative Agent or the Syndication Agent could
reasonably be expected to result in a Material Adverse Effect with respect to
the Borrower and its Subsidiaries taken as a whole (after giving effect to the
Transaction) or (C) could purport to affect the legality, validity or
enforceability of any Loan Document or could have a material adverse effect on
the ability of any Loan Party to fully and timely perform their payment and
security obligations under the Loan Documents or the rights and remedies of the
Lenders.

 

(m)          Solvency Certificate.  On or prior to the Closing Date, the Borrower
shall have delivered or caused to be delivered to the Administrative Agent a
solvency certificate from the chief financial or chief accounting officer of
the Borrower, substantially in the form of Exhibit L hereto, in form and
substance reasonably satisfactory to the Administrative Agent and the
Syndication Agent, setting forth the conclusions that, after giving effect to
the Preferred Stock Redemption, the Equity Distribution, the Foothill
Refinancing, the Mezzanine Refinancing and the other aspects of the Transaction
and the consummation of all financings contemplated herein, Holdings and its
Subsidiaries (on a consolidated basis) are solvent.

 

84

 

(n)           Financial Information.  The Administrative Agent and the Syndication
Agent shall each be reasonably satisfied that the financial statements referred
to in Section 5.05 are not materially inconsistent with the
information or projections or the financial model delivered to the
Administrative Agent and the Arranger prior to the Closing Date.  In addition, (i) the Administrative
Agent shall have received a pro-forma consolidated balance sheet of Holdings as
of the Closing Date, prepared giving effect to the transactions contemplated
hereby as if they had occurred on such date and (ii) the Administrative
Agent and the Syndication Agent shall be reasonably satisfied that such
pro-forma balance sheet is not materially inconsistent with the sources and
uses of funds, projections and financial model delivered to the Administrative
Agent and the Syndication Agent prior to the Closing Date.

 

(o)           Material Adverse Effect.  There shall not have occurred or become known
any condition, fact, event or development that has resulted or could reasonably
be expected to result in a material adverse change in the business, assets,
liabilities (actual or contingent), operations, properties or condition
(financial or otherwise) of Holdings and its Subsidiaries, taken as a whole
(both before and after giving effect to the Transaction since October 31, 3003.

 

(p)           Ratings.  No less than 21 days prior to the Closing
Date, the Revolving Loans and the Term B Loans and the Second Lien Loans shall
have received debt ratings from Moody’s and S&P, in each case with at least
a “stable outlook” by such rating agencies.

 

(q)           Payment of Fees.  All costs, fees and expenses due to the
Administrative Agent, the Syndication Agent, the Collateral Agents and the
Lenders on or before the Closing Date shall have been paid.

 

(r)            Counsel Fees.  The Administrative Agent shall have received
full payment from the Borrower of all Attorney Costs of the Administrative
Agent to the extent invoiced prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute its reasonable
estimate of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a
final settling of accounts between the Borrower and the Administrative Agent).

 

(s)           Revolving Availability.  After giving effect to all Credit Extensions
occurring on the Closing Date, the aggregate unused Revolving Commitments shall
exceed the aggregate amount of all Revolving Outstandings by at least
$30,000,000.

 

(t)            OFAC/Anti-Terrorism Compliance Certificate.  The Administrative Agent shall have received
a certificate substantially in the form of Exhibit K hereto, dated the
Closing Date and signed by a Responsible Officer of Holdings, certifying as to
the matters set forth in Exhibit K.

 

The documents referred to in this Section 4.01
shall be delivered to the Administrative Agent no later than the Closing
Date.  The certificates and opinions
referred to in this Section 4.01 shall be dated the Closing Date.

 

Section
4.02  Determination of Conditions to Initial Credit Extension.  For purposes of determining compliance with
the conditions specified in Section 4.01, each Lender shall be deemed to
have consented to, approved, accepted or be satisfied with, each document or
other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to the Lenders unless an officer of the
Administrative Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender prior to the initial
Borrowing hereunder specifying its objection thereto and such Lender shall not
have made available to the Administrative Agent such Lender’s ratable share of
such Borrowing.

 

85

 

Promptly after the Closing Date occurs, the
Administrative Agent shall notify the Borrower and the Lenders of the Closing
Date, and such notice shall be conclusive and binding on all parties
hereto.  If the Closing Date does not
occur before 5:00 P.M. on July 31, 2004 the Commitments shall terminate at the
close of business on such date and all unpaid fees shall be due and payable on
such date.

 

Section
4.03  Conditions to All Credit Extensions.  The obligation of any
Lender to make a Loan on the occasion of any Borrowing, and the obligation of
any L/C Issuer to issue (or renew or extend the term of) any Letter of Credit,
is subject to the satisfaction of the following conditions:

 

(a)           Notice.  The Borrower shall have delivered (i) in the
case of any Revolving or Term Loan, to the Administrative Agent, an appropriate
Notice of Borrowing, duly executed and completed, by the time specified in, and
otherwise as permitted by, Section 2.02, (ii) in the case of any Letter
of Credit, to the L/C Issuer, an appropriate Letter of Credit Request duly
executed and completed in accordance with the provisions of Section 2.05,
and (iii) in the case of any Swing Line Loan, to the Swing Line Lender, a Swing
Line Loan Request, duly executed and completed, by the time specified in Section
2.02.

 

(b)           Representations and Warranties.  The representations and warranties made by
the Loan Parties in any Loan Document are true and correct in all material
respects at and as if made as of such date except to the extent they expressly
relate to an earlier date.

 

(c)           No Default.  No Default or Event of Default shall exist or
be continuing either prior to or after giving effect thereto.

 

(d)           Availability.  Immediately after giving effect to the making
of a Revolving Loan (and the application of the proceeds thereof) or to the
issuance of a Letter of Credit, as the case may be, (i) the sum of the
Revolving Loans outstanding plus all L/C Obligations outstanding plus all Swing
Line Loans outstanding shall not exceed the Revolving Committed Amount, (ii)
the sum of L/C Obligations outstanding shall not exceed the L/C Sublimit and
(iii) the sum of all Swing Line Loans outstanding shall not exceed the Swing
Line Committed Amount.

 

(e)           Term Borrowings.  In the case of the initial Revolving
Borrowing, the fact that prior to, or concurrently with, such Revolving
Borrowing, the Borrower has made a Term B Borrowing in the full amount of the
Term B Commitments and a Second Lien Borrowing in the full amount of the Second
Lien Commitments.

 

The delivery of each Notice of Borrowing, Swing Line
Loan Request and each request for a Letter of Credit shall constitute a
representation and warranty by the Loan Parties of the correctness of the
matters specified in subsections (b), (c) and (d) above.

 

Section
4.04  Conditions Precedent to Facilities Increase.  No Facilities Increase shall become effective
prior to the satisfaction of all of the following conditions precedent:

 

(a)           Certain Documents. The Administrative
Agent shall have received on or prior to the Facilities Increase Date for such Facilities
Increase each of the following, each dated such Facilities Increase Date unless
otherwise indicated or agreed to by the Administrative Agent and each in form
and substance reasonably satisfactory to the Administrative Agent:

 

(i)            written
commitments duly executed by existing Lenders (or their Affiliates or Approved
Funds) or Eligible Assignees in an aggregate amount equal to the amount

 

86

 

of the proposed
Facilities Increase (as agreed between the Borrower and the Administrative
Agent but in any case not to exceed, in the aggregate for all such Facilities
Increases, the maximum amount set forth in Section 2.10(a)) and, in the
case of each such Eligible Assignee or Affiliate or Approved Fund that is not
an existing Lender, an Assignment and Assumption in form and substance
reasonably satisfactory to the Administrative Agent and duly executed by the
Borrower, the Administrative Agent and such Affiliate, Approved Fund or
Eligible Assignee;

 

(ii)           an amendment
to this Agreement (including to Schedule 2.01), effective as of the
Facilities Increase Date and executed by the Borrower and the Administrative
Agent, to the extent necessary to implement terms and conditions of the
Facilities Increase (including interest rates, fees and scheduled repayment
dates and maturity), as agreed by the Borrower and the Administrative Agent
but, which, in any case, except for of interest, fees, scheduled repayment
dates and maturity, shall not be applied materially differently to the
Facilities Increase and the Revolving Loans and Term B Loans outstanding
immediately prior to the Facilities Increase;

 

(iii)          certified
copies of resolutions of the Board of Directors of each Loan Party approving
the consummation of such Facilities Increase and the execution, delivery and
performance of the corresponding amendments to this Agreement and the other
documents to be executed in connection therewith;

 

(iv)          a favorable
opinion of counsel for the Loan Parties, addressed to the Administrative Agent
and the Lenders and in form and substance and from counsel reasonably
satisfactory to the Administrative Agent; and

 

(v)           such other
document as the Administrative Agent may reasonably request or as any Lender
participating in such Facilities Increase may require as a condition to its
commitment in such Facilities Increase.

 

(b)           Fee and Expenses Paid.  There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent and the
Lenders (including any Person becoming a Lender as part of such Facilities
Increase on such Facilities Increase Date), as applicable, all fees and
expenses (including reasonable Attorney Costs) due and payable on or before the
Facilities Increase Date (including all fees described in the Fee Letters).

 

(c)           Conditions to Each Loan and Letter of Credit.  (i) The conditions precedent set forth in Section
4.03 shall have been satisfied both before and after giving effect to such
Facilities Increase, (ii) such Facilities Increase shall be made on the terms
and conditions set forth in Section 2.10(a) and (iii) the Borrower
and the Parent shall be in compliance with Section 7.17 on such
Facilities Increase Date for the most recently ended fiscal quarter on a
Pro-Forma Basis both before and after giving effect to such Facilities
Increase.

 

(d)           Senior Secured Leverage Ratio.  At the time of, and after giving thereto on a
Pro-Forma Basis, such Facilities Increase, the Senior Secured Leverage Ratio
does not exceed 3.25 to 1.0.

 

(e)           Yield Maintenance.  (i) The “all-in yield” of such Facilities
Increase for the Term B Commitments or Revolving Credit Commitments shall not
exceed such all-in yield (on a “marked-to-market” basis) for the Term B Loans
or Revolving Credit Loans outstanding on the Facilities Increase Date (after
giving effect to any increase in the Applicable Margin applicable to the
existing Term B Loans and Revolving Credit Loans becoming effective on the
Facilities Increase Date) and (ii) as of such Facilities Increase Date, the
Weighted Average Life to Maturity of such Facilities Increase for the Term B

 

87

 

Loans or Revolving Credit Loans shall not be shorter than the remaining
Weighted Average Life to Maturity for the Term B Loans or Revolving Credit
Loans outstanding immediately prior to such Facilities Increase.

 

ARTICLE
V

REPRESENTATIONS AND WARRANTIES

 

Each of Holdings and the Borrower represents and
warrants to the Administrative Agent and the Lenders that:

 

Section
5.01  Existence, Qualification and Power; Compliance with
Laws.  Each Group Company
(i) is duly organized or formed, validly existing and in good standing under
the Laws of the jurisdiction of its incorporation or organization, (ii) has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (A) own its assets and carry on its
business and (B) execute, deliver and perform its obligations under the Loan
Documents to which it is a party, (iii) is duly qualified and is licensed and
in good standing under the Laws of each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification or license, and (iv) is in compliance with all Laws; except in
each case referred to in clause (ii)(A), (iii) or (iv), to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

Section
5.02  Authorization; No Contravention.  The execution,
delivery and performance by each Loan Party of each Loan Document to which such
Person is party have been duly authorized by all necessary corporate,
partnership, limited liability company or other organizational action, and do
not and will not (i) contravene the terms of any of such Person’s Organization
Documents, (ii) conflict with or result in any breach or contravention of, or
the creation of any Lien under, any Contractual Obligation to which such Person
is a party or any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject
or (iii) violate any Law, except in any case for such violations could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

 

Section
5.03  Governmental Authorization; Other Consents. 
Except for filings necessary to perfect the Liens in favor of the
Collateral Agents in the Collateral and to release Liens in respect of the
Refinanced Agreements and other consents, authorizations, notices, approvals
and exemptions that have been obtained prior to or as of the Closing Date, no
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document to which it is a party.

 

Section
5.04  Binding Effect.  This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. 
This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms, except (i) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and (ii) that rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether
enforcement is sought by proceedings in equity or at law).

 

88

 

Section
5.05  Financial Condition; No Material Adverse
Effect.

 

(a)           Audited Financial Statements.  The Audited Financial Statements (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly
present in all material respects the financial condition of the Borrower and
its Subsidiaries as of the date thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein; and
(iii) show all material indebtedness and other liabilities, direct or
contingent, of the Borrower and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness.

 

(b)           Interim Financial Statements.  The unaudited consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of April 30, 2004 and the
related unaudited consolidated and consolidating statements of income and cash
flows for the six months then ended, copies of which have been delivered to
each of the Lenders, fairly present, in all material respects and in conformity
with GAAP applied on a basis consistent with the financial statements referred
to in subsection (a) of this Section 5.05 (except for the absence
of footnotes and normal year-end audit adjustments), the consolidated financial
position of the Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such six-month period
(subject to normal year-end audit adjustments). 
During the period from April 30, 2004 to and including the Closing Date,
there has been no sale, transfer or other disposition by the Borrower or any of
its Consolidated Subsidiaries of any material part of the business or property
(other than sales of inventory in the ordinary course of business) of the
Borrower and its Consolidated Subsidiaries, taken as a whole, and no purchase
or other acquisition by them of any business or property (including any Equity
Interests of any other Person) material in relation to the consolidated
financial condition of the Borrower and its Consolidated Subsidiaries, taken as
a whole, which is not reflected in the foregoing financial statements or in the
notes thereto.

 

(c)           Material Adverse Change.  Since the date of the Audited Financial
Statements, there has been no event or circumstance, either individually or in
the aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.

 

(d)           Pro-Forma Financial Statements.  The consolidated balance sheet of Holdings
and its Consolidated Subsidiaries as of April 30, 2004, prepared on a Pro-Forma
Basis giving effect to the consummation of the Transactions, has heretofore
been furnished to each Lender as part of the Pre-Commitment Information.  Such Pro-Forma balance sheet has been
prepared in good faith by the Borrower, based on the assumptions used to
prepare the pro-forma financial information contained in the Pre-Commitment
Information (which assumptions are believed by the Borrower on the date hereof
and on the Closing Date to be reasonable and fair in light of current
conditions and facts then known to the Borrower), is based on the best
information available to the Borrower as of the date of delivery thereof,
accurately reflects all material adjustments required to be made to give effect
to the Transactions and presents fairly on a Pro-Forma basis the estimated
consolidated financial position of Holdings and its Consolidated Subsidiaries
as of April 30, 2004 assuming that the Transaction had actually occurred on
that date.

 

(e)           Projections.  The projections prepared as part of, and
included in, the Pre-Commitment Information (which include projected balance
sheets and income and cash flow statements on a quarterly basis for the period
from the Closing Date through October 31, 2005 and on an annual basis for each
of the following four fiscal years) have been prepared on a basis consistent
with the financial statements referred to in subsection (a) above and
are based on good faith estimates and assumptions made by management of the
Borrower.  On the Closing Date, such
management believes that such projections are reasonable and attainable, it
being recognized by the Lenders, however, that projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by such projections may differ from the projected results and
that such differences may be material.

 

89

 

(f)            Post-Closing Financial Statements.  The financial statements delivered to the
Lenders pursuant to Section 6.01(a) and (b), if any, (i) have
been prepared in accordance with GAAP (except as may otherwise be permitted
under Section 6.01(a) and (b)) and (ii) present fairly (on the
basis disclosed in the footnotes to such financial statements, if any) in all
material respects the consolidated and consolidating financial condition,
results of operations and cash flows of Parent Holdings and its Consolidated
Subsidiaries as of the respective dates thereof and for the respective periods
covered thereby.

 

(g)           No Undisclosed Liabilities.  Except as fully reflected in the financial statements
described in subsection (a) and (b) above, for items disclosed on
Schedule 5.05 or Schedule 7.01 hereof and the Indebtedness
incurred under this Agreement, there were as of the Closing Date (and after
giving effect to any Loans made and Letters of Credit issued on such date), no
liabilities or obligations (excluding current obligations incurred in the
ordinary course of business) with respect to any Group Company of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due and including obligations or liabilities for taxes, long-term leases
and unusual forward or other long-term commitments).

 

Section
5.06  Litigation.  Except as specifically disclosed in Schedule
5.06, there are no actions, suits, investigations or legal, equitable,
arbitration or administrative proceedings pending or, to the knowledge of any
Loan Party, threatened against or affecting any Group Company in which there is
a reasonable possibility of an adverse decision that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect.

 

Section
5.07  No Default.  No
Group Company is in default under or with respect to any Contractual Obligation
that could reasonably be expected to have a Material Adverse Effect.  No Default has occurred and is continuing or
would result from the consummation of the transactions contemplated by this
Agreement.

 

Section
5.08  Ownership of Property; Liens.  Each Group Company
has good and marketable title to, or valid leasehold interests in, all its
material properties and assets, except for Permitted Liens and minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted.  All such material
properties and assets are free and clear of Liens other than Permitted
Liens.  Each Group Company has complied
with all obligations under all leases to which it is a party, other than those
the violation of which would not reasonably be expected to result in a Material
Adverse Effect, and all such leases are in full force and effect, other than
leases that, individually or in the aggregate, are not material to the Group
Companies, taken as a whole, and in respect of which the failure to be in full
force and effect will not result in a Material Adverse Effect. Each Group
Company enjoys peaceful and undisturbed possession under all such leases with
respect to which it is the lessee, other than leases that, individually or in
the aggregate, are not material to the Group Companies, taken as a whole, and
in respect of which the failure to enjoy peaceful and undisturbed possession
would not reasonably be expected to result in a Material Adverse Effect.

 

Section
5.09  Environmental Compliance.  No Group Company has
failed to comply with any Environmental Law or to obtain, maintain, or comply
with any permit, license or other approval required under any Environmental Law
or is subject to any Environmental Liability in any case which, individually or
collectively, could reasonably be expected to result in a Material Adverse
Effect or has received written notice of any claim with respect to any
Environmental Liability the subject of which notice could reasonably be
expected to have a material Adverse Effect, and no Group Company knows of any
basis for any Environmental Liability against any Group Company that could
reasonably be expected to have a Material Adverse Effect.

 

90

 

Section
5.10  Insurance.  The
properties of each Group Company are insured with financially sound and
reputable insurance companies not Affiliates of the Borrower, in such amounts
(after giving effect to any self-insurance compatible with the following
standards), with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar
properties in localities where the applicable Group Company operates.

 

Section
5.11  Taxes.  Each Group Company has filed, or caused to be
filed, all material federal, state, local and foreign tax returns required to
be filed and paid (i) all amounts of taxes shown thereon to be due (including
interest and penalties) and (ii) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangible taxes) owing by it, except for such taxes (A) which are
not yet delinquent or (B) that are being contested in good faith and by proper
proceedings diligently pursued, and against which adequate reserves are being
maintained in accordance with GAAP.  No
Loan Party knows of any pending investigation of such party by any taxing
authority or proposed tax assessments against any Group Company that would, if
made, have a Material Adverse Effect.

 

Section
5.12  ERISA; Foreign Pension Plans; Employee Benefit Arrangements.  Except as disclosed in Schedule 5.12:

 

(a)           ERISA.

 

(i)            There are
no Unfunded Liabilities in excess of the Threshold Amount (A) with respect
to any member of the Group Companies and (B) with respect to any ERISA
Affiliate; provided that for purposes of this Section 5.12(a)(i)(B)
only, Unfunded Liabilities shall mean the amount (if any) by which the
projected benefit obligation exceeds the value of the plan’s assets as of its
last valuation date using the actuarial assumptions and methods being used by
the Plans’ actuaries for making such determination.

 

(ii)           Each Plan,
other than a Multiemployer Plan, complies in all respects with the applicable
requirements of ERISA and the Code, and each Group Company complies in all
respects with the applicable requirements of ERISA and the Code with respect to
all Multiemployer Plans to which it contributes, except to the extent that the
failure to comply therewith would not reasonably be expected to have a Material
Adverse Effect.

 

(iii)          No
ERISA Event has occurred or, subject to the passage of time, is reasonably
expected to occur with respect to any Plan maintained by any member of the
Group Companies and, except to the extent that such ERISA Event would not
reasonably be expected to have a Material Adverse Effect, no ERISA Event has
occurred or, subject to the passage of time, is reasonably expected to occur
with respect to any Plan maintained by an ERISA Affiliate.

 

(iv)          No Group
Company:  (A) is or has been within the
last six years a party to any Multiemployer Plan; or (B) has completely or
partially withdrawn from any Multiemployer Plan.

 

(v)           If any
Group Company or any ERISA Affiliate were to incur a complete withdrawal (as
described in Section 4203 of ERISA) from any Multiemployer Plan as of the
Closing Date, the aggregate withdrawal liability, as determined under Section
4201 of ERISA, with respect to all such Multiemployer Plans would not exceed
$2,500,000.

 

(vi)          The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereunder will not involve any transaction that is
subject to the

 

91

 

prohibitions of
Section 406 of ERISA or in connection with which taxes could be imposed
pursuant to Section 4975(c)(1)(A)-(D) of the Code, for which an exemption under
ERISA does not apply.

 

(vii)         No
Group Company has any contingent liability with respect to any post-retirement
benefit under a Welfare Plan that could reasonably be expected to have a
Material Adverse Effect.

 

(b)           Foreign Pension Plans. Each Foreign
Pension Plan has been maintained in material compliance with its terms and with
the 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 except to the extent that the failure to
comply therewith would not reasonably be expected to have a Material Adverse
Effect.  No Group Company has incurred
any material obligation in connection with the termination of or withdrawal
from any Foreign Pension Plan.

 

(c)           Employee Benefit Arrangements.

 

(i)            All
liabilities under the Employee Benefit Arrangements are (A) funded to at least
the minimum level required by Law or, if higher, to the level required by the terms
governing the Employee Benefit Arrangements, (B) insured with a reputable
insurance company, (C) provided for or recognized in the financial statements
most recently delivered to the Administrative Agent pursuant to Section 6.01
hereof or (D) estimated in the formal notes to the financial statements most
recently delivered to the Administrative Agent pursuant to Section 6.01
hereof, where such failure to fund, insure provide for, recognize or estimate
the liabilities arising under such arrangements could reasonably be expected to
have a Material Adverse Effect.

 

(ii)           There are
no circumstances which may give rise to a liability in relation to the Employee
Benefit Arrangements which are not funded, insured, provided for, recognized or
estimated in the manner described in clause (i) above and which could
reasonably be expected to have a Material Adverse Effect.

 

(iii)          Each
Group Company is in material compliance with all applicable Laws, trust
documentation and contracts relating to the Employee Benefit Arrangements.

 

Section
5.13  Subsidiaries.  Schedule 5.13 sets forth a complete
and accurate list as of the Closing Date of all Subsidiaries of Holdings.  Schedule 5.13 sets forth as of the
Closing Date the jurisdiction of formation of each such Subsidiary, whether
each such Subsidiary is a Subsidiary Guarantor, the number of authorized shares
of each class of Equity Interests of each such Subsidiary, the number of
outstanding shares of each class of Equity Interests, the number and percentage
of outstanding shares of each class of Equity Interests of each such Subsidiary
owned (directly or indirectly) by any Person and the number and effect, if
exercised, of all Equity Equivalents of each such Subsidiary.  All the outstanding Equity Interests of each
Subsidiary of Holdings are validly issued, fully paid and non-assessable and
were not issued in violation of the preemptive rights of any shareholder and,
as of the Closing Date, are owned by Holdings, directly or indirectly, free and
clear of all Liens (other than those arising under the Collateral
Documents).  Other than as set forth on Schedule
5.13, as of the Closing Date, no such Subsidiary has outstanding any Equity
Equivalents nor does any such Person have outstanding any rights to subscribe
for or to purchase or any options for the purchase of, or any agreements
providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its Equity Interests.  Holdings has no Subsidiaries, other than the
Borrower and its Subsidiaries.

 

92

 

Section
5.14  Margin Regulations; Investment Company
Act; Public Utility Holding Company Act.

 

(a)           None
of Holdings and its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing
or carrying “margin stock” within the meaning of Regulation U.  No part of the Letters of Credit or proceeds
of the Loans will be used, directly or indirectly, for the purpose of
purchasing or carrying any “margin stock” within the meaning of Regulation
U.  If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in Regulation U.  No indebtedness being reduced or retired out
of the proceeds of the Loans was or will be incurred for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U or
any “margin security” within the meaning of Regulation T.  “Margin stock” within the meaning of
Regulation U does not constitute more than 25% of the value of the consolidated
assets of Holdings and its Consolidated Subsidiaries.  None of the transactions contemplated by this
Agreement (including the direct or indirect use of the proceeds of the Loans)
will violate or result in a violation of the Securities Act, the Exchange Act
or Regulation T, U or X.

 

(b)           None
of the Group Companies is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act or the Investment Company
Act of 1940, each as amended.  In
addition, none of the Group Companies is (i) an “investment company” registered
or required to be registered under the Investment Company Act of 1940, as
amended, (ii) controlled by such a company, or (iii) a “holding company”, a
“subsidiary company” of a “holding company”, or an “affiliate” of a “holding
company” or of a “subsidiary” of a “holding company”, within the meaning of the
Public Utility Holding Company Act of 1934, as amended.

 

Section
5.15  Disclosure.  No written information or written data
(excluding financial projections, budgets, estimates and general market data)
made by any Loan Party in any Loan Document or furnished to the Administrative
Agent or any Lender by or on behalf of any Loan Party in connection with any
Loan Document, when taken as a whole contains any untrue statement of a
material fact or omits any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
materially misleading in light of the circumstances under which such statements
were made; provided that (i) to the extent any such statement,
information or report therein was based upon or constitutes a forecast or
projection, the Borrower represents only that it acted in good faith and
utilized assumptions believed by it to be reasonable at the time made (it being
understood and agreed that projections as to future events are not to be viewed
as facts or guaranties of future performance, that actual results during the
period or periods covered by such projections may differ from the projects
results and that such differences may be material and that the Loan Parties
make no representation that such representations will in fact be realized) and
(ii) as to statements, information and reports specified as having been
supplied by third parties, other than Affiliates of the Borrower or any of its
Subsidiaries, the Borrower represents only that it is not aware of any material
misstatement or omission therein.

 

Section
5.16  Compliance with Law.  Each Group Company is in compliance with all
requirements of Law (including Environmental Laws) applicable to it or to its
properties, except for any such failure to comply which could not reasonably be
expected to cause a Material Adverse Effect. 
To the knowledge of the Loan Parties, none of the Group Companies or any
of their respective material properties or assets is subject to or in default
with respect to any judgment, writ, injunction, decree or order of any court or
other Governmental Authority which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.  As of the Closing Date, except as disclosed
in Schedule 5.16, none of the Group Companies has received any written
communication from any Governmental Authority that alleges that any of the
Group Companies is not in compliance in any

 

93

 

material respect with any Law, except for allegations
that have been satisfactorily resolved and are no longer outstanding or which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

Section
5.17  Intellectual Property.  Except as set forth on Schedule 5.17,
the Borrower and its Subsidiaries own, or possess the right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other rights that are reasonably necessary for the
operation of their respective businesses, without conflict with the rights of
any other Person except for those conflicts which could not reasonably be
expected to have a Material Adverse Effect. 
To the best knowledge of the Borrower, no slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Borrower or any Subsidiary
infringes in any material respect upon any rights held by any other Person.

 

Section
5.18  Purpose of Loans and Letters of Credit.  The proceeds of the
Term B Loans, the Second Lien Loans and any Revolving Loans made on the Closing
Date will be used solely to effect the Foothill Refinancing, the Mezzanine Debt
Refinancing, the Preferred Stock Redemption and the Equity Distribution under
and pursuant to the Recapitalization Agreement, to refinance other existing
Indebtedness of the Borrower and its Subsidiaries and to pay fees and expenses
incurred in connection with the transactions contemplated hereby.  The proceeds of the Revolving Loans, Swing
Line Loans and any Term B Loans comprising part of a Facilities Increase made
after the Closing Date will be used solely to provide for the working capital
requirements of the Borrower and its Subsidiaries and for the general corporate
purposes of the Borrower and its Subsidiaries, including Permitted
Acquisitions.  The Letters of Credit
shall be used only for or in connection with appeal bonds, reimbursement obligations
arising in connection with surety and reclamation bonds, reinsurance, domestic
or international trade transactions and other obligations relating to
transactions entered into by the Borrower and its Subsidiaries in the ordinary
course of business.

 

Section
5.19  Labor Matters.  There are no strikes against Holdings or any
of its Subsidiaries, other than any strikes that could not reasonably be
expected to result in a Material Adverse Effect.  All payments due from Holdings or any of its
Subsidiaries, or for which any claim may be made against Holdings or any of its
Subsidiaries, on account of wages and employee health and welfare insurance and
other benefits have been paid or accrued as a liability on the books of
Holdings and its Subsidiaries, as applicable. 
The consummation of the Transactions will not give rise to a right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which Holdings or any of its Subsidiaries is
a party or by which Holdings or any of its Subsidiaries (or any predecessor) is
bound, other than collective bargaining agreements which, individually or in
the aggregate, are not material to Holdings and its Subsidiaries taken as a
whole.

 

Section
5.20  Solvency and Surplus.  The Loan Parties are and, after consummation
of the Transactions, will be Solvent. 
The total amount of the Preferred Stock Redemption and the Equity
Distribution will not exceed the aggregate amount of funds of the Borrower
legally available therefor at the time of consummation of the Recapitalization.

 

Section
5.21  Collateral Documents.

 

(a)           Article 9 Collateral.  Each of the Security Agreement and the Pledge
Agreement is effective to create in favor of the Senior Collateral Agent, for
the ratable benefit of the holders from time to time of the Senior Obligations,
and in favor of the Second Lien Collateral Agent, for the ratable benefit of
the holders from time to time of the Second Lien Obligations, a legal, valid
and enforceable Requisite Priority Lien in the Collateral described therein
and, when financing statements in appropriate form are filed in the offices
specified on Schedule 4.01 to the Security Agreement and the Pledged

 

94

 

Collateral is delivered to the Applicable Collateral Agent, each of the
Security Agreement and the Pledge Agreement shall constitute a fully perfected
Requisite Priority Lien on, and security interest in, all right, title and
interest of the grantors thereunder in such of the Collateral in which a
security interest can be perfected under Article 9 of the Uniform Commercial
Code.

 

(b)           Intellectual Property.  When financing statements in the appropriate
form are filed in the offices specified on Schedule 4.01 to the Security
Agreement, the Patents and Trademark Agreement, substantially in the form of
Exhibit A to the Security Agreement, is filed in the United States Patent and
Trademark Office and the Copyright Agreement, substantially in the form of
Exhibit B to the Security Agreement, is filed in the United States Copyright
Office, the Security Agreement shall constitute a fully perfected Requisite
Priority Lien on, and security interest in, all right, title and interest of
the grantors thereunder in the United States patents, trademarks, copyrights,
licenses and other intellectual property rights, and all registrations and
applications relating thereto, covered in such Patent and Trademark Agreement
and Copyright Agreement (it being understood that subsequent recordings in the
United States Patent and Trademark Office and the United States Copyright
Office may be necessary to perfect a lien on registered patents, patent
applications, trademarks, trademark applications and registered copyrights
acquired by the Loan Parties after the Closing Date).

 

(c)           Status of Liens.  As of the Closing Date, no filings or
recordings are required in order to perfect the security interests created
under the Collateral Documents, except for filings or recordings listed on
Schedule 4.01 to the Security Agreement.

 

Section
5.22  Ownership.

 

(a)           Securities of the Borrower.  Holdings owns good, valid and marketable
title to all the outstanding common stock of the Borrower, free and clear of
all Liens of every kind, whether absolute, matured, contingent or otherwise,
other than those arising under the Collateral Documents.  Except as set forth on Schedule 5.22,
as of the Closing Date there are no shareholder agreements or other agreements
pertaining to Holdings’ beneficial ownership of the common stock of the
Borrower, including any agreement that would restrict Holdings’ right to
dispose of such common stock and/or its right to vote such common stock.

 

(b)           Parent Holdings Equity Interests.  Schedule 5.22 sets forth a true and
accurate list as of the Closing Date of each holder of any Equity Interest or
Equity Equivalent of Parent Holdings, indicating the name of each such holder
and the Equity Interest or Equity Equivalent held by each such Person.  Except as set forth on Schedule 5.22,
there are no shareholders agreements or other agreements pertaining to the
Investor Group’s beneficial ownership of the common stock of Parent Holdings,
including any agreement that would restrict the Investor Group’s right to
dispose of such common stock and/or its right to vote such common stock.  Parent Holdings owns good, valid and
marketable title to all the outstanding common stock of Holdings, free and
clear of all Liens of every kind, whether absolute, matured, contingent or
otherwise.

 

Section
5.23  Certain Transactions.  Except as disclosed on Schedule
5.23, no broker’s or finder’s fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby as a
result of any action by or on behalf of the Borrower or their Affiliates, and
each of Holdings and the Borrower hereby indemnifies each Agent and each Lender
against, and agrees that it will hold each Agent and each Lender harmless from,
any claim, demand or liability for any such broker’s or finder’s fees alleged
to have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.

 

95

 

ARTICLE
VI

AFFIRMATIVE COVENANTS

 

Each of Holdings and the Borrower agrees that so long
as any Lender has any Commitment hereunder, any Credit Obligation or other
amount payable hereunder or under any Note or other Loan Document or any L/C
Obligation (in each case other than contingent indemnification obligations)
remains unpaid or any Letter of Credit remains in effect:

 

Section
6.01  Financial Statements.  The Borrower will furnish, or cause to be
furnished, to the Administrative Agent for further distribution to each of the
Lenders:

 

(a)           Annual Financial Statements.  As soon as available, and in any event within
90 days after the end of each fiscal year of Parent Holdings (commencing with
the fiscal year ending October 31, 2004), a consolidated and consolidating balance
sheet and income statement of Parent Holdings and its Consolidated
Subsidiaries, as of the end of such fiscal year, and the related consolidated
and consolidating statement of operations and retained earnings and
consolidated statement of cash flows for such fiscal year, setting forth in
comparative form consolidated and consolidating figures for the preceding
fiscal year, all such financial statements to be in reasonable form and detail
and (in the case of such consolidated financial statements) audited by
independent certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent and accompanied by an opinion
of such accountants (which shall not be qualified or limited in any material
respect) to the effect that such consolidated financial statements have been
prepared in accordance with GAAP and present fairly in all material respects
the consolidated financial position and consolidated results of operations and
cash flows of Parent Holdings and its Consolidated Subsidiaries in accordance
with GAAP consistently applied (except for changes with which such accountants
concur).

 

(b)           Quarterly Financial Statements.  As soon as available, and in any event within
45 days after the end of each of the first three fiscal quarters in each fiscal
year of Parent Holdings (commencing with fiscal quarter ended July 31, 2004), a
consolidated and consolidating balance sheet of Parent Holdings and its
Consolidated Subsidiaries as of the end of such fiscal quarter, together with
related consolidated and consolidating statement of operations and retained
earnings and consolidated statement of cash flows for such fiscal quarter and
the then elapsed portion of such fiscal year, setting forth in comparative form
consolidated and consolidating figures for the corresponding periods of the
preceding fiscal year, all such financial statements to be in form and detail
and reasonably acceptable to the Administrative Agent, and accompanied by a
certificate of the chief financial officer of Parent Holdings to the effect
that such quarterly financial statements have been prepared in accordance with
GAAP and present fairly in all material respects the consolidated financial
position and consolidated results of operations and cash flows of Parent
Holdings and its Consolidated Subsidiaries in accordance with GAAP consistently
applied, subject to changes resulting from normal year-end audit adjustments
and the absence of footnotes required by GAAP.

 

As to any information contained in materials furnished
pursuant to Section 6.02(d), the Borrower shall not be separately
required to furnish such information under Section 6.01(a) or (b),
but the foregoing shall not be in derogation of the obligation of the Borrower
to furnish the information and materials described in Section 6.01(a) or
(b) at the times specified therein.

 

Section
6.02  Certificates; Other Information.  The Borrower will furnish, or cause to be
furnished, to the Administrative Agent for further distribution to each of the
Lenders, in form and detail reasonably satisfactory to them:

 

96

 

(a)           Auditors’ Certificate.  Concurrently with the delivery of the
financial statements referred to in Section 6.01(a), a certificate of
its independent certified public accountants certifying such financial
statements and (unless such accountants are prohibited by law or the Financial
Accounting Standards Board (or any successor) from providing such statement)
stating that in the course of the audit upon which their opinion on such
financial statements was based (but without any special or additional audit
procedures for the purpose), they obtained knowledge of no condition or event
relating to financial matters which constitutes a Default or an Event of Default
or, if such accountants shall have obtained in the course of such audit
knowledge of any such Default or Event of Default, disclosing in such written
statement the nature and period of existence thereof, it being understood that
such accountants shall be under no liability, directly or indirectly, to the
Lenders for failure to obtain knowledge of any such condition or event.

 

(b)           Compliance Certificate.  At the time of delivery of the financial
statements provided for in Sections 6.01(a) and 6.01(b) above
(commencing with the delivery of the financial statements for the fiscal
quarter ended July 31, 2004), a Compliance Certificate of the chief executive
officer or the chief financial officer of Holdings (i) demonstrating compliance
with the financial covenants contained in Section 7.17 by calculation
thereof as of the end of the fiscal period covered by such financial
statements, (ii) stating that no Event of Default exists, or if any Event of
Default does exist, specifying the nature and extent thereof and what action
the Borrower proposes to take with respect thereto and (iii) stating whether,
since the date of the most recent financial statements delivered hereunder,
there has been any material change in the GAAP applied in the preparation of
the financial statements of Holdings and its Consolidated Subsidiaries, and, if
so, describing such change.  At the time
such certificate is required to be delivered, the Borrower shall promptly
deliver to the Administrative Agent, at the Administrative Agent’s Office,
information regarding any change in the Leverage Ratio that would change the
then existing Applicable Margin.

 

(c)           Auditor’s Reports.  Promptly upon receipt thereof, a copy of any
detailed audit reports, management letters or recommendations submitted to the
board of directors (or the audit committee of the board of directors) of any
Group Company by independent accountants in connection with the accounts or
books of any Group Company, or any audit of any of them;

 

(d)           SEC Reports.  Promptly after the same are available, copies
of each annual report, proxy or financial statement or other report or
communication sent to the stockholders of Parent Holdings generally, and copies
of all annual, regular, periodic and special reports and registration statements
which any Group Company may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise
required to be delivered to the Administrative Agent pursuant hereto.

 

(e)           Annual Business Plan and Budgets.  At least 30 days after the end of each fiscal
year of Parent Holdings, beginning with the fiscal year ending October 31,
2004, an annual business plan and budget of Parent Holdings and its
Consolidated Subsidiaries containing, among other things, projected financial
statements for the next fiscal year.

 

(f)            Excess Cash Flow.  Within 100 days after the end of each fiscal
year of Holdings, commencing with the fiscal year ending October 31, 2005, a
certificate of the chief financial officer of Holdings containing information
regarding the calculation of Excess Cash Flow for such fiscal year (or, in the
case of the certificate for the fiscal year ending October 31, 2005, a
calculation of Excess Cash Flow for the five-quarter period commencing on August
1, 2004).

 

(g)           Employee Benefit Reports.  Promptly after the same are available, the
most recently prepared actuarial reports in relation to the Plans and Employee
Benefit Arrangements for the

 

97

 

time being operated by Group Companies, and within 30 days of the same
becoming available, the most recently prepared actuarial reports in relation to
the Foreign Pension Plans, which are prepared in order to comply with the then
current statutory or auditing requirements within the relevant jurisdiction
other than with respect to Foreign Pension Plans where the aggregate Unfunded
Liabilities of such Foreign Pension Plans are less than $750,000.  If requested by the Administrative Agent, the
Borrower will promptly instruct an actuary to prepare such actuarial reports
and deliver those to the Administrative Agent, if the Administrative Agent has
reasonable grounds for believing that any relevant statutory or auditing
requirement within the relevant jurisdiction is not being complied with.  Promptly upon request, the Borrower shall
also furnish the Administrative Agent and the Lenders with such additional
information concerning any Plan, Foreign Pension Plan or Employee Benefit Arrangement
as may be reasonably requested, including, but not limited to, with respect to
any Plans, copies of each annual report/return (Form 5500 series), as well as
all schedules and attachments thereto required to be filed with the Department
of Labor pursuant to ERISA and the Code, respectively, for each “plan year”
(within the meaning of Section 3(39) of ERISA).

 

(h)           Environmental Reports.  Promptly after any Group Company learning of
any of the following, written notice of each of the following:

 

(i)            that any
Group Company is or may be liable to any Person as a result of a Release or
threatened Release that could reasonably be expected to subject such Loan Party
or such Subsidiary to Environmental Liabilities exceeding $2,500,000;

 

(ii)           the
receipt by any Group Company of notification that any real or personal property
of such Group Company is or is reasonably likely to be subject to any Lien;
securing any Environmental Liability;

 

(iii)          the
receipt by any Group Company of any notice of violation of or potential
liability under, or knowledge by such Group Company that there exists a
condition that could reasonably be expected to result in a violation of or
liability under, any Environmental Law, except for violations and liabilities
the consequence of which, in the aggregate, would not be reasonably likely to
subject Holdings and its Consolidated Subsidiaries collectively to
Environmental Liabilities exceeding $2,500,000;

 

(iv)          the
commencement of any judicial or administrative proceeding or investigation
alleging a violation of or liability under any Environmental Law, that, in the
aggregate, if adversely determined, would have a reasonable likelihood of
subjecting Holdings and its Consolidated Subsidiaries collectively to
Environmental Liabilities exceeding $2,500,000;

 

(v)           any
proposed acquisition of stock, assets or real estate, any proposed leasing of
property or any other action by any Group Company other than those the
consequences of which, in the aggregate, do not have a reasonable likelihood of
subjecting Holdings and its Consolidated Subsidiaries collectively to
Environmental Liabilities exceeding $2,500,000;

 

(vi)          any
proposed action by any Group Company or any proposed change in Environmental
Laws that, in the aggregate, have a reasonable likelihood of requiring any
Group Company to obtain additional environmental, health or safety Permits or
make additional capital improvements to obtain compliance with Environmental
Laws that, in the aggregate, would have cost $1,000,000 or more or that shall
subject Holdings and it Consolidated Subsidiaries to additional Environmental
Liabilities exceeding $2,500,000; and

 

98

 

(vii)         upon
written request by any Lender through the Administrative Agent, a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
delivered pursuant to this Agreement.

 

(i)            Additional Patents, Trademarks and Copyrights.  At the time of delivery of the financial
statements and reports provided for in Section 6.01(a), a report signed
by the chief financial officer of the Borrower setting forth (i) a list of
registration numbers for all patents, trademark registrations, service mark
registrations, registered tradenames and copyright registrations awarded to the
Borrower or any Domestic Subsidiary since the last day of the immediately
preceding fiscal year of Holdings and (ii) a list of all patent applications,
trademark applications, service mark applications, trade name applications and copyright
applications submitted by the Borrower or any Domestic Subsidiary since the
last day of the immediately preceding fiscal year and the status of each such
application, all in such form as shall be reasonably satisfactory to the
Administrative Agent.

 

(j)            Domestication in Other Jurisdiction.  Not less than 30 days prior to any change in
the jurisdiction of organization of any Loan Party, a copy of all documents and
certificates intended to be filed or otherwise executed to effect such change.

 

(k)           Other Information.  With reasonable promptness upon request
therefor, such other information regarding the business, properties or
financial condition of any Group Company as the Administrative Agent or any
Lender may reasonably request, which may include such information as any Lender
may reasonably determine is necessary or advisable to enable it either (i) to
comply with the policies and procedures adopted by it and its Affiliates to
comply with the Bank Secrecy Act, the U.S. Patriot Act and all applicable
regulations thereunder or (ii) to respond to requests for information
concerning Holdings and its Subsidiaries from any governmental, self-regulatory
organization or financial institution in connection with its anti-money
laundering and anti-terrorism regulatory requirements or its compliance
procedures under the U.S. Patriot Act, including in each case information
concerning the Borrower’s direct and indirect shareholders and its use of the
proceeds of the Credit Extensions hereunder.

 

(l)            Labeling and Treatment of Certain Information.  Each of Holdings and the Borrower hereby
acknowledges that (i) the Administrative Agent and/or the Joint Lead Arrangers
will make available to the Lenders and the L/C Issuers materials and/or
information provided by or on behalf of Holdings and the Borrower hereunder
(collectively, “Group Company Materials”) by posting the Group Company
Materials on IntraLinks or another similar electronic system (the “Platform”)
and (ii) certain of the Lenders may be “public-side” Lenders (i.e., Lenders
that do not wish to receive material non-public information with respect to
Holdings, the Borrower or their respective securities) (each, a “Public
Lender”).  Each of Holdings and the
Borrower hereby agrees that:  (i) all
Group Company Materials that are to be made available to Public Lenders shall
be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean
that the word “PUBLIC” shall appear prominently on the first page thereof; (ii)
by marking Group Company Materials “PUBLIC,” each of Holdings and the Borrower
shall be deemed to have authorized the Administrative Agent, the Joint Lead
Arrangers, the L/C Issuers and the Lenders to treat such Group Company
Materials as either publicly available information or not material information
(although it may be sensitive and proprietary) with respect to Holdings, the
Borrower or their securities for purposes of United States federal and state
securities laws; (iii) all Group Company Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated
“Public Investor,” and (iv) the Administrative Agent and the Joint Lead
Arrangers shall be entitled to treat any Group Company Materials that are not
marked “PUBLIC” as being suitable only for posting on a portion of the Platform
not designated “Public Investor.

 

99

 

Documents required to be delivered pursuant to Section
6.01(a) or (b) or Section 6.02(d) (to the extent any such
documents are included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the
website address listed on Schedule 10.02; or (ii) on which such
documents are posted on the Borrower’s behalf on an Internet or Intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrower shall deliver
paper copies of such documents to the Administrative Agent until a written
request to cease delivering paper copies is given by the Administrative Agent
and (ii) the Borrower shall notify (which may be by facsimile or electronic
mail) the Administrative Agent and each Lender of the posting of any such
documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in
every instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section 6.02(c) to the
Administrative Agent.  Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

 

Section
6.03  Notices.  The Borrower
will promptly notify the Administrative Agent and each Lender:

 

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

 

(ii)           of (A)
breach or non-performance of, or any default under, any material Contractual
Obligation of Holdings or any of its Subsidiaries, (B) any dispute, litigation,
investigation, proceeding or suspension between Holdings or any of its
Subsidiaries and any Governmental Authority, (C) the commencement of, or any
material adverse development in, any litigation or proceeding affecting
Holdings or any of its Subsidiaries, including pursuant to any applicable
Environmental Law, (D) any litigation, investigation or proceeding affecting
any Loan Party and (E) and any other matter, event or circumstance, in each
case to the extent that the same could reasonably be expected to result in a
Material Adverse Effect;

 

(iii)          of
the occurrence of any ERISA Event and of: (A) any event or condition that
constitutes, or is reasonably likely to lead to, an ERISA Event; or (B) any
change in the funding status of any Plan or Foreign Pension Plan that would
reasonably be expected to have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such notice and a
statement by the chief financial officer of the Borrower briefly setting forth
the details regarding such event, condition or notice and the action, if any,
which has been or is being taken or is proposed to be taken by the Borrower or
one or more other Loan Parties with respect thereto; or (C) any event or
condition that constitutes, or is reasonably likely to lead to, an event
described in Section 8.01(h)(iii)-(viii); and

 

(iv)          of any
material change in accounting policies or financial reporting practice by
Holdings or any of its Subsidiaries.

 

Each notice pursuant to this Section 6.03 shall
be accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto.  Each notice pursuant to Section 6.03(a)
shall describe with particularity any and all provisions of this Agreement or
the other Loan Documents that have been breached.

 

100

 

Section
6.04  Payment of Obligations.
 Each of the Group Companies
will pay and discharge (i) all material taxes, assessments and other
governmental charges or levies imposed upon it, or upon its income or profits,
or upon any of its properties, before they shall become delinquent, (ii) all
lawful claims (including claims for labor, materials and supplies) which, if unpaid,
might give rise to a Lien (other than a Permitted Lien) upon any of its
properties and (iii) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no
Group Company shall be required to pay any such tax, assessment, charge, levy,
claim or Indebtedness which is being contested in good faith by appropriate
proceedings diligently pursued and as to which adequate reserves have been
established in accordance with GAAP, unless the failure to make any such
payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) could reasonably be expected to have a Material
Adverse Effect.

 

Section
6.05  Preservation of Existence Etc.  Except as a result of
or in connection with a dissolution, merger or disposition of a Subsidiary of
the Borrower permitted under Section 7.04 or Section 7.05, each
Group Company will: (i) preserve, renew and maintain in full force and effect
its legal existence and good standing under the Laws of the jurisdiction of its
organization; (ii) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except in the case of clause (i) or (ii)
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (iii) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.

 

Section
6.06  Maintenance of Properties. 
Each Group Company will: (i) maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear and Casualty and
Condemnation excepted; and (ii) make all necessary repairs thereto and renewals
and replacements thereof except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.

 

Section
6.07  Insurance; Certain Proceeds.

 

(a)           Insurance Policies.  Each of the Group Companies will at all times
maintain in full force and effect insurance (including worker’s compensation
insurance, liability insurance, casualty insurance and business interruption
insurance) in such amounts, covering such risk and liabilities and with such
deductibles or self-insurance retentions as are in accordance with normal
industry practice.  The Collateral Agents
shall be named as loss payees or mortgagees, as their interest may appear, with
respect to all such property and casualty policies and additional insured with
respect to all business interruption or casualty policies, and each provider of
any such insurance shall agree, by endorsement upon the policy or policies
issued by it or by independent instruments furnished to the Collateral Agents,
that if the insurance carrier shall have received written notice from the
Applicable Collateral Agent of the occurrence and continuance of an Event of
Default, the insurance carrier shall pay all proceeds otherwise payable to
Holdings or one or more of its Subsidiaries under such policies directly to the
Applicable Collateral Agent (which agreement shall be evidenced by a “standard”
or “New York” lender’s loss payable endorsement in the names of the Collateral
Agents on Accord Form 27) and that it will give the Applicable Collateral Agent
30 days’ prior written notice before any such policy or policies shall be
altered or canceled, and that no act or default of any Group Company or any
other Person shall affect the rights of the Collateral Agents or the Lenders
under such policy or policies.

 

(b)           Loss Events.  In case of any Casualty or Condemnation with
respect to any property of any Group Company or any part thereof having a fair
market value in excess of $2,500,000, the Borrower shall promptly give written
notice thereof to the Administrative Agent generally describing the nature and
extent of such damage, destruction or taking. 
In such case, the Borrower shall, or shall

 

101

 

cause such Group Company to, promptly repair, restore or replace the
property of such Person (or part thereof) which was subject to such Casualty or
Condemnation, at such Person’s cost and expense, whether or not the Insurance
Proceeds or Condemnation Award, if any, received on account of such event shall
be sufficient for that purpose; provided, however, that such
property need not be repaired, restored or replaced to the extent the failure
to make such repair, restoration or replacement (i)(A) is desirable to the
proper conduct of the business of such Person in the ordinary course and
otherwise in the best interest of such Person and (B) would not materially
impair the rights and benefits of the Collateral Agents or the Finance Parties
under the Collateral Documents or any other Loan Document or (ii) the failure
to repair, restore or replace the property is attributable to the application
of the Insurance Proceeds from such Casualty or the Condemnation Award from
such Condemnation to payment of the Credit Obligations in accordance with the
following provisions of this Section 6.07(b).  If Holdings or any of its Subsidiaries shall
receive any Insurance Proceeds from a Casualty or Condemnation Award from a Condemnation
Award exceeding $2,500,000 in respect of the single event or series of related
events giving rise thereto, such Person will promptly pay over such proceeds to
the Administrative Agent, for payment of the Credit Obligations in accordance
with Section 2.09(b) or, if such funds constitute Reinvestment Funds, to
be held by the Applicable Collateral Agent in the Reinvestment Funds Account
established under the Security Agreement. 
The Administrative Agent agrees to cause the Applicable Collateral Agent
to release such Insurance Proceeds or Condemnation Awards to the Borrower upon
its request and as needed from time to time to pay for the repair, restoration
or replacement of the portion of the property subject to such Casualty or
Condemnation if, but only if, the conditions set forth in the definition of
“Reinvestment Funds” are satisfied at the time of such request.

 

Section
6.08  Compliance with Laws.  Each of the Group Companies will comply with
all requirements of Law applicable to it and its properties to the extent that
noncompliance with any such requirement of Law would reasonably be expected to
have a Material Adverse Effect.  Without
limiting the generality of the foregoing, each of the Group Companies will do
each of the following as it relates to any Plan maintained by, or Multiemployer
Plan contributed to by, each of the Group Companies, Foreign Pension Plan or
Employee Benefit Arrangement: 
(i) maintain each Plan (other than a Multiemployer Plan), Foreign
Pension Plan and Employee Benefit Arrangement in compliance in all material
respects with the applicable provisions of ERISA, the Code or other Federal,
state or foreign Law; (ii) cause each Plan (other than a Multiemployer
Plan) which is qualified under Section 401(a) of the Code to maintain such
qualifications; (iii) make all required contributions to any Plan subject
to Section 412 of the Code and make all required contributions to Multiemployer
Plans; (iv) ensure that there are no Unfunded Liabilities in excess of
$5,000,000 unless the aggregate amount of such Unfunded Liabilities is reduced
below $5,000,000 within a 30-day period; (v) except for the obligations set
forth on Schedule 5.12, not become a party to any Multiemployer Plan;
(vi) make all contributions (including any special payments to amortize any
Unfunded Liabilities) required to be made in accordance with all applicable
laws and the terms of each Foreign Pension Plan in a timely manner;
(vii) ensure that all liabilities under all Employee Benefit Arrangements
are either (A) funded to at least the minimum level required by law or, if
higher, to the level required by the terms governing the Employee Benefit
Arrangements; (B) insured with a reputable insurance company; or (C) provided
for or recognized in the financial statements most recently delivered to the
Administrative Agent under Section 6.01(a) or (b); and (vii)
ensure that the contributions or premium payments to or in respect of all
Employee Benefit Arrangements are and continue to be promptly paid at no less
than the rates required under the rules of such arrangements and in accordance
with the most recent actuarial advice received in relation to the Employee
Benefit Arrangement and generally in accordance with applicable Law; and (ix)
shall use its reasonable efforts to cause each of its ERISA Affiliates to do
each of the items listed in clauses (i) through (iv) above as it
relates to Plans and Multiemployer Plans maintained by or contributed to by its
ERISA Affiliates such that there shall be no liability to a Group Company by
virtue of such ERISA Affiliate’s acts or failure to act.

 

102

 

Section
6.09  Books and Records; Lender Meeting.  Each of the Group
Companies will keep complete and accurate books and records of its transactions
in accordance with good accounting practices on the basis of GAAP (including
the establishment and maintenance of appropriate reserves).  Unless the Administrative Agent shall notify
the Borrower that no meeting is required, within 90 days after the end of each
fiscal year of the Borrower, the Borrower will conduct a meeting of the Lenders
to discuss such fiscal year’s results and the financial condition of the
Borrower and its Consolidated Subsidiaries. 
The chief executive officer and the chief financial officer of the
Borrower and such other officers of the Borrower as the Borrower’s chief
executive officer shall designate shall be present at each such meeting.  Such meetings shall be held at times and places
convenient to the Lenders and to the Borrower.

 

Section
6.10  Inspection Rights.  Upon reasonable notice and during normal
business hours (but no more frequently than twice per year unless an Event of
Default has occurred and is continuing), each of the Group Companies will
permit representatives appointed by the Agents, including agents, employees,
attorneys and appraisers, to visit and inspect its property, including its
books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and
to write down and record any information such representatives obtain and shall
permit the Agents or such representatives to investigate and verify the
accuracy of information provided to the Lenders and to discuss all such matters
with the officers, employees, independent accountants, attorneys and
representatives of the Group Companies.

 

Section
6.11  Use of Proceeds.  The Borrower will use the proceeds of the
Loans and will use the Letters of Credit solely for the purposes set forth in Section
5.18.

 

Section
6.12  Additional Loan Parties; Additional
Security.

 

(a)           Additional Subsidiary Guarantors.  Each of Holdings and the Borrower will take,
and will cause each of its Subsidiaries (other than Foreign Subsidiaries,
except to the extent provided in subsection (d) below) to take, such
actions from time to time as shall be necessary to ensure that all Subsidiaries
of Holdings (other than the Borrower and Foreign Subsidiaries, except to the
extent provided in subsection (d) below) are Subsidiary Guarantors.  Without limiting the generality of the
foregoing, if any Group Company shall form or acquire any new Subsidiary, the
Borrower, as soon as practicable and in any event within 30 days after such
formation or acquisition, will provide the Applicable Collateral Agent with
notice of such formation or acquisition setting forth in reasonable detail a
description of all of the assets of such new Subsidiary and will cause such new
Subsidiary (other than a Foreign Subsidiary, except to the extent provided in subsection
(d) below) to:

 

(i)            within 30
days after such formation or acquisition, execute an Accession Agreement
pursuant to which such new Subsidiary shall agree to become a “Guarantor” under
the Subsidiary Guaranty, an “Obligor” under the Security Agreement and an
“Obligor” under the Pledge Agreement and/or an obligor under such other
Collateral Documents as may be applicable to such new Subsidiary; and

 

(ii)           deliver
such proof of organizational authority, incumbency of officers, opinions of
counsel and other documents as is consistent with those delivered by each Loan
Party pursuant to Section 4.01 on the Closing Date or as the
Administrative Agent or the Applicable Collateral Agent shall have reasonably
requested.

 

(b)           Additional Security.  With respect to any owned Real Property
having a fair market value in excess of $1,000,000 acquired by any Loan Party
subsequent to the Closing Date, such Person will cause to be delivered to the
Applicable Collateral Agent with respect to such Real Property

 

103

 

documents, instruments and other items of the types customarily
required by lenders in transactions similar to the transactions contemplated
herein, all in form, content and scope reasonably satisfactory to the
Applicable Collateral Agent.  In
furtherance of the foregoing terms of this Section 6.12, the Borrower
agrees to promptly provide the Administrative Agent with written notice of the
acquisition by Holdings or any of its Subsidiaries of any owned Real Property
having a market value greater than $1,000,000 or the entering into a lease by
Holdings or any of its Subsidiaries of any Real Property for annual rent of
$500,000 or more, setting forth in each case in reasonable detail the location
and a description of the asset(s) so acquired or leased.  Without limiting the generality of the
foregoing, Holdings and the Borrower will cause, and will cause each of their
respective Subsidiaries to cause, 100% of the Equity Interests of each of their
respective direct and indirect Domestic Subsidiaries (or (x) 65% of such Equity
Interests, if such Subsidiary is a direct Foreign Subsidiary or, following a
Foreign IP Transfer Transaction, each Foreign IP Holdco, except as provided in subsection
(d) below, or (y) to the extent not prohibited by the terms of any
Organization Document or other agreement governing a Permitted Joint Venture,
such percentage as is equal to their respective ratable ownership of all Equity
Interests in Permitted Joint Ventures and non-Wholly-Owned Subsidiaries) to be
subject at all times to a first priority, perfected Lien in favor of the Senior
Collateral Agent and a first priority (subject only to the prior Lien in favor
of the Senior Collateral Agent until the Senior Obligations are paid in full),
perfected Lien in favor of the Second Lien Collateral Agent pursuant to the
terms and conditions of the Collateral Documents, subject only to Permitted
Liens described in Section 7.02(iii) or (v).

 

If, subsequent to the Closing Date, a Loan Party shall
acquire any patents, trademark registrations, service mark registrations,
registered tradenames, copyright registrations, any applications relating to
the foregoing, securities, instruments, chattel paper or other personal
property required to be delivered to the Applicable Collateral Agent as
Collateral hereunder or under any of the Collateral Documents, the Borrower
shall promptly (and in any event within ten Business Days after any Responsible
Officer of any Loan Party acquires knowledge of the same) notify the Applicable
Collateral Agent of the same.  Each of
the Loan Parties shall adhere to the covenants regarding the location of
personal property as set forth in the Collateral Documents.

 

All such security interests and mortgages shall be
granted pursuant to documentation consistent with the Collateral Documents
executed at Closing and otherwise reasonably satisfactory in form and substance
to the Applicable Collateral Agent (collectively, the “Additional Collateral
Documents”) and shall constitute valid and enforceable perfected security
interests and mortgages superior to and prior to the rights of all third
Persons and subject to no other Liens except for Permitted Liens.  The Additional Collateral Documents or
instruments related thereto shall have been 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 Agents required to be
granted pursuant to the Additional Collateral Documents, and all taxes, fees
and other charges payable in connection therewith shall have been paid in
full.  The Borrower shall cause to be
delivered to the Applicable Collateral Agent such opinions of counsel, title
insurance and other related documents as may be reasonably requested by the
Applicable Collateral Agent to assure itself that this Section 6.12(b)
has been complied with.

 

(c)           Real Property Appraisals.  If the Applicable Collateral Agent or the
Required Lenders determine that they are required by Law or regulation to have
appraisals prepared in respect of the owned Real Property of any Group Company
constituting Collateral, the Borrower shall provide to the Applicable
Collateral Agent appraisals which satisfy the applicable requirements set forth
in 12 C.F.R., Part 34 - Subpart C or any successor or similar statute, rule,
regulation, guideline or order, and which shall be in scope, form and
substance, and from appraisers, reasonably satisfactory to the Applicable
Collateral Agent and shall be accompanied by a certification of the appraisal
firm providing such appraisals that the appraisals comply with such
requirements.

 

104

 

(d)           Foreign Subsidiaries Security.  If, following a change that is reasonably
determined to be material by the Administrative Agent in the relevant Sections
of the Code or the regulations, rules, rulings, notices or other official
pronouncements issued or promulgated thereunder, the Borrower or its counsel or
advisors reasonably acceptable to the Administrative Agent does not within 45
days after a request from the Administrative Agent deliver evidence, in form
and substance mutually satisfactory to the Administrative Agent and the
Borrower, with respect to any Foreign Subsidiary of Holdings which has not
already had all of the Equity Interests issued by it pledged pursuant to the
Pledge Agreement that (i) a pledge (A) of 65.0% or more of the total combined
voting power of all classes of capital stock of such Foreign Subsidiary entitled
to vote, and (B) of any promissory note issued by such Foreign Subsidiary to
the Borrower or any of its Domestic Subsidiaries, (ii) the entering into by
such Foreign Subsidiary of a guaranty in form and substance substantially
identical to the Subsidiary Guaranty, (iii) the entering into by such Foreign
Subsidiary of a security agreement in form and substance substantially
identical to the Security Agreement, and (iv) the entering into by such Foreign
Subsidiary of a pledge agreement substantially identical to the Pledge
Agreement, in any such case would cause all or any portion of the undistributed
earnings of such Foreign Subsidiary as determined for United States federal
income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s
United States parent (or other domestic Affiliate) for United States federal
income tax purposes under Code Section 956 or any similar provision of federal,
state or local tax Law, then, (A) in the case of a failure to deliver the
evidence described in clause (i) above, that portion of such Foreign
Subsidiary’s outstanding capital stock or any promissory notes so issued by
such Foreign Subsidiary, in each case not theretofore pledged pursuant to the
Pledge Agreement, shall be pledged to the Collateral Agents for the benefit of
the Finance Parties pursuant to the Pledge Agreement (or another pledge
agreement in substantially identical form, if needed); (B) in the case of a
failure to deliver the evidence described in clause (ii) above, such
Foreign Subsidiary shall execute and deliver the Subsidiary Guaranty (or
another guaranty in substantially identical form, if needed), guaranteeing the
Credit Obligations; (C) in the case of a failure to deliver the evidence
described in clause (iii) above, such Foreign Subsidiary shall execute
and deliver the Security Agreement (or another security agreement in
substantially identical form, if needed), granting to the Collateral Agents,
for the benefit of the Finance Parties, a security interest in all of such Foreign
Subsidiary’s assets and securing the Finance Obligations; and (D) in the case
of a failure to deliver the evidence described in clause (iv) above,
such Foreign Subsidiary shall execute and deliver the Pledge Agreement (or
another pledge agreement in substantially identical form, if needed), pledging
to the Collateral Agents, for the benefit of the Finance Parties, all of the
capital stock and promissory notes owned by such Foreign Subsidiary, in each
case to the extent that entering into the Guaranty, Security Agreement or
Pledge Agreement is permitted by the Laws of the respective foreign
jurisdiction and with all documents delivered pursuant to this Section
6.12(d) to be in form, scope and substance reasonably satisfactory to the
Applicable Collateral Agent.

 

(e)           Completion of Required Actions.  Each of Holdings and the Borrower agrees that
each action required by the foregoing paragraphs of this Section 6.12
shall be completed as soon as possible, but in no event later than 60 days
after such action is either requested to be taken by the Applicable Collateral
Agent or required to be taken by Holdings or any of its Subsidiaries pursuant
to the terms of this Section 6.12.

 

(f)            Landlord Consent for Lincolnville, California
Property.  The Borrower
will use commercially reasonable efforts to obtain a fully executed letter,
certificate or other written instrument from the lessor of its facility in
Lincolnville, California, substantially in the form of Exhibit D to the
Security Agreements and otherwise in form and substance reasonably satisfactory
to the Joint Lead Arrangers.

 

Section
6.13  Interest Rate Protection Agreements.  Within nine months
after the Closing Date, the Borrower will enter into and thereafter maintain in
full force and effect interest rate

 

105

 

swaps, rate caps, collars or other similar agreements or arrangements
designed to hedge the position of the Borrower with respect to interest rates
at rates and on terms reasonably satisfactory to the Administrative Agent,
taking into account the market conditions, to provide protection against
interest rates on Indebtedness bearing floating interest rates for a period
expiring no earlier than 24 months after the date of execution and delivery of
such agreements with respect to a notional amount of Indebtedness of Holdings
and its Subsidiaries such that, after giving effect thereto, at least 30% of
the Indebtedness of Holdings and its Subsidiaries bears fixed interest rates.  The Borrower will promptly deliver evidence
of the execution and delivery of such agreements to the Administrative Agent.

 

Section
6.14  Contributions.  Within three Business Days following its
receipt thereof, Holdings will contribute as a common equity contribution to
the capital of the Borrower any cash proceeds received by Holdings after the
Closing Date from any Asset Disposition, Casualty, Condemnation, Debt Issuance
or Equity Issuance or any cash capital contributions received by Holdings after
the Closing Date.

 

ARTICLE
VII

NEGATIVE COVENANTS

 

Each of Holdings and the Borrower agrees that so long
as any Lender has any Commitment hereunder, any Credit Obligations or other
amount payable hereunder or under any Note or other Loan Document or any L/C
Obligation (in each case other than contingent indemnification obligations)
remains unpaid or any Letter of Credit remains unexpired:

 

Section
7.01  Limitation on Indebtedness.  None of the Group
Companies will incur, create, assume or permit to exist any Indebtedness or
Swap Obligations except:

 

(i)            Indebtedness
of the Borrower and its Subsidiaries outstanding on the Closing Date and
disclosed on Schedule 7.01 (collectively, the “Existing Debt”)
and any modifications, refinancings, refundings, renewals or extensions
thereof; provided, that (A) the amount of such Indebtedness is not
increased at the time of such modification, refinancing, refunding, renewal or
extension except by an amount equal to a reasonable premium or other reasonable
amount paid, and fees and expenses reasonably incurred, in connection with such
refinancing and by an amount equal to any existing commitments unutilized
thereunder or as otherwise permitted pursuant to this Section 7.01, and
(B) the terms and conditions (including, if applicable, as to collateral and
subordination) of any such modified, extending, refunding or refinancing
Indebtedness are not materially less favorable to the Group Companies or the
Lenders than the terms and conditions of the Indebtedness being modified,
extended, refunded or refinanced;

 

(ii)           Indebtedness
of the Loan Parties under this Agreement and the other Loan Documents;

 

(iii)          (A)
Purchase Money Indebtedness and Attributable Indebtedness in respect of Capital
Leases and Synthetic Lease Obligations and of the Borrower and its Subsidiaries
incurred after the Closing Date to finance Capital Expenditures permitted by Section 7.14;
provided that (1) the aggregate amount of all such Debt does not exceed
the Applicable Basket Amount at any time outstanding, (2) the Debt when
incurred shall not be less than 80% or more than 100% of the lesser of the cost
or fair market value as of the time of acquisition of the asset financed and
the Proceeds thereof, (3) such Debt is issued and any Liens securing such Debt
are created concurrently with, or within 90 days after, the acquisition of the
asset financed and (4) no Lien securing such Debt shall extend to or cover any
property or asset

 

106

 

of any Group
Company other than the asset so financed, and (B) Attributable Indebtedness in
respect of Sale/Leaseback Transactions permitted by Section 7.13;

 

(iv)          Indebtedness
of the Borrower or its Subsidiaries secured by Liens permitted by clauses
(xvii), (xviii) and (xix) of Section 7.02 and any
other Indebtedness of a Person whose Equity Interests or assets are acquired in
a Permitted Business Acquisition which is acquired or assumed by the Borrower
or a Subsidiary of the Borrower in such Permitted Business Acquisition and any
Permitted Refinancing thereof; provided that (A) such Indebtedness was
not incurred in connection with, or in anticipation of, the events described in
such clauses or such Permitted Business Acquisition, and (B) such Indebtedness
(other than pre-existing Attributable Indebtedness and Purchase Money
Indebtedness) does not constitute indebtedness for borrowed money;

 

(v)           unsecured
Subordinated Indebtedness of the Borrower or any of its Subsidiaries that is
issued to a seller of assets or Person acquired in a Permitted Business
Acquisition and any Permitted Refinancing thereof if, immediately prior to and
after giving effect thereto, (A) no Event of Default shall exist or result
therefrom and (B) Holdings and its Subsidiaries will be in compliance on a
Pro-Forma Basis with the financial covenants set forth in Section 7.17;

 

(vi)          (A)
contingent liabilities in respect of any indemnification, adjustment of
purchase price, earn-out, non-compete, consulting, deferred compensation and
similar obligations of the Borrower and its Subsidiaries incurred in connection
with the Acquisition, Permitted Business Acquisitions, Permitted Joint Ventures
and Asset Dispositions and (B) Indebtedness incurred by the Borrower or its
Subsidiaries in a Permitted Business Acquisition or Asset Disposition under
agreements providing for earn-outs or the adjustment of the purchase price or
similar adjustments;

 

(vii)         Swap
Obligations of the Borrower or any Subsidiary under Swap Agreements to the
extent entered into after the Closing Date in compliance with Section 6.13
or to manage interest rate, foreign currency exchange rate and commodity
pricing risks and not for speculative purposes;

 

(viii)        Indebtedness
owed to any Person providing property, casualty or liability insurance to the
Borrower or any Subsidiary of the Borrower, so long as such Indebtedness shall
not be in excess of the amount of the unpaid cost of, and shall be incurred
only to defer the cost of, such insurance for the year in which such
Indebtedness is incurred and such Indebtedness shall be outstanding only during
such year;

 

(ix)           Indebtedness
consisting of Guaranty Obligations (A) by the Borrower in respect of
Indebtedness, leases or other ordinary course obligations permitted to be
incurred by, or obligations in respect of Permitted Business Acquisitions or
Permitted Joint Ventures of, Wholly-Owned Domestic Subsidiaries of the
Borrower, (B) by Domestic Subsidiaries of the Borrower of Indebtedness, leases
or other ordinary course obligations permitted to be incurred by, or
obligations in respect of Permitted Business Acquisitions or Permitted Joint
Ventures of, the Borrower or Wholly-Owned Domestic Subsidiaries of the
Borrower, (C) by Foreign Subsidiaries of the Borrower of Indebtedness, leases
or other ordinary course obligations permitted to be incurred by, or obligations
in respect of Permitted Business Acquisitions or Permitted Joint Ventures of,
Wholly-Owned Foreign Subsidiaries of the Borrower and (D) by the Borrower or
any Subsidiary of the Borrower of Indebtedness, leases or other ordinary course
obligations permitted to be incurred by, Foreign Subsidiaries; provided that
the aggregate amount of

 

107

 

Guaranty
Obligations referred to in this clause (D), together with all Investments by
the Borrower and its Wholly-Owned Domestic Subsidiaries permitted under Section
7.06(a)(xi)(A), will not exceed at any one time outstanding the Applicable
Basket Amount;

 

(x)            inter-company
Indebtedness owing to the Borrower or a Subsidiary of the Borrower to the
extent permitted by Section 7.06(a)(x) or (xi);

 

(xi)           Indebtedness
of Foreign Subsidiaries incurred on or after the Closing Date to finance
working capital requirements and Permitted Refinancings thereof (determined
without regard to clause (ii) of the definition thereof) in an aggregate
principal amount which, when taken together with the then outstanding principal
amount of all Indebtedness of Foreign Subsidiaries referred to in clause (i)
above, does not exceed the sum of (A) the aggregate principal amount of
all Indebtedness of Foreign Subsidiaries outstanding on the Closing Date and
disclosed on Schedule 7.01 plus (B) the Applicable Basket Amount
(or its equivalent in one or more applicable foreign currencies);

 

(xii)          (A)
Indebtedness of the Borrower and its Subsidiaries arising from the honoring by
a bank or other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business; provided
that (1) such Indebtedness (other than credit or purchase cards) is extinguished
within three Business Days of its incurrence and (2) such Indebtedness in
respect of credit or purchase cards in extinguished within 60 days from its
incurrence, and (B) contingent indemnification obligations of the Borrower and
its Subsidiaries to financial institutions, in each case to the extent in the
ordinary course of business and on terms and conditions which are within the
general parameters customary in the banking industry, entered into to obtain
cash management services or deposit account overdraft protection services (in
amount similar to those offered for comparable services in the financial
industry) or other services in connection with the management or opening of
deposit accounts or incurred as a result of endorsement of negotiable instruments
for deposit or collection purposes;

 

(xiii)         Indebtedness
of the Borrower and its Subsidiaries representing deferred compensation to
employees of the Borrower and its Subsidiaries;

 

(xiv)        Indebtedness
of Holdings representing the obligation of Holdings to make payments with
respect to the cancellation or repurchase of certain Equity Interests of
officers, employees or directors (or their estates) of Holdings and its
Subsidiaries, to the extent permitted by Section 7.07(iv);

 

(xv)         Indebtedness
of one or more Foreign IP Holdcos represented by interest bearing notes pledged
to the Collateral Agents pursuant to the Pledge Agreements payable to any Loan
Party to finance the acquisition by such Foreign IP Holdco of the capital stock
of any Foreign Subsidiary in connection with a Foreign IP Transfer Transaction,
not to exceed individually or in the aggregate for all Foreign IP Holdcos the
Applicable Basket Amount;

 

(xvi)        Indebtedness
of one or more Foreign IP Holdcos represented by interest bearing notes pledged
to the Collateral Agents pursuant to the Pledge Agreements payable to any Loan
Party to finance the license of Intellectual Property described under clause(iii)
of the definition of “Foreign IP Transfer Transaction”, not to exceed
individually or in the aggregate for all Foreign IP Holdcos the Applicable
Basket Amount;

 

(xvii)       unsecured
Indebtedness of the Borrower and its Subsidiaries not otherwise permitted by
this Section 7.01 incurred after the Closing Date in an aggregate
principal

 

108

 

amount not to
exceed the Applicable Basket Amount at any time outstanding; provided
that (A) the documentation with respect to such Indebtedness shall not contain
covenants or default provisions relating to Holdings or any Subsidiary of
Holdings that are more restrictive than the covenants and default provisions
contained in the Loan Documents, (B) no Default or Event of Default shall have
occurred and be continuing immediately before and immediately after giving effect
to such incurrence and (C) the Borrower shall have delivered to the
Administrative Agent a certificate demonstrating that, upon giving effect on a
Pro-Forma Basis to the incurrence of such Indebtedness and to the concurrent
retirement of any other Indebtedness of any Group Company, the Loan Parties
shall be in compliance with the financial covenants set forth in Section
7.17; and

 

(xviii)      unsecured
senior notes, senior subordinated notes, senior floating rate notes, senior
discount notes or other securities of the Borrower having terms, yield,
guarantees covenants, default and subordination provisions and other terms as
are customary for “high yield” securities issued for cash in a registered
public offering or in a private placement for resale pursuant to Rule 144A
under the Securities Act or otherwise, the proceeds of which are applied as
required by Section 2.09(b)(iv); provided that (A) any such
Indebtedness must constitute unsecured Subordinated Indebtedness, (B) no
Default or Event of Default shall have occurred and be continuing immediately
before and immediately after giving effect to the incurrence thereof and (C)
the Borrower shall have delivered to the Administrative Agent a certificate
demonstrating that, upon giving effect on a Pro-Forma Basis to the incurrence
of such Indebtedness and to the concurrent prepayment of the Loans, the Loan
Parties shall be in compliance with the financial covenants set forth in Section
7.17.  The issuance of any security
satisfying the requirements of this clause (xviii) is herein referred to
as a “Public Debt Issuance”.

 

Section
7.02  Restriction on Liens.  None of the Group Companies will create,
incur, assume or permit to exist any Lien on any property or assets (including
Equity Interests or other securities of any Person, including any Subsidiary of
Holdings) now owned or hereafter acquired by it or on any income or rights in
respect of any thereof, or sign or file or authorize the filing under the
Uniform Commercial Code of any jurisdiction of a financing statement that names
any Group Company as debtor, or sign any security agreement authorizing any
secured party thereunder to file such a financing statement, except Liens
described in any of the following clauses (collectively, “Permitted Liens”):

 

(i)            Liens existing
on the Closing Date and listed on Schedule 7.02 hereto and any
modifications, replacements, renewals or extensions thereof; provided
that (A) the Lien does not extend to any additional property other than (x)
after-acquired property that is affixed or incorporated into the property
covered by such Lien or financed by Debt permitted under Section 7.01
and (y) proceeds and products thereof and (B) the renewal, extension or
modification of the obligations secured or benefited by such Liens is permitted
by Section 7.01;

 

(ii)           Liens
created by the Collateral Documents;

 

(iii)          Liens
for taxes, assessments or governmental charges or levies not yet due or that
are being contested in good faith and by appropriate proceedings diligently
pursued for which adequate reserves (in the good faith judgment of the
management of the Borrower) have been established in accordance with GAAP (and
as to which the property or assets subject to any such Lien is not yet subject
to foreclosure, sale or loss on account thereof);

 

(iv)          Liens
imposed by Law securing the charges, claims, demands or levies of landlords,
carriers, suppliers, warehousemen, materialmen, workmen, mechanics, carriers
and other like Liens imposed by Law which were incurred in the ordinary course
of business and which (A) do not, individually or in the aggregate, materially
detract from the value of the

 

109

 

property or assets
which are the subject of such Lien or materially impair the use thereof in the
operation of the business of the Borrower or any of its Subsidiaries or (B)
which are being contested in good faith by appropriate proceedings diligently
pursued for which adequate reserves (in the good faith judgment of the
management of the Borrower) have been established in accordance with GAAP,
which proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to such Lien;

 

(v)           Liens
(other than any Liens imposed by ERISA or pursuant to any Environmental Law)
not securing Indebtedness or Swap Obligations incurred or deposits made in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security and other similar
obligations incurred in the ordinary course of business;

 

(vi)          Liens
securing obligations in respect of surety bonds (other than appeal bonds),
bids, leases, government contracts, performance and return-of-money bonds and
other similar obligations incurred in the ordinary course of business; provided
that (A) in the case of Liens on cash and Cash Equivalents, the amount of all
cash and Cash Equivalents subject to such Liens may at no time exceed the
Applicable Basket Amount in the aggregate;

 

(vii)         Liens
upon specific items or inventory or other goods and proceeds of the Borrower or
any of its Subsidiaries securing such Person’s obligations in respect of
bankers’ acceptances or documentary letters of credit issued or created for the
account of such Person to facilitate the shipment or storage of such inventory
or other goods;

 

(viii)        pledges
or deposits of cash and Cash Equivalents securing deductibles, self-insurance,
co-payment, co-insurance, retentions and similar obligations to providers of
insurance in the ordinary cause of business;

 

(ix)           Liens on
(A) incurred premiums, dividends and rebates which may become payable under
insurance policies and loss payments which reduce the incurred premiums on such
insurance policies and (B) rights which may arise under State insurance
guarantee funds relating to any such insurance policy, in each case securing
Indebtedness permitted to be incurred pursuant to Section 7.01(viii);

 

(x)            Liens
arising solely by virtue of any statutory or common Law provision relating to
banker’s liens, rights of set-off or similar rights, in each case incurred in
the ordinary course of business;

 

(xi)           licenses,
leases or subleases granted to third Persons or to the Borrower or its
Subsidiaries by the Borrower and its Subsidiaries in the ordinary course of
business not interfering in any material respect with the business of any Group
Company and not otherwise prohibited by Section 7.05(xiv);

 

(xii)          zoning
restrictions, building codes, land use and other similar Laws and municipal
ordinances, easements, rights of way, licenses, reservations, covenants,
conditions, waivers, restrictions on the use of property or other minor
encumbrances or irregularities of title not securing Indebtedness or Swap
Obligations which do not, individually or in the aggregate, materially impair
the use of any property in the operation or business of Holdings or any of its
Subsidiaries or the value of such property for the purpose of such business;

 

110

 

(xiii)         Liens
arising from precautionary Uniform Commercial Code financing statements
regarding, and any interest or title of a licensor, lessor or sublessor under,
Operating Leases permitted by this Agreement;

 

(xiv)        Liens
in favor of lessor, sublessor, lessees or sublessees securing Operating Leases;

 

(xv)         Liens arising
from judgments, decrees or attachments (or securing of appeal bonds with
respect thereto) in circumstances not constituting an Event of Default under Section
8.01; provided that no cash or other property (other than proceeds
of insurance payable by reason of such judgments, decrees or attachments) the
fair value of which exceeds the Applicable Basket Amount is deposited or
delivered to secure any such judgment, decree or award, or any appeal bond in
respect thereof;

 

(xvi)        Liens
securing Debt permitted to be incurred under Section 7.01(i), (iii), and
(iv);

 

(xvii)       any
Lien existing on any asset of any Person at the time such Person becomes a
Subsidiary of the Borrower and not created in contemplation of such event;

 

(xviii)      any
Lien on any asset (other than on the Equity Interests of one or more
Subsidiaries) of any Person existing at the time such Person is merged or
consolidated with or into the Borrower or a Subsidiary of the Borrower and not
created in contemplation of such event;

 

(xix)         any
Lien existing on any asset (other than on the Equity Interests of one or more
Subsidiaries) prior to the acquisition thereof by the Borrower or a Subsidiary
of the Borrower and not created in contemplation of such acquisition;

 

(xx)          Liens
solely on any cash earnest money deposits made by the Borrower or any of its
Subsidiaries in connection with any letter of intent or purchase agreement with
respect to a Permitted Business Acquisition or a Permitted Joint Venture;

 

(xxi)         Liens
on cash and Cash Equivalents securing Swap Obligations owing to one or more
Persons who are not Swap Creditors; provided that the aggregate amount
of all cash and Cash Equivalents subject to such Liens may at no time exceed
the Applicable Basket Amount;

 

(xxii)        Liens
on any assets or Equity Interests of a Foreign Subsidiary of the Borrower
securing Indebtedness of such Foreign Subsidiary incurred pursuant to Section
7.01(xi);

 

(xxiii)       Liens
securing Sale/Leaseback Transactions permitted under Section 7.13; and

 

(xxiv)       other
Liens incurred by the Borrower and its Subsidiaries not securing Indebtedness
if the aggregate fair market value of the property subject to such Liens, and
the aggregate amount of the obligations secured thereby, do not exceed the
Applicable Basket Amount.

 

Section
7.03  Nature of Business.  None of the Group Companies will alter in any
material respect the character or conduct of the business conducted by such
Person as of the Closing Date and activities directly related thereto and
similar, complimentary or related businesses.

 

111

 

Section
7.04  Consolidation, Merger and Dissolution.  Except in connection
with an Asset Disposition permitted by the terms of Section 7.05, none
of the Group Companies will enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself or its affairs (or
suffer any liquidations or dissolutions); provided that:

 

(i)            any
Domestic Subsidiary of the Borrower may merge with and into, or be voluntarily
dissolved or liquidated into, the Borrower, so long as (A) the Borrower is the
surviving corporation of such merger, dissolution or liquidation, (B) the
security interests granted to the Collateral Agents for the benefit of the
Finance Parties pursuant to the Collateral Documents in the assets of the
Borrower and such Domestic Subsidiary so merged, dissolved or liquidated shall
remain in full force and effect and perfected (to at least the same extent as
in effect immediately prior to such merger, dissolution or liquidation) and (C)
no Person other than the Borrower or a Subsidiary Guarantor receives any
consideration in respect or as a result of such transaction;

 

(ii)           any
Domestic Subsidiary of the Borrower may merge with and into, or be voluntarily
dissolved or liquidated into, any other Domestic Subsidiary of the Borrower, so
long as (A) in the case of any such merger, dissolution or liquidation
involving one or more Subsidiary Guarantors, (x) a Subsidiary Guarantor is
the surviving corporation of such merger, dissolution or liquidation,
(y) no Person other than the Borrower or a Subsidiary Guarantor receives
any consideration in respect of or as a result of such transaction and
(B) the security interests granted to the Collateral Agents for the
benefit of the Finance Parties pursuant to the Collateral Documents in the
assets of each Domestic Subsidiary so merged, dissolved or liquidated and in
the Equity Interests of the surviving entity of such merger, dissolution or
liquidation shall remain in full force and effect and perfected (to at least
the same extent as in effect immediately prior to such merger, dissolution or
liquidation);

 

(iii)          any
Foreign Subsidiary of the Borrower may be merged with and into, or be
voluntarily dissolved or liquidated into, the Borrower or any Wholly-Owned
Subsidiary of the Borrower, so long as (A) in the case of any such merger,
dissolution or liquidation involving one or more Subsidiary Guarantor,
(x) the Borrower or such Subsidiary Guarantor, as the case may be, is the
surviving corporation of any such merger, dissolution or liquidation and
(y) no Person other than the Borrower or a Subsidiary Guarantor receives
any consideration in respect of or as a result of such transaction and
(B) the security interests granted to the Collateral Agents for the
benefit of the Finance Parties pursuant to the Collateral Documents in the
assets of such Foreign Subsidiary, if any, and the Borrower or such other
Subsidiary, as the case may be, and in the Equity Interests of the surviving
entity of such merger, dissolution or liquidation shall remain in full force
and effect and perfected (to at least the same extent as in effect immediately
prior to such merger, dissolution or liquidation);

 

(iv)          the
Borrower or any Subsidiary of the Borrower may merge with any Person (other
than Parent Holdings or Holdings) in connection with a Permitted Business
Acquisition if (A) in the case of any such merger involving the Borrower,
the Borrower shall be the continuing or surviving corporation in such merger,
(B) in the case of any such merger involving a Subsidiary Guarantor, such
Subsidiary Guarantor shall be the continuing or surviving corporation in such
merger or the continuing or surviving corporation in such merger shall,
simultaneously with the consummation of such merger, become a Subsidiary
Guarantor having all the responsibilities and obligations of the Subsidiary
Guarantor so merged, (C) the Loan Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Administrative
Agent may reasonably request so as to cause the Loan Parties to be in
compliance with the terms of Section 6.12 after giving effect to
such transactions and (D) the

 

112

 

Borrower shall
have delivered to the Administrative Agent a Pro-Forma Compliance Certificate
demonstrating that, upon giving effect on a Pro-Forma Basis to such
transaction, the Loan Parties will be in compliance with all of the financial
covenants set forth in Section 7.17 as of the last day of the most
recent period of four consecutive fiscal quarters of Holdings which precedes or
ends on the date of such transaction and with respect to which the
Administrative Agent has received the consolidated financial information
required under Section 6.01(a) or (b) and the Compliance
Certificate required by Section 6.02(b);

 

(v)           any
Subsidiary of the Borrower may merge with any Person (other than Parent
Holdings or Holdings) in connection with a Permitted Joint Venture if (A) 
in the case of any such merger involving a Subsidiary Guarantor, such
Subsidiary Guarantor shall be the continuing or surviving corporation in such
merger or the continuing or surviving corporation in such merger shall,
simultaneously with the consummation of such merger, become a Subsidiary
Guarantor having all the responsibilities and obligations of the Subsidiary
Guarantor so merged and (B) the Loan Parties shall cause to be executed
and delivered such documents, instruments and certificates as the
Administrative Agent may reasonably request so as to cause the Loan Parties to
be in compliance with the terms of Section 6.12 after giving effect
to such transactions; and

 

(vi)          either of
Parent Holdings or Holdings may merge with and into, or be voluntarily
dissolved or liquidated into the other so long as (A) the Collateral Agents
shall have a Requisite Priority Lien on 100% of the issued and outstanding
shares of capital stock of the Borrower and the security interests granted to
the Collateral Agents for the benefit of the Finance Parties pursuant to the
Collateral Documents in the assets of Parent Holdings and Holdings shall
otherwise remain in full force and effect and perfected (to at least the same
extent as in effect immediately prior to such merger, dissolution or
liquidation).

 

In the case of any merger or consolidation permitted
by this Section 7.04 of any Subsidiary of Holdings which is not a Loan
Party into a Loan Party, the Loan Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Administrative
Agent may reasonably request so as to cause the Loan Parties to be in
compliance with the terms of Section 6.12 after giving effect to such
transaction.  Notwithstanding anything to
the contrary contained above in this Section 7.04, no action shall be
permitted which results in a Change of Control.

 

Section
7.05  Asset Dispositions.  None of the Group Companies will make any
Asset Disposition; provided that:

 

(i)            any Group
Company may sell inventory in the ordinary course of business;

 

(ii)           the
Borrower may make any Asset Disposition to the Borrower or any of the
Subsidiary Guarantors if (A) the Loan Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Administrative
Agent or the Applicable Collateral Agent may request so as to cause the Loan
Parties to be in compliance with the terms of Section 6.12 after giving
effect to such Asset Disposition and (B) after giving effect to such Asset
Disposition, no Default or Event of Default exists;

 

(iii)          the
Borrower and its Subsidiaries may liquidate or sell Cash Equivalents and
Foreign Cash Equivalents;

 

113

 

(iv)          the
Borrower or any of its Subsidiaries may dispose of machinery or equipment which
will be replaced or upgraded with machinery or equipment put to a similar use
and owned or otherwise used or useful in the ordinary course of business of and
owned by such Person; provided that (A) such replacement or upgraded
machinery and equipment is acquired within 180 days after such disposition, (B)
the fair market value of all property disposed of pursuant to this clause
(iv) does not exceed the Applicable Basket Amount in the aggregate in any
fiscal year of the Borrower and (C) upon their acquisition, such replacement
assets become subject to the Lien of the Collateral Agent under the Collateral
Documents;

 

(v)           the
Borrower or any of its Subsidiaries may dispose of obsolete, worn-out or
surplus tangible assets in the ordinary course of business and in a commercially
reasonable manner;

 

(vi)          any
Subsidiary of the Borrower may sell, lease or otherwise transfer all or
substantially all or any part of its assets (including any such transaction
effected by way of merger or consolidation) to the Borrower or any Wholly-Owned
Domestic Subsidiary of the Borrower, so long as (A) the security interests
granted to the Collateral Agents for the benefit of the Finance Parties
pursuant to the Collateral Documents in such assets shall remain in full force
and effect and perfected (to at least the same extent as in effect immediately
prior to such sale, lease or other transfer) and (B) after giving effect
to such Asset Disposition, no Default or Event of Default exists;

 

(vii)         any
non-Wholly-Owned Domestic Subsidiary or Foreign Subsidiary of the Borrower may
sell, lease or otherwise transfer all or any part of its assets (including any
such transaction effected by way of merger or consolidation) to any other
non-Wholly-Owned Domestic Subsidiary or Foreign Subsidiary of the Borrower, so
long as the security interests granted to the Collateral Agents for the benefit
of the Finance Parties pursuant to the Collateral Documents in such assets
shall remain in full force and effect and perfected (to at least the same
extent as in effect immediately prior to such sale, lease or other transfer);

 

(viii)        Holdings
or any Subsidiary of the Borrower may sell or dispose of Equity Interests in
Holdings or such Subsidiary to qualify directors where required by applicable
Law or to satisfy other requirements of applicable Law with respect to the
ownership of Equity Interests in Foreign Subsidiaries;

 

(ix)           any Group
Company may transfer assets as a part of the consideration for Investments in
Permitted Joint Ventures;

 

(x)            the
Borrower and its Subsidiaries may transfer trade fixtures to Foreign
Subsidiaries and to non-Wholly-Owned Domestic Subsidiaries having an aggregate
fair market value not exceeding $2,000,000 from and after the Closing Date;

 

(xi)           Asset
Dispositions effected by transactions permitted under Section 7.04 shall
be permitted;

 

(xii)          any
Group Company may lease, as lessor or sublessor, or license, as licensor or
sublicensor, real or personal property in the ordinary course of business if
not otherwise prohibited by clause (xiv) below;

 

114

 

(xiii)         any
Group Company may dispose of defaulted receivables and similar obligations in
the ordinary course of business and not as part of an accounts receivable
financing transaction;

 

(xiv)        any
Group Company may, in the ordinary course of business, license and sublicense
Intellectual Property (x) registered outside the United States or (y) having an
aggregate fair market value not exceeding $5,000,000;

 

(xv)         any Group
Company may make an Asset Disposition to a Foreign IP Holdco consisting of the
capital stock of any Foreign Subsidiary in connection with a Foreign IP
Transfer Transaction in exchange for capital stock of such Foreign IP Holdco or
Indebtedness permitted by Section 7.01(xv);

 

(xvi)        any
Group company may make an Asset Disposition constituting, and limited to, a
Foreign IP Transfer Transaction in exchange for Indebtedness permitted by Section
7.01(xvi);

 

(xvii)       any
Group Company may dispose of non-core assets acquired in Permitted Business
Acquisitions;

 

(xviii)      any
Group Company may enter into any Sale/Leaseback Transaction not prohibited by Section 7.01
or Section 7.13; and

 

(xix)         any Group Company may make any other Asset
Disposition;  provided that (A) at least 75% of the consideration
therefor is cash or Cash Equivalents; (B) such transaction does not involve the
sale or other disposition of a minority Equity Interest in any Group Company;
(C) the aggregate fair market value of all assets sold or otherwise disposed of
by the Group Companies in all such transactions in reliance on this clause
(xix) shall not exceed the Applicable Basket Amount in any fiscal year of
the Borrower; and (D) no Default or Event of Default shall have occurred and be
continuing immediately before or immediately after giving effect to such
transaction.

 

Upon consummation of an Asset Disposition permitted
under this Section 7.05, the Lien created thereon under the Collateral
Documents (but not the Lien on any proceeds thereof) shall be automatically
released, and the Administrative Agent shall (or shall cause the Applicable
Collateral Agent to) (to the extent applicable) deliver to the Borrower, upon
the Borrower’s request and at the Borrower’s expense, such documentation as is
reasonably necessary to evidence the release of the Collateral Agents’ security
interests, if any, in the assets being disposed of, including amendments or
terminations of Uniform Commercial Code Financing Statements, if any, the
return of stock certificates, if any, and the release of any Subsidiary being
disposed of in its entirety from all of its obligations, if any, under the Loan
Documents.

 

Section
7.06  Investments.

 

(a)           Investments.  None of the Group Companies will hold, make
or acquire, any Investment in any Person, except the following:

 

(i)            Investments
existing on the date hereof disclosed on Schedule 7.06 hereto or in
Persons which are Subsidiaries on the date hereof and Investments in
Wholly-Owned Domestic Subsidiaries formed after the date hereof if the Loan
Parties shall cause to be executed and delivered such documents, instruments
and certificates as the Administrative Agent may

 

115

 

reasonably request
so as to cause the Loan Parties to be in compliance with the terms of Section
6.12 after giving effect to such Investment;

 

(ii)           the
Borrower or any Domestic Subsidiary of the Borrower may invest in cash and Cash
Equivalents;

 

(iii)          Foreign
Subsidiaries of the Borrower may invest in Cash Equivalents or Foreign Cash
Equivalents;

 

(iv)          the Borrower
and any Subsidiary of the Borrower may acquire and hold receivables, accounts,
notes receivable, chattel paper, payment intangibles and prepaid accounts owing
to them, if created or acquired in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms;

 

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

 

(vi)          loans and
advances by the Borrower and its Subsidiaries to employees of Holdings and its
Subsidiaries for moving and travel and other similar expenses, in each case in
the ordinary course of business, in an aggregate principal amount not to exceed
the Applicable Basket Amount at any time outstanding (determined without regard
to any write-downs or write-offs of such loans and advances);

 

(vii)         deposits
by the Borrower or any Subsidiary of the Borrower made in the ordinary course
of business consistent with past practices to secure the performance of leases
shall be permitted;

 

(viii)        the
Borrower or any of its Subsidiaries may make loans and advances to Holdings for
the purposes and in the amounts necessary to pay the fees, expenses and taxes
described in Section 7.07;

 

(ix)           Holdings
may make equity contributions to the capital of the Borrower;

 

(x)            the
Borrower may make Investments in any of its Wholly-Owned Domestic Subsidiaries
and any Subsidiary of the Borrower may make Investments in the Borrower or any
Wholly-Owned Domestic Subsidiary of the Borrower; provided that (A) each
item of intercompany Indebtedness shall be evidenced by a promissory note in
the form of Exhibit H hereto, (B) each promissory note evidencing
intercompany loans and advances made by a Foreign Subsidiary or a
non-Wholly-Owned Domestic Subsidiary to the Borrower or a Wholly-Owned Domestic
Subsidiary of the Borrower shall contain the subordination provisions set forth
in Exhibit I hereto and (C) each promissory note evidencing intercompany
loans and advances (other than promissory notes held by Foreign Subsidiaries,
except to the extent provided in Section 6.12(d)) shall be pledged to
the Collateral Agents pursuant to the Pledge Agreements;

 

(xi)           the
Borrower and its Subsidiaries may make Investments in any Foreign Subsidiary or
any non-Wholly-Owned Domestic Subsidiary of the Borrower (A) in the case of
Investments by the Borrower or any Wholly-Owned Domestic Subsidiary of the
Borrower, in an aggregate amount together with all Guaranty Obligations
permitted under Section 7.01(ix)(D) (determined without regard to any
write-downs or write-offs of any such Investments constituting

 

116

 

Indebtedness) at
any one time outstanding not exceeding the Applicable Basket Amount and (B) to
the extent such Investments arise from the sale of inventory in the ordinary
course of business by the Borrower or such Subsidiary to such Foreign
Subsidiary or non-Wholly-Owned Domestic Subsidiary for resale by such Foreign
Subsidiary or non-Wholly-Owned Domestic Subsidiary (including any such
Investments resulting from the extension of the payment terms with respect to
such sales); provided that (A) each item of intercompany Indebtedness
shall be evidenced by a promissory note in the form of Exhibit H hereto
and (B) each promissory note evidencing intercompany loans and advances (other
than promissory notes (x) issued by Foreign Subsidiaries of the Borrower to the
Borrower or any of its Domestic Subsidiaries or (y) held by Foreign
Subsidiaries of the Borrower, in each case except to the extent provided in Section
6.12(d)) shall be pledged to the Collateral Agents pursuant to the Pledge
Agreements;

 

(xii)          the
Borrower and its Subsidiaries may make Investments in Permitted Joint Ventures
in an aggregate amount, determined based on the greater of the book value or
the fair market value thereof as certified in a certificate of a financial
officer of the Borrower delivered to the Administrative Agent, not in excess of
the Applicable Basket Amount in any fiscal year and the Applicable Basket
Amount in the aggregate during the period since the Closing Date;

 

(xiii)         Investments
arising out of the receipt by the Borrower or any of its Subsidiaries of
non-cash consideration for the sale of assets permitted under Section 7.05;

 

(xiv)        the
Borrower and its Subsidiaries may make expenditures in respect of Permitted
Business Acquisitions;

 

(xv)         the Borrower
and its Subsidiaries may make Investments arising out of a Foreign IP Transfer
Transaction representing Indebtedness of a Foreign IP Holdco permitted pursuant
to Section 7.01(xv) and (xvi) or in capital stock of a Foreign IP
Holdco upon contribution of capital stock of such Foreign Subsidiary;

 

(xvi)        the
Borrower and its Subsidiaries may make Investments in one or Foreign
Subsidiaries (A) to the extent necessary to eliminate a deficit in required
capital that either (x) is funded with the proceeds of a Qualifying Equity
Issuance or (y) does not exceed the Applicable Basket Amount or (B)
representing contributions to a Foreign IP Holdco of accounts receivable that
represent amounts payable to a Loan Party by a Foreign Subsidiary in an amount
not to exceed the Applicable Basket Amount; and

 

(xvii)       the
Borrower and its Subsidiaries may make other Investments not otherwise
permitted by this Section 7.06 in an aggregate amount (determined
without regard to any write-downs or write-offs of any such Investments
constituting Indebtedness but excluding any portion thereof funded with
proceeds of a Qualifying Equity Issuance not otherwise utilized for any purpose
specified in clause (iii) of the definition of “Qualifying Equity
Issuance”) at any time outstanding not exceeding the sum of (A) the
Applicable Basket Amount plus (B) an amount, not exceeding the Applicable
Basket Amount in the aggregate, equal to that portion of Excess Cash Flow for the
fiscal years ended after the Closing Date, if any, not required to be used to
prepay the Loans or Cash Collateralize L/C Obligations in accordance with Section
2.09, to make Restricted Payments under Section 7.07(iv) or to make
Consolidated Capital Expenditures under Section 7.14(c); provided,
however, that the aggregate amount of all Investments by the Borrower
and its Wholly-Owned Domestic Subsidiaries in Foreign Subsidiaries and
non-Wholly-Owned Subsidiaries of the Borrower together with all Guaranty
Obligations permitted under Section 7.01(ix)(D) shall not exceed the
Applicable Basket Amount (determined without regard

 

117

 

to any write-downs
or write-offs of any such Investments constituting Indebtedness but excluding
any portion thereof funded with proceeds of a Qualifying Equity Issuance) at
any time outstanding;

 

provided that no Group Company may
make or own any Investment in Margin Stock.

 

(b)           Limitation on the Creation of Subsidiaries.  No Group Company will establish, create or
acquire after the Closing Date any Subsidiary; provided that the
Borrower and its Subsidiaries shall be permitted to establish, create or
acquire Subsidiaries so long as (i) at least 30 days’ prior written notice
thereof is given to the Administrative Agent, (ii) the Investment resulting
from such establishment, creation or acquisition is permitted pursuant to Section
7.06(a) above, (iii) the capital stock or other equity interests of such
new Subsidiary (other than a Foreign Subsidiary, except to the extent otherwise
required pursuant to Section 6.12(d)) is pledged pursuant to, and to the
extent required by, the Pledge Agreement and the certificates representing such
interests, together with transfer powers duly executed in blank, are delivered
to the Applicable Collateral Agent, (iv) such new Subsidiary (other than a
Foreign Subsidiary, except to the extent otherwise required pursuant to Section
6.12(d)) executes a counterpart of the Accession Agreement, the Guaranty,
the Security Agreements and the Pledge Agreements to the extent required by Section
6.12(b), and (v) such new Subsidiary, to the extent requested by the
Administrative Agent, takes all other actions required pursuant to Section
6.12.

 

Section
7.07  Restricted Payments, etc.  None of the Group
Companies will declare or pay any Restricted Payments (other than Restricted
Payments payable solely in Equity Interests (exclusive of Debt Equivalents) of
such Person), except that:

 

(i)            the
Preferred Stock Redemption and the Equity Distribution may be effected on the
Closing Date;

 

(ii)           any
Wholly-Owned Subsidiary of the Borrower may make Restricted Payments to the
Borrower or to any Wholly-Owned Subsidiary of the Borrower;

 

(iii)          any
non-Wholly-Owned Subsidiary of the Borrower may make Restricted Payments to the
Borrower or to any Wholly-Owned Subsidiary of the Borrower or ratably to all
holders of its outstanding Equity Interests;

 

(iv)          so long as
no Default or Event of Default is then in existence or would otherwise arise
therefrom, the Borrower may make cash Restricted Payments to Holdings and
Holdings may in turn make cash Restricted Payments to Parent Holdings to enable
Parent Holdings to redeem or repurchase Equity Interests (or Equity
Equivalents) from (A) officers, employees and directors of any Group Company
(or their estates, spouses or former spouses) upon the death, permanent
disability, retirement or termination of employment of any such Person or
otherwise, or (B) other holders of Equity Interests or Equity Equivalents in Parent
Holdings; provided that in all such cases (A) no Default or Event of
Default is then in existence or would otherwise arise therefrom, (B) the
aggregate amount of all cash paid in respect of all such shares so redeemed or
repurchased does not exceed the Applicable Basket Amount in the aggregate from
and after the Closing Date, and provided  further that Parent
Holdings may purchase, redeem or otherwise acquire Equity Interests and Equity
Equivalents of Parent Holdings pursuant to this clause (iv) without
regard to the restrictions set forth in the first proviso above for
consideration consisting of (x) the proceeds of key man life insurance, (y) the
Net Cash Proceeds of Qualifying Equity Issuances not otherwise utilized for any
purpose specified in clause (iii) of the definition of “Qualifying
Equity Issuance” and (z) that portion of Excess Cash Flow for the fiscal years
ended after the Closing Date, if any, not required to be used to prepay

 

118

 

the Loans or Cash
Collateralize L/C Obligations in accordance with Section 2.09 or
utilized to make Investments under Section 7.06(a)(xvii) or Consolidated
Capital Expenditures under Section 7.14(c);

 

(v)           the
Borrower may make cash Restricted Payments to Holdings, and Holdings may in
turn make cash Restricted Payments to Parent Holdings, to enable Holdings or
Parent Holdings to pay, and in amounts not to exceed the amount necessary to
pay, (A) the then currently due fees and expenses of Holdings’ and Parent
Holdings’ counsel, accountants and other advisors and consultants, and other
operating and administrative expenses of Holdings and Parent Holdings
(including employee and compensation expenditures, directors’ and officers’
insurance premiums and other similar costs and expenses) incurred in the
ordinary course of business that are for the benefit of, or are attributable
to, or are related to, including the financing or refinancing of, Parent
Holding’s Investment in the Borrower and its Subsidiaries, up to an aggregate
amount of the Applicable Basket Amount for each fiscal year, (B) the then
currently due fees and expenses of Holdings’ and Parent Holdings’ independent
directors and (C) the then currently due taxes payable by Holdings and Parent
Holdings solely on account of the income of Holdings and Parent Holdings
related to their respective Investment in the Borrower and its Subsidiaries and
the reasonable expenses of preparing returns reflecting such taxes; provided
that Holdings and Parent Holdings agree to contribute to the Borrower any
refund Holdings or Parent Holdings receives relating to any such taxes; and

 

(vi)          the
Borrower may make cash Restricted Payments to Holdings, and Holdings may in
turn make cash Restricted Payments to Parent Holdings, to enable Holdings or
Parent Holdings to pay, and in amounts not to exceed the amount necessary to
pay the amount that the Borrower would have been required to pay for federal,
state, local or other taxes on income if it were deemed to be the common parent
of an affiliated group (within the meaning of Section 1504 of the Code) of
which only it and its Subsidiaries were members (and assuming for such purpose
that such group had the benefit of any losses of the Borrower and its
Subsidiaries previously used by Holdings or Parent Holdings); provided
that such payments may be made only in respect of the period during which the
Borrower is consolidated with Holdings and Parent Holdings for purposes of the
payment of such taxes (such payments being herein referred to as (“Permitted
Tax Distributions”).

 

Section
7.08  Payments of Indebtedness, etc.

 

(a)           Amendments of Agreements.  None of the Group Companies will, or will
permit any of their respective Subsidiaries to, after the issuance thereof,
amend, waive or modify (or permit the amendment, waiver or modification of) any
of the terms, agreements, covenants or conditions of or applicable to any
Indebtedness (other than the Senior Obligations and, in the absence of any
Default or Event of Default, Indebtedness permitted by Section 7.01(iii))
issued by such Group Company if such amendment, waiver or modification would
add or change any terms, agreements, covenants or conditions in any manner
adverse to any Group Company, or shorten the final maturity or average life to
maturity or require any payment to be made sooner than originally scheduled or
increase the interest rate applicable thereto or change any subordination
provision thereof.

 

(b)           Prohibition Against Certain Payments of Principal and
Interest of Certain Other Indebtedness.  None of the Group Companies will (i) directly
or indirectly, redeem, purchase, prepay, retire, defease or otherwise acquire
for value, prior to scheduled maturity, scheduled repayment or scheduled
sinking fund payment, any Subordinated Indebtedness), or set aside any funds
for such purpose, whether such redemption, purchase, prepayment, retirement or
acquisition is made at the option of the maker or at the option of the holder
thereof, and whether or not any such redemption, purchase,

 

119

 

prepayment, retirement or acquisition is required under the terms and
conditions applicable to such Indebtedness or (ii) release, cancel, compromise
or forgive in whole or in part any Indebtedness evidenced by any Intercompany
Note.

 

(c)           Management Fees.  Neither Holding or the Borrower shall, nor
shall they permit any of their respective Subsidiaries to, change or amend the
terms of the Management Agreement (or any other material document entered into
with respect to the payment of any fee to the Sponsor in connection therewith)
if the effect of such amendment is to (i) increase the interest rate (or
decrease the portion thereof that is not required to be paid in cash) payable
upon default on the Management Fees or otherwise increase any amount payable by
Holdings, the Borrower, any of their respective Subsidiaries thereunder or (ii)
change or amend any other term if such change or amendment would provide for
the payment of Management Fees (other than Management Fees contemplated by clause
(iii) of the definition thereof) during the continuation of any Event of
Default (except to the extent permitted hereunder), materially increase the
payment obligations of the obligor or otherwise add any provision that
provides, directly or indirectly, for the transfer of any property or assets of
the Parent or any of its Subsidiaries to the Sponsor or the parties thereto
other than the Loan Parties and their Subsidiaries in a manner adverse to the
Parent, the Borrower, any of their respective Subsidiaries or any Senior Credit
Party or Second Lien Credit Party.

 

Section
7.09  Transactions with Affiliates.  None of the Group
Companies will engage in any transaction or series of transactions with any
Affiliate, other than:

 

(i)            the
transactions set forth in the Management Agreement; provided that (A) no
Default or Event of Default shall have occurred and be continuing immediately
before or immediately after giving effect to any payment of Management Fees
contemplated by clauses (i) or (ii) of the definition thereof and
(B) the amount in respect of such fees not then allowed to be paid in cash by
virtue of the occurrence and continuance of an Event of Default shall be
deferred and shall not be paid unless and to the extent that no Default or Event
of Default shall have occurred and be continuing at the time of payment;

 

(ii)           transactions
permitted by Section 7.05;

 

(iii)          transactions
expressly permitted by Section 7.01, Section 7.04, Section
7.05, Section 7.06 or Section 7.07;

 

(iv)          normal
compensation, indemnities and reimbursement of reasonable expenses of officers
and directors, including stock incentive and option plans and agreements
relating thereto;

 

(v)           other
transactions with officers, directors, the Sponsor and its Affiliates in
existence on the Closing Date to the extent disclosed in Schedule 7.09;

 

(vi)          any
transaction entered into among the Borrower and its Wholly-Owned Domestic
Subsidiaries or among such Wholly-Owned Domestic Subsidiaries;

 

(vii)         transactions
entered into between US IP Holdco or between a Foreign IP Holdco and any Loan
Party in connection with a Foreign IP Transfer Transaction; and

 

(viii)        other
transactions which are engaged in by the Borrower or any of its Subsidiaries in
the ordinary course of its business on terms and conditions as favorable to
such Person as would be obtainable by it in a comparable arms’-length
transaction with an independent, unrelated third party.

 

120

 

Section
7.10  Fiscal Year; Organizational and Other Documents. 
None of the Group Companies will (i) change its fiscal year or (ii)
enter into any amendment, modification or waiver that is adverse in any respect
to the Lenders to its articles or certificate of incorporation, bylaws (or
analogous organizational documents) or any agreement entered into by it with
respect to its Equity Interests (including the Stockholders’ Agreement), in
each case as in effect on the Closing Date. 
The Borrower will cause the Group Companies to promptly provide the
Lenders with copies of all amendments to the foregoing documents and
instruments as in effect as of the Closing Date.

 

Section
7.11  Restrictions with Respect to Intercorporate Transfers.  None of the Group Companies will create or
otherwise cause or permit to exist any encumbrance or restriction which
prohibits or otherwise restricts (i) the ability of any such Subsidiary to (A)
make Restricted Payments or pay any Indebtedness owed to the Borrower or any
Subsidiary of the Borrower, (B) pay Indebtedness or other obligations owed to
any Loan Party, (C) make loans or advances to the Borrower or any Subsidiary of
the Borrower, (D) transfer any of its properties or assets to the Borrower or
any Subsidiary of the Borrower or (E) act as a Subsidiary Guarantor and pledge
its assets pursuant to the Loan Documents or any renewals, refinancings,
exchanges, refundings or extensions thereof or (ii) the ability of Holdings or
any Subsidiary of Holdings to create, incur, assume or permit to exist any Lien
upon its property or assets whether now owned or hereafter acquired to secure
the Senior Obligations, except in each case for prohibitions or restrictions
existing under or by reason of:

 

(i)            this
Agreement and the other Loan Documents;

 

(ii)           applicable
Law;

 

(iii)          restrictions
in effect on the date of this Agreement contained in the agreements governing
the Existing Indebtedness and in any agreements governing Permitted Refinancing
thereof if such restrictions are no more restrictive than those contained in
the agreements governing the Indebtedness being renewed, extended or
refinanced;

 

(iv)          customary
non-assignment provisions with respect to leases or licensing agreements
entered into by the Borrower or any of its Subsidiaries, in each case entered
into in the ordinary course of business;

 

(v)           any
restriction or encumbrance with respect to any asset of the Borrower or any of
its Subsidiaries or a Subsidiary of the Borrower imposed pursuant to an
agreement which has been entered into for the sale or disposition of such
assets or 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;

 

(vi)          customary
provisions in joint venture agreements and other similar agreements entered
into in the ordinary course of business in connection with Permitted Joint
Ventures; and

 

(vii)         Liens
permitted under Section 7.02 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.

 

Section 7.12  Ownership
of Subsidiaries; Limitations on Certain Activities.

 

(a)           Holdings
will not (i) hold any assets other than the Equity Interests of the Borrower,
(ii) have any material liabilities other than (A) liabilities under the Loan
Documents and (B)

 

121

 

tax liabilities in the ordinary course of business or
(iii) engage in any business or activity other than (A) owning the common stock
of the Borrower (including purchasing additional shares of common stock after
the Closing Date) and activities incidental or related thereto or to the
maintenance of the corporate existence of Holdings or compliance with
applicable Law and (B) acting as a Guarantor under the Guaranty and pledging
its assets to the Collateral Agents, for the benefit of the Lenders, pursuant
to the Collateral Documents to which it is a party.

 

(b)           Holdings
and the Borrower will not permit any Person other than Holdings to hold any
Equity Interests or Equity Equivalents of the Borrower.

 

(c)           US
IP Holdco will not (i) hold any assets other than the Equity Interests of the
Foreign IP Holdcos, (ii) have any liabilities other than liabilities under the
Loan Document, (iii) engage in any business or activity other than (A) owning
the common stock of the Foreign IP Holdcos and activities incidental or related
thereto or to the maintenance of its corporate existence or compliance with
applicable Law, (B) acting as a Guarantor under the Guaranty and pledging its
assets to the Collateral Agents, for the benefit of the Lenders, pursuant to
the Collateral Documents to which it is a party and (C) entering into the
intercompany loans and borrowings permitted hereby in connecting with the
Foreign IP Transfer Transaction or (iv) enter into any agreement other than
this Agreement and the other Loan Documents with any Person unless that Person
agrees that it will not institute against US IP Holdco any proceeding of the
type referred to in Section 8.01(f) hereof so long as there shall not
have elapsed one year and one day since the latest of the Revolving Termination
Date, the Term B Maturity Date and the Second Lien Maturity Date.

 

Section
7.13  Sale and Leaseback Transactions.  None of the Group
Companies will directly or indirectly become or remain liable as lessee or as
guarantor or other surety with respect to any lease (whether an Operating Lease
or a Capital Lease) of any property (whether real, personal or mixed), whether
now owned or hereafter acquired, (i) which such Group Company has sold or
transferred or is to sell or transfer to any other Person which is not a Group
Company or (ii) which such Group Company intends to use for substantially the
same purpose as any other property which has been sold or is to be sold or
transferred by such Group Company to another Person which is not a Group
Company in connection with such lease; provided, however, that
the Group Companies may enter into such transactions with respect to personal
property, in an aggregate amount of up to the Applicable Basket Amount in sales
proceeds during the term of this Agreement, if (i) after giving effect on a
Pro-Forma Basis to any such transaction the Borrower shall be in compliance
with all other provisions of this Agreement, including Section 7.01 and Section
7.02, (ii) the gross cash proceeds of any such transaction are at least
equal to the fair market value of such property (as determined by the Board of
Directors, whose determination shall be conclusive if made in good faith) and
(iii) the Net Cash Proceeds are forwarded to the Administrative Agent as set
forth in Section 2.09(b)(iv) to the extent required therein.

 

Section
7.14  Capital Expenditures.

 

(a)           None
of the Group Companies will make any Consolidated Capital Expenditures, except
that during any of the fiscal years set forth below, the Borrower and its
Subsidiaries may make Consolidated Capital Expenditures (other than
Consolidated Capital Expenditures made with the Net Cash Proceeds of one or
more Qualifying Equity Issuances) so long as the aggregate amount of such
Consolidated Capital Expenditures does not exceed the amount indicated opposite
such period; provided that the reference below to the fiscal year ending
October 31, 2004 shall be to the year from the Closing Date to the last day of
such fiscal year:

 

122

 

	
  Fiscal Year Ending October 31

  	
   

  	
  Amount

  	
   

  
	
  2004

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
  2005

  	
   

  	
  $

  	
  4,000,000

  	
   

  
	
  2006

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  6,000,000

  	
   

  
	
  2008

  	
   

  	
  $

  	
  7,000,000

  	
   

  
	
  2009 and
  thereafter

  	
   

  	
  $

  	
  8,000,000

  	
   

  

 

(b)           To
the extent that Consolidated Capital Expenditures permitted under subsection (a)
above for any period set forth above are less than the applicable amount
specified in the table in subsection (a) above, 50% of the difference
may be carried forward and utilized to make Consolidated Capital Expenditures
during the immediately succeeding fiscal year.

 

(c)           Notwithstanding
the foregoing, the Borrower and its Subsidiaries may make Consolidated Capital
Expenditures (which Consolidated Capital Expenditures will not be included in
any determination under subsection (a) above) with (A) the Net Cash
Proceeds of Asset Dispositions, Casualties and Condemnations, to the extent
such Net Cash Proceeds are not required to be applied to repay Loans or cash
collateralize Letter of Credit Liabilities pursuant to Section 2.09(b)(iii),
(B) the Net Cash Proceeds of Qualifying Equity Issuances not otherwise utilized
for any purpose specified in clause (iii) of the definition of
“Qualifying Equity Issuance” and (C) that portion of Excess Cash Flow for the
fiscal years ended after the Closing Date, if any, not required to be used to
prepay the Loans or Cash Collateralize L/C Obligations in accordance with Section
2.09 or utilized to make Investments under Section 7.06(a)(xvii) or
to make Restricted Payments under Section 7.07(iv).

 

Section
7.15  Additional Negative Pledges.  None of the Group
Companies will enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any Lien
upon its properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for an obligation if security is given for
some other obligation, except (i) pursuant to this Agreement and the other Loan
Documents and (ii) pursuant to any document or instrument governing Capital
Lease Obligations or Purchase Money Indebtedness incurred pursuant to Section
7.01(iii) if any such restriction contained therein relates only to the
asset or assets acquired in connection therewith.

 

Section
7.16  Impairment of Security Interests.  None of the Group
Companies will (i) take or omit to take any action which action or omission
might or would materially impair the security interests in favor of the
Collateral Agents with respect to the Collateral or (ii) grant to any Person
(other than the Collateral Agents pursuant to the Collateral Documents) any
interest whatsoever in the Collateral, except for Permitted Liens.

 

Section
7.17  Financial Covenants.

 

(a)           Senior Lenders: Senior Secured Leverage Ratio.  Each of Holdings and the Borrower agree with
each Senior Lender that the Senior Secured Leverage Ratio on the last day of
any fiscal quarter will not be greater than the ratio set forth below opposite
such fiscal quarter:

 

123

 

	
  Fiscal Quarter Ended

  	
   

  	
  Ratio

  	
   

  
	
  July 31, 2004

  	
   

  	
  3.95 to 1.0

  	
   

  
	
  October 31, 2004 – January 31, 2005

  	
   

  	
  3.60 to 1.0

  	
   

  
	
  April 30, 2005 – July 31, 2005

  	
   

  	
  3.35 to 1.0

  	
   

  
	
  October 31, 2005 – January 31, 2006

  	
   

  	
  3.00 to 1.0

  	
   

  
	
  April 30, 2006 – July 31, 2006

  	
   

  	
  2.75 to 1.0

  	
   

  
	
  October 31, 2006 – January 31, 2007

  	
   

  	
  2.50 to 1.0

  	
   

  
	
  April 30, 2007 – July 31, 2007

  	
   

  	
  2.25 to 1.0

  	
   

  
	
  October 31, 2007 and thereafter

  	
   

  	
  2.00 to 1.0

  	
   

  

 

(b)           Senior Lenders: Leverage Ratio.  Each of Holdings and the Borrower agrees with
each Senior Lender that the Leverage Ratio on the last day of any fiscal
quarter will not be greater than the ratio set forth below opposite such fiscal
quarter:

 

	
  Fiscal Quarter Ended

  	
   

  	
  Ratio

  	
   

  
	
  July 31, 2004

  	
   

  	
  5.25 to 1.0

  	
   

  
	
  October 31. 2004 – January 31, 2005

  	
   

  	
  5.00 to 1.0

  	
   

  
	
  April 30, 2005 – July 31, 2005

  	
   

  	
  4.75 to 1.0

  	
   

  
	
  October 31, 2005 – January 31, 2006

  	
   

  	
  4.50 to 1.0

  	
   

  
	
  April 30, 2006 – July 31, 2006

  	
   

  	
  4.25 to 1.0

  	
   

  
	
  October 31, 2006 – January 31, 2007

  	
   

  	
  4.00 to 1.0

  	
   

  
	
  April 30, 2007 – July 31, 2007

  	
   

  	
  3.75 to 1.0

  	
   

  
	
  October 31, 2007 – January 31, 2008

  	
   

  	
  3.50 to 1.0

  	
   

  
	
  April 30, 2008 – July 31, 2008

  	
   

  	
  3.25 to 1.0

  	
   

  
	
  October 31, 2008 and thereafter

  	
   

  	
  3.00 to 1.0

  	
   

  

 

(c)           Second Lien Lenders: Leverage Ratio.  Each of Holdings and the Borrower agrees with
each Second Lien Lender that the Leverage Ratio on the last day of any fiscal
quarter will not be greater than the ratio set forth below opposite such fiscal
quarter:

 

	
  Fiscal Quarter Ended

  	
   

  	
  Ratio

  	
   

  
	
  July 31, 2004

  	
   

  	
  5.75 to 1.0

  	
   

  
	
  October 31. 2004 – January 31, 2005

  	
   

  	
  5.50 to 1.0

  	
   

  
	
  April 30, 2005 – July 31, 2005

  	
   

  	
  5.25 to 1.0

  	
   

  
	
  October 31, 2005 – January 31, 2006

  	
   

  	
  5.00 to 1.0

  	
   

  
	
  April 30, 2006 – July 31, 2006

  	
   

  	
  4.75 to 1.0

  	
   

  
	
  October 31, 2006 – January 31, 2007

  	
   

  	
  4.50 to 1.0

  	
   

  
	
  April 30, 2007 – July 31, 2007

  	
   

  	
  4.25 to 1.0

  	
   

  
	
  October 31, 2007 – January 31, 2008

  	
   

  	
  4.00 to 1.0

  	
   

  
	
  April 30, 2008 – July 31, 2008

  	
   

  	
  3.75 to 1.0

  	
   

  
	
  October 31, 2008 – January 31, 2009

  	
   

  	
  3.50 to 1.0

  	
   

  
	
  April 30, 2009 and thereafter

  	
   

  	
  3.25 to 1.0

  	
   

  

 

(d)           Senior Lenders: Fixed Charge Coverage Ratio.  Each of Holdings and the Borrower agrees with
each Senior Lender that the Fixed Charge Coverage Ratio on the last day of each
fiscal quarter, for the period of four consecutive fiscal quarters of Holdings
then ending and in each case taken as a single accounting period, will not be
less than 2.00 to 1.00.

 

124

 

Section
7.18  Independence of Covenants.  All covenants
contained herein shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that
such action or condition would be permitted by an exception to, or otherwise be
within the limitations of, another covenant shall not avoid the occurrence of a
Default if such action is taken or condition exists.

 

ARTICLE
VIII

DEFAULTS

 

Section
8.01  Events of Default.  An Event of Default shall exist upon the
occurrence of any of the following specified events or conditions (each an “Event
of Default”):

 

(a)           Payment.  Any Loan Party shall:

 

(i)            default
in the payment when due (whether by scheduled maturity, acceleration or
otherwise) of any principal of any of the Loans or of any L/C Disbursement; or

 

(ii)           default,
and such default shall continue for five or more Business Days, in the payment
when due of any interest on the Loans, or of any fees or other amounts owing
hereunder, under any of the other Loan Documents or in connection herewith.

 

(b)           Representations.  Any representation or warranty made or deemed
to be made by any Loan Party herein, in any of the other Loan Documents, or in
any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove untrue in any material respect on the date as of
which it was made or deemed to have been made.

 

(c)           Covenants.  Any Loan Party shall:

 

(i)            default
in the due performance or observance of any term, covenant or agreement
contained in Sections  6.10, 6.11, 6.12, 6.13,
6.14 or Article VII;

 

(ii)           default in
the due performance or observance by it of any term, covenant or agreement
contained in Article VI (other than those referred to in subsection
(a) or (c)(i) of this Section 8.01) and such default shall
continue unremedied for a period of ten Business Days after the earlier of an
executive officer of a Loan Party becoming aware of such default or notice
thereof given by the Administrative Agent; or

 

(iii)          default
in the due performance or observance by it of any term, covenant or agreement
(other than those referred to in subsection (a) or (c)(i) or (ii)
of this Section 8.01) contained in this Agreement and such default shall
continue unremedied for a period of 30 days after the earlier of an executive
officer of a Loan Party becoming aware of such default or notice thereof given
by the Administrative Agent.

 

(d)           Other Loan Documents.  (i) Any Loan Party shall default in the
due performance or observance of any term, covenant or agreement in any of the
other Loan Documents the consequence of which is to adversely affect the
ability of the Loan Parties to perform their material obligations under the
Loan Documents taken as a whole and such default shall continue unremedied for
a period of 30 days after the earlier of an executive officer of a Loan Party
becoming aware of such default or notice thereof given by the Administrative
Agent, (ii) except pursuant to the terms thereof, any Loan Document shall
fail in any material respect to be in full force and effect or any Loan Party
shall so assert or (iii) except pursuant to the terms thereof, any Loan
Document shall fail in any material respect to give the

 

125

 

Administrative Agent, the Collateral Agent and/or the
Lenders the security interests, liens, rights, powers and privileges purported
to be created thereby.

 

(e)           Cross-Default.

 

(i)            any Group
Company (A) fails to make payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), regardless of amount,
in respect of any Indebtedness or Guaranty Obligation (other than in respect of
(x) Indebtedness outstanding under the Loan Documents and (y) Swap Agreements)
having an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than the Threshold Amount, (B) fails to
perform or observe any other condition or covenant, or any other event shall
occur or condition shall exist, under any agreement or instrument relating to
any such Indebtedness or Guaranty Obligation, if the effect of such failure,
event or condition is to cause, or to permit, with or without the giving of
notice or lapse of time or both, the holder or holders or beneficiary or
beneficiaries of such Indebtedness or Guaranty Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, such Indebtedness to be declared to be due and payable prior to its
stated maturity, or such Guaranty Obligation to become payable, or cash
collateral in respect thereof to be demanded or (C) shall be required by the
terms of such Indebtedness or Guaranty Obligation to offer to prepay or
repurchase such Indebtedness or the primary Indebtedness underlying such
Guaranty Obligation (or any portion thereof) prior to the stated maturity
thereof; or

 

(ii)           there
occurs under any Swap Agreement or Swap Obligation an Early Termination Date
(as defined in such Swap Agreement) resulting from (A) any event of default
under such Swap Agreement as to which any Group Company is the Defaulting Party
(as defined in such Swap Agreement) or (B) any Termination Event (as so
defined) as to which any Group Company is an Affected Party (as so defined),
and, in either event, the Swap Termination Value owed by a Group Company as a
result thereof is greater than the Threshold Amount.

 

(f)            Insolvency Events.  (i) Any Group Company shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any Debtor Relief Law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing or
(ii) an involuntary case or other proceeding shall be commenced against any
Group Company seeking liquidation, reorganization or other relief with respect
to it or its debts under any Debtor Relief Law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a period of
60 days, or any order for relief shall be entered against any Group Company
under the federal bankruptcy laws as now or hereafter in effect.

 

(g)           Judgments.  (i) One or more judgments, orders, decrees or
arbitration awards is entered against any Group Company involving in the
aggregate a liability (to the extent not covered by independent third-party
insurance or an indemnity from a credit-worthy third party as to which the
insurer or indemnitor, as applicable, does not dispute coverage), as to any
single or related series of transactions, incidents or conditions, in excess of
the Threshold Amount, and the same shall not have been discharged, vacated or
stayed pending appeal within 30 days after the entry thereof or (ii) any
non-monetary

 

126

 

judgment, order or decree is entered against any Group Company which
has or would reasonably be expected to have a Material Adverse Effect, and
there shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect.

 

(h)           ERISA. 
(i) An ERISA Event occurs which has resulted or could reasonably be
expected to result in liability of any Group Company or any ERISA Affiliate in
an aggregate amount in excess of the Threshold Amount, (ii) there shall exist
an amount of Unfunded Liabilities, individually or in the aggregate, for all
Plans and Foreign Pension Plans (excluding for purposes of such computation any
Plans and Foreign Pension Plans with respect to which assets exceed benefit
liabilities), in an aggregate amount in excess of the Threshold Amount, (iii)
any Foreign Pension Plan is not in substantial compliance with all applicable
pension benefits and tax laws, (iv) any contribution required to be made in
accordance with any applicable law or the terms of any Foreign Pension Plan has
not been made; (v) any event has occurred or condition exists with respect to
any Foreign Pension Plan that has resulted or could result in any Foreign
Pension Plan being ordered or required to be wound up in whole or in part
pursuant to any applicable laws or having any applicable registration revoked
or refused for the purposes of any applicable pension benefits or tax laws or
being placed under the administration of the relevant pension benefits
regulatory authority or being required to pay any taxes or penalties under
applicable pension benefits and tax laws; (vi) an order has been made or notice
has been given pursuant to any applicable pension benefits and tax laws in
respect of any Foreign Pension Plan requiring any person to take or refrain
from taking any action in respect thereof or that there has been a
contravention of any such applicable laws; (vii) an event has occurred or a
condition exists that has resulted or could result in any Group Company being
required to pay, repay or refund any amount other than contributions required
to be made or expenses required to be paid in the ordinary course) to or on
account of any Foreign Pension Plan or a current or former member thereof; or
(viii) an event has occurred or a condition exists that has resulted or could
result in a payment being made out of a guarantee fund established under the
applicable pension benefits laws in respect of a Foreign Pension Plan; and
which, with respect to all the events and obligations described in the
preceding clauses (iii) through (viii) of this Section 8.01(h),
would reasonably be expected to have a Material Adverse Effect.

 

(i)            Guaranties.  Any Guaranty given by any Loan Parties or any
provision thereof shall, except pursuant to the terms thereof, cease to be in
full force and effect, or any Guarantor thereunder or any Person acting by or
on behalf of such guarantor shall deny or disaffirm such Guarantor’s
obligations under such Guaranty.

 

(j)            Impairment of Collateral.  Any security interest purported to be created
by any Collateral Document shall cease to be, or shall be asserted by any Group
Company not to be, a valid, perfected, Requisite Priority Lien (except as
otherwise expressly provided in such Collateral Document) in the securities,
assets or properties covered thereby, other than in respect of assets and
properties which, individually and in the aggregate, are not material to the
Group Companies taken as a whole or in respect of which the failure of the
security interests in respect thereof to be valid, perfected first priority
security interests will not in the reasonable judgment of the Applicable
Collateral Agent have a Material Adverse Effect on the rights and benefits of
the Lenders under the Loan Documents taken as a whole;

 

(k)           Ownership.  A Change of Control shall occur.

 

Section
8.02  Acceleration; Remedies. Upon the occurrence of an Event of
Default and at any time thereafter, unless and until such Event of Default has
been waived in writing with the consent of those Lenders as may be required
pursuant to Section 10.01, the Administrative Agent (or with respect to
the Collateral, the Applicable Collateral Agent) shall, upon the request and
direction of the Required Senior Lenders (or, to the extent any such action is
allowed by the terms of the Intercreditor Agreement to

 

127

 

be taken by the Required Second Lien Lenders, the Required Lenders), by
written notice to the Borrower, take any of the following actions without
prejudice to the rights of the Agents or any Lender to enforce its claims
against the Loan Parties except as otherwise specifically provided for herein
or in the Intercreditor Agreement:

 

(a)           Termination of Commitments.  Declare the Commitments terminated whereupon
the Commitments shall be immediately terminated.

 

(b)           Acceleration of Loans.  Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by a Loan Party to any of the Lenders
hereunder to be due whereupon the same shall be immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Loan Parties.

 

(c)           Cash Collateral.  Direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event of
Default under Section 8.01(f), it will immediately pay) to the Senior
Collateral Agent additional cash, to be held by the Senior Collateral Agent,
for the benefit of the L/C Issuers and the Revolving Lenders, in a cash
collateral account as additional security for the L/C Obligations in respect of
subsequent drawings under all then outstanding Letters of Credit in an amount
equal to 102% of the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.

 

(d)           Enforcement of Rights.  Enforce any and all rights and interests
created and existing under the Loan Documents, including, without limitation
but subject to the Intercreditor Agreement, all rights and remedies existing
under the Collateral Documents, all rights and remedies against a Guarantor and
all rights of set-off.  In addition to
the remedies set forth above, the Collateral Agents may, subject to the
Intercreditor Agreement, exercise any remedies provided for by the Collateral
Documents in accordance with the terms thereof or any other remedies provided
by applicable Law.

 

(e)           Enforcement Rights Vested Solely in Administrative
Agent and Applicable Collateral Agent.  The Lenders agree that this Agreement may be
enforced only by the action of the Administrative Agent, acting upon the
instructions of the Required Senior Lenders (or, to the extent any such action
is allowed by the terms of the Intercreditor Agreement to be taken by the
Required Second Lien Lenders, the Required Lenders), and, with respect to the
Collateral, the Applicable Collateral Agent, and that no other Finance Party
shall have any right individually to seek to enforce this Agreement or to
realize upon the security to be granted hereby.

 

Notwithstanding the foregoing, if an Event of Default
specified in Section 8.01(f) shall occur, then the Commitments shall
automatically terminate, all Loans, all reimbursement obligations under Letters
of Credit, all accrued interest in respect thereof and all accrued and unpaid
fees and other indebtedness or obligations owing to the Lenders hereunder and
under the other Loan Documents shall immediately become due and payable and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without the giving
of any notice or other action by the Administrative Agent or the Lenders, which
notice or other action is expressly waived by the Loan Parties.

 

Section
8.03  Rescission of Events of Default.  If at any time after termination of the
Commitments or acceleration of the maturity of the Loans, the Borrower shall
pay all arrears of interest and all payments on account of principal of the
Loans and Unreimbursed Amounts that shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law,
on

 

128

 

overdue interest, at the rates specified herein) and all Events of
Default and Defaults (other than non-payment of principal of and accrued
interest on the Loans due and payable solely by virtue of acceleration) shall
be remedied or waived pursuant to Section 10.01 then upon the written
consent of the Required Lenders and written notice to the Borrower, the
termination of the Commitments or the acceleration and their consequences may
be rescinded and annulled; provided, however, that such action
shall not affect any subsequent Event of Default or Default or impair any right
or remedy consequent thereon.  The
provisions of the preceding sentence are intended merely to bind the Lenders
and the L/C Issuers to a decision that may be made at the election of the
Required Lenders, and such provisions are not intended to benefit the Borrower
and do not give the Borrower the right to require the Lenders to rescind or
annul any acceleration hereunder, even if the conditions set forth herein are
met.

 

ARTICLE
IX

AGENCY PROVISIONS

 

Section
9.01  Appointment and Authorization of the Agents.

 

(a)           Appointment.  Each Lender and L/C Issuer hereby irrevocably
appoints, designates and authorizes Bank of America, N.A. as Administrative
Agent, Senior Collateral Agent and Second Lien Collateral Agent and CSFB as
Syndication Agent, and each Lender and each L/C issuer authorizes each such
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such
duties as are expressly delegated to it by the terms of this Agreement or any
other Loan Document, together with such powers as are reasonably incidental
thereto.  Without limiting the foregoing,
each Lender and each L/C Issuer hereby authorizes each Collateral Agent to execute
and deliver, and to perform its obligations under, each of the Loan Documents
to which such Collateral Agent is a party, to exercise all rights, powers and
remedies that such Agent may have under such Loan Documents and, in the case of
the Collateral Documents, to act as agent under such Collateral Documents for
(i) in the case of the Administrative Agent and the Senior Collateral Agent,
the Senior Finance Parties and (ii) in the case of the Second Lien Agent, the
Second Lien Credit Parties.  Notwithstanding
any provision to the contrary contained elsewhere herein or in any other Loan
Document, the Agents shall not have any duties or responsibilities, except
those expressly set forth herein or in the Intercreditor Agreement, nor shall
the Agents have or be deemed to have any fiduciary relationship with any Lender
or participant, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent. 
Without limiting the generality of the foregoing sentence, the use of
the term “agent” herein and in the other Loan Documents with reference to any
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter
of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.

 

(b)           L/C
Issuers.  Each L/C Issuer shall act
on behalf of the Revolving Lenders with respect to any Letters of Credit issued
by it and the documents associated therewith, and each L/C Issuer shall have
all of the benefits and immunities (i) provided to the Administrative Agent in
this Article IX with respect to any acts taken or omissions suffered by
such L/C Issuer in connection with Letters of Credit issued by it or proposed
to be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term “Administrative
Agent” as used in this Article IX and in the definition of “Agent-Related
Person” included the L/C Issuer with respect to such acts or omissions, and
(ii) as additionally provided herein with respect to the L/C Issuer.

 

(c)           Instructions of Required Lenders.  Without limiting an Agent’s right to
utilization the discretion granted hereunder or under any other Loan Document,
as to any matters not expressly provided for by this Agreement and the other
Loan Documents (including enforcement or collection), (i)

 

129

 

the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Senior Lenders (or, to the extent any
such action is allowed by the terms of the Intercreditor Agreement to be taken
by the Required Second Lien Lenders, the Required Lenders), and such
instructions shall be binding upon all Lenders and each L/C Issuer, (ii) the
Senior Collateral Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Senior Lenders, and such instructions shall be
binding upon the Senior Lenders and (iii) subject to the Intercreditor
Agreement, the Second Lien Agent shall not be required to exercise any discretion
or take any action, but shall be required to act or refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Second Lien Lenders, and such instructions shall
be binding upon the Second Lien Lenders; provided, however, that
neither Collateral Agent shall be required to take any action that (x) such
Collateral Agent in good faith believes exposes it to personal liability unless
such Agent receives an indemnification satisfactory to it from the Lenders and
the Issuers with respect to such action or (y) is contrary to any Loan Document
or applicable Law.  Each Collateral Agent
agrees to give to each other Agent and each Lender and each Issuer prompt
notice of each notice given to it by any Loan Party pursuant to the terms of
this Agreement or the other Loan Documents.

 

(d)           Agency Duties Limited to Applicable Classes.  In performing their respective functions and
duties hereunder and under the other Loan Documents, (i) the Administrative Agent
is acting solely on behalf of the Lenders and the L/C Issuers except to the
limited extent provided in Section 10.07(c), (ii) the Senior Collateral
Agent is action solely on behalf of the Senior Finance Parties and (iii) the
Second Lien Agent is acting solely on behalf of the Second Lien Credit Parties,
and each of their respective duties are entirely administrative in nature.  Neither Collateral Agent assumes or shall be
deemed to have assumed any obligation other than as expressly set forth herein
and in the other Loan Documents or any other relationship as the agent,
fiduciary or trustee of or for any Lender, L/C Issuer or holder of any other
Finance Obligation.

 

Section
9.02  Delegation of Duties.  The Administrative Agent and each of the
Collateral Agents may execute any of its duties hereunder or under the other
Loan Documents by or through agents, employees or attorneys-in-fact and shall
be entitled to advice of counsel and other consultants or experts concerning
all matters pertaining to such duties. 
The Administrative Agent and the Collateral Agents shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it in the absence of gross negligence or willful misconduct.

 

Section
9.03  Exculpatory Provisions.  No Agent-Related Person shall be (i) liable
for any action lawfully taken or omitted to be taken by any of them under or in
connection herewith or in connection with any of the other Loan Documents or
the transactions contemplated hereby or thereby (except for its own gross
negligence or willful misconduct in connection with its duties expressly set
forth herein) or (ii) responsible in any manner to any of the Lenders or
participants for any recitals, statements, representations or warranties made by
any of the Loan Parties contained herein or in any of the other Loan Documents
or in any certificate, report, document, financial statement or other written
or oral statement referred to or provided for in, or received by an Agent under
or in connection herewith or in connection with the other Loan Documents, or
enforceability or sufficiency therefor of any of the other Loan Documents, or
for any failure of any Loan Party to perform its obligations hereunder or
thereunder.  No Agent-Related Person
shall be under any obligation to any Lender or participant or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or the use of the Letters of Credit
or of the existence or possible existence of any Default or Event of Default or
to inspect the properties, books or records of the Loan Parties or any
Affiliate thereof.

 

130

 

Section
9.04  Reliance on Communications.

 

(a)           Each
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, communication, signature, resolution, representation, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, electronic mail message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to any Loan Party), independent accountants
and other experts selected by such Agent. 
Each Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.  Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders (or such greater number of Lenders as may be expressly required hereby
in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.

 

(b)           For
purposes of determining compliance with the conditions specified in Section
4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

Section
9.05  Notice of Default.  No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the such Agent
for the account of the Lenders, unless the such Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a “notice of
default.”  The Administrative Agent will
notify the Lenders of its receipt of any such notice.  The Administrative Agent shall take such action
with respect to such Default as may be directed by the Required Lenders in
accordance with Article VIII; provided, however, that
unless and until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.

 

Section
9.06  Credit Decision; Disclosure of Information by Administrative Agent; No
Reliance on Arranger’s or Agents’ Customer Identification Program.

 

(a)           Independent Credit Decision.  Each Lender acknowledges that no
Agent-Related Person has made any representation or warranty to it, and that no
act by the Administrative Agent hereafter taken, including any consent to and
acceptance of any assignment or review of the affairs of any Loan Party or any
Affiliate thereof, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their
possession.  Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower and the other Loan Parties hereunder.  Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis,

 

131

 

appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower
and the other Loan Parties.  Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent herein, the Agents shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Loan Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.

 

(b)           US Patriot Act Customer Identification Programs.  Each Lender acknowledges and agrees that
neither such Lender nor any of its Affiliates, participants or assignees may
rely on the Arranger or any Agent to carry out such Lender’s, Affiliate’s,
participant’s or assignee’s customer identification program or other
obligations required or imposed under or pursuant to the U.S. Patriot Act or
the regulations thereunder, including the regulations contained in 31 C.F.R.
103.121 (as hereafter amended or replaced, the “CIP Regulations”), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any of the Loan Parties,
their Affiliates or agents, the Loan Documents or the transactions hereunder or
contemplated hereby:  (i) any
identification procedures; (ii) and recordkeeping; (iii) comparisons with
government lists, (iv) customer notices; or (v) other procedures required under
the CIP regulations or such other Laws.

 

Section
9.07  Indemnification.  Whether or not the transactions contemplated
hereby are consummated, the Lenders agree to indemnify each Agent-Related
Person (to the extent not reimbursed by or on behalf of any Loan Party and
without limiting the obligation of the Borrower and the other Loan Parties to
do so), ratably according to their respective Commitments (or if the
Commitments have expired or been terminated, in accordance with the respective
principal amounts of outstanding Loans and Participation Interests of the
Lenders), from and against any and all Indemnified Liabilities which may at any
time (including, without limitation, at any time following payment in full of
the Credit Obligations) be imposed on, incurred by or asserted against any Agent-Related
Person; provided that no Lender shall be liable for the payment to any
Agent-Related Person of any portion of such Indemnified Liabilities resulting
from such Person’s gross negligence or willful misconduct; provided, however,
that no action taken in accordance with the directions of the Required Lenders
shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section 9.07; provided, further, that to
the extent that an L/C Issuer is entitled to indemnification under this Section
9.07 solely in its capacity and role as L/C Issuer, only the Revolving
Lenders shall be required to indemnify such L/C issuer in accordance with Section
9.07.  Without limitation of the
foregoing, each Lender shall reimburse the Administrative Agent and each
Collateral Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the
Administrative Agent or either Collateral Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document or any document contemplated by or referred to herein,
to the extent that the Administrative Agent or such Collateral Agent is not
reimbursed for such expenses by or on behalf of the Borrower or any other Loan
Party.  The agreements in this Section
9.07 shall survive the payment of the Credit Obligations and all other
obligations and amounts payable hereunder and under the other Loan Documents
and the resignation of the Administrative Agent and the Collateral Agents.

 

Section
9.08  Agents in Their Individual Capacity.  Bank of America and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire Equity Interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
each of the Loan Parties and their respective Affiliates as though Bank of
America were not the Administrative Agent, the L/C Issuer, the Swing Line
Lender, the Senior Collateral Agent or the Second

 

132

 

Lien Collateral Agent hereunder or under another Loan Document and
without notice to or consent of the Lenders. 
The Lenders acknowledge that, pursuant to such activities, Bank of
America or its Affiliates may receive information regarding any Loan Party or
its Affiliates (including information that may be subject to confidentiality
obligations in favor of such Loan Party or such Affiliate) and acknowledge that
the Administrative Agent and the Collateral Agents shall be under no obligation
to provide such information to them. 
With respect to its Loans, Bank of America shall have the same rights
and powers under this Agreement as any other Lender and may exercise such
rights and powers as though it were not the Administrative Agent, the L/C
Issuer, the Swing Line Lender or a Collateral Agent, and the terms “Lender” and
“Lenders” include Bank of America in its individual capacity.

 

Section
9.09  Successor Agents.  Each of the Administrative Agent, the Senior
Collateral Agent and the Second Lien Collateral Agent may resign as Administrative
Agent (as to one or more Classes), Senior Collateral Agent or Second Lien
Collateral Agent, as applicable, upon 30 days’ notice to the Lenders and the
Borrower; provided that any such resignation by Bank of America shall
also constitute its resignation as L/C Issuer and Swing Line Lender.  Upon any such resignation by the
Administrative Agent, the Required Lenders of the applicable Class or Classes
shall have the right to appoint a successor Administrative Agent.  Upon any such resignation by the Senior
Collateral Agent, the Required Senior Lenders shall have the right to appoint a
successor Senior Collateral Agent.  Upon
any such resignation by the Second Lien Collateral, the Required Second Lien
Lenders shall have the right to appoint a successor Second Lien Collateral
Agent.  If no successor Agent shall have
been so appointed, and shall have accepted such appointment, within 30 days
after the retiring Agent’s giving of notice of resignation, then the retiring
Agent may, on behalf of the Lenders of the applicable Class or Classes, appoint
a successor Administrative Agent, Senior Collateral Agent or Second Lien
Collateral Agent, as the case may be, selected from among the Lenders, in the
case of the resignation of the Administrative Agent, the Senior Lenders, in the
case of the resignation of the Senior Collateral Agent, and the Second Lien
Lenders, in the case of the resignation of the Second Lien Collateral
Agent.  In any case, such appointment
shall be subject to the prior written approval of the Borrower (which approval
may not be unreasonably withheld and shall not be required upon the occurrence
and during the continuance of an Event of Default).  Upon the acceptance of any appointment as
Administrative Agent, Senior Collateral Agent or Second Lien Collateral Agent
by a successor Agent, such successor Agent shall succeed to, and become vested
with, all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents. 
Prior to any retiring Agent’s resignation hereunder as Administrative
Agent, Senior Collateral Agent or Second Lien Collateral Agent, the retiring
Agent shall take such action as may be reasonably necessary to assign to the
successor Agent its rights as Administrative Agent, Senior Collateral Agent or
Second Lien Collateral Agent, as the case may be, under the Loan
Documents.  After such resignation, the
retiring Agent shall continue to have the benefit of this Article X as
to any actions taken or omitted to be taken by it while it was an Agent under
this Agreement and the other Loan Documents. 
If no successor Administrative Agent, Senior Collateral Agent or Second
Lien Collateral Agent is appointed prior to the effective date of the
resignation of the Administrative Agent, Senior Collateral Agent or Second Lien
Collateral Agent , the resigning Agent may appoint, after consulting with the
Lenders of the applicable Class or Classes and the Borrower, a successor agent
from among the Lenders of the applicable Class or Classes.  Upon the acceptance of its appointment as
successor Agent hereunder, the Person acting as such successor Agent shall
succeed to all the rights, powers and duties of the retiring Agent (and, if
applicable, L/C Issuer and Swing Line Lender) and the respective terms “Administrative
Agent,” “L/C Issuer,” “Swing Line Lender,” “Senior
Collateral Agent” and “Second Lien Collateral Agent” shall mean such
successor Administrative Agent, Letter of Credit Issuer, Swing Line Lender,
Senior Collateral Agent or Second Lien Collateral Agent, and the retiring
Administrative Agent’s appointment, powers and duties as Administrative Agent
shall be terminated, the retiring L/C Issuer’s and Swing Line Lender’s rights,
powers and duties as such shall be terminated, the retiring Senior Collateral
Agent’s rights, powers and duties as such shall be terminated and the retiring
Second Lien

 

133

 

Collateral Agent’s rights, powers and duties as such shall be
terminated, without any other or further act or deed on the part of such
retiring Administrative Agent, L/C Issuer or Swing Line Lender or any other
Lender, other than the obligation of the successor L/C Issuer to issue letters
of credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or to make other arrangements satisfactory to the
retiring L/C Issuer to effectively assume the obligations of the retiring L/C
Issuer with respect to such Letters of Credit. 
After any retiring Administrative Agent’s, Senior Collateral Agent’s or
Second Lien Collateral Agent’s resignation hereunder as Administrative Agent,
Senior Collateral Agent or Second Lien Collateral Agent, as applicable, the provisions
of this Article IX and Sections 10.04 and 10.05 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent, Senior Collateral Agent or Second Lien Collateral
Agent under this Agreement.  If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of
the duties of the Administrative Agent hereunder until such time, if any, as
the Required Lenders appoint a successor agent as provided for above.  If no successor Senior Collateral Agent has
accepted appointment as Senior Collateral Agent by the date which is 30 days
following a retiring Senior Collateral Agent’s notice of resignation, the
retiring Senior Collateral Agent’s resignation shall nevertheless thereupon
become effective and the Senior Lenders shall perform all of the duties of the
Senior Collateral Agent hereunder until such time, if any, as the Required
Senior Lenders appoint a successor agent as provided for above.  If no successor Second Lien Collateral Agent
has accepted appointment as Second Lien Collateral Agent by the date which is
30 days following a retiring Second Lien Collateral Agent’s notice of
resignation, the retiring Second Lien Collateral Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of
the duties of the Second Lien Collateral Agent hereunder until such time, if
any, as the Required Second Lien Lenders appoint a successor agent as provided
for above.

 

Section
9.10  Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan or L/C
Obligation shall then be due and payable as herein expressed or by declaration
or otherwise and irrespective of whether the Administrative Agent shall have
made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

 

(i)            to file
and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, L/C Obligations and all other Credit
Obligations that are owing and unpaid and to file such other documents as may
be necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative
Agent and their respective agents and counsel and all other amounts due the
Lenders and the Administrative Agent under Sections 2.09 and 10.04)
allowed in such judicial proceeding; and

 

(ii)           to collect
and receive any monies or other property payable or deliverable on any such claims
and to distribute the same;

 

and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders, to pay to the
Administrative Agent any amount due for the reasonable

 

134

 

compensation, expenses, disbursements and advances of
the Administrative Agent and its agents and counsel, and any other amounts due
the Administrative Agent under Sections 2.09 and 10.04.

 

Nothing contained herein shall be deemed to authorize
the Administrative Agent to authorize or consent to or accept or adopt on
behalf of any Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Credit Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any
Lender in any such proceeding.

 

Section
9.11  Collateral and Guaranty Matters.

 

(a)           Actions Taken by Agents or Required Lenders.  Each Lender and each L/C Issuer agrees that
any action taken by the Collateral Agents or the Required Lenders (or, where
required by the express terms of this Agreement or the Intercreditor Agreement,
a greater or lesser proportion of the Lenders) in accordance with the
provisions of this Agreement or of the other Loan Documents, and the exercise
by the Collateral Agents or Required Lenders (or, where so required, such
greater or lesser proportion) 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, L/C Issuers, Senior Credit
Parties and Second Lien Credit Parties. 
Without limiting the generality of the foregoing, (i) the Administrative
Agent shall have the sole and exclusive right and authority to act as the disbursing
and collecting agent for the Lenders and the L/C Issuers with respect to all
payments and collections arising in connection herewith and with the Collateral
Documents, (ii) the Collateral Agents shall jointly have the sole authority to
(A) execute and deliver each Collateral Document and accept delivery of each
such agreement delivered by the Holdings, the Borrower or any of its
Subsidiaries, (B) act as collateral agent for the Lenders, the L/C Issuers, the
Senior Credit Parties and the Second Lien Credit Parties for purposes of the perfection
of all security interests and Liens created by such agreements and all other
purposes stated therein, provided, however, that each Collateral
Agent hereby appoints, authorizes and directs each Lender and L/C Issuer to act
as collateral sub-agent for the Collateral Agents, the Lenders and the L/C
Issuers for purposes of the perfection of all security interests and Liens with
respect to the Collateral, including any deposit accounts maintained by a Loan
Party with, and cash and Cash Equivalents held by, such Lender or such L/C
Issuer, (C) manage, supervise and otherwise deal with the Collateral, (D) take
such action as is necessary or desirable to maintain the perfection and
priority of the security interests and Liens created or purported to be created
by the Collateral Documents and (E) except as may be otherwise specifically
restricted by the terms hereof or of any other Loan Document, exercise to the
exclusion of the Finance Parties all remedies given to the Collateral Agents,
the Lenders, the L/C Issuers, the other Senior Credit Parties and the other
Second Lien Credit Parties with respect to the Collateral under the Loan
Documents relating thereto, applicable law or otherwise.

 

(b)           Intercreditor Agreement; Termination Statements.  Each of the Lenders and the L/C Issuers
hereby directs each Collateral Agent to execute the Intercreditor Agreement and
to execute and deliver or file such termination and partial release statements
and do such other things as are necessary to release Liens to be released or
subordinated in accordance with, and subject to the terms and conditions of,
the Intercreditor Agreement.

 

(c)           Certain Actions in Respect of Security Interests and
Guaranties.  The Lenders
irrevocably authorize the Administrative Agent, at its option and in its
discretion:

 

(i)            to
release any Lien on any property granted to or held by the Administrative Agent
or either Collateral Agent under any Loan Document (A) upon termination of the
Commitments and payment in full of all Finance Obligations (other than
contingent indemnification obligations) and the expiration or termination of
all Letters of Credit, (B) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any other

 

135

 

Loan Document, or
(C) subject to Section 10.01, if approved, authorized or ratified in
writing by the Required Lenders;

 

(ii)           to
subordinate any Lien on any property granted to or held by the Administrative
Agent or either Collateral Agent under any Loan Document to the holder of any
Lien on such property that is permitted by Section 7.02(xvi) and (xxiii);
and

 

(iii)          to
release any Guarantor from its obligations under the Guaranty if such Person
ceases to be a Subsidiary as a result of a transaction permitted hereunder.

 

(d)           Upon
request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this Section
9.11.

 

Section
9.12  Related Obligations. 
The benefit of the Loan Documents and of the provisions of this
Agreement relating to the Collateral shall extend to and be available in
respect of any Cash Management Obligations and to any Swap Obligations
permitted hereunder from time to time owing to one or more Swap Creditors
(collectively, “Related Obligations”) solely on the condition and
understanding, as among the Collateral Agents and all Senior Finance Parties
and Second Lien Credit Parties, that (i) the Related Obligations shall be
entitled to the benefit of the Loan Documents and the Collateral to the extent
expressly set forth in this Agreement and the other Loan Documents and to such
extent the Collateral Agents shall hold, and have the right and power to act
with respect to, the Guaranty and the Collateral on behalf of and as agent for
the holders of the Related Obligations, but the Collateral Agents are otherwise
acting solely as agent for the Lenders and the L/C Issuers and shall have no
fiduciary duty, duty of loyalty, duty of care, duty of disclosure or other
obligation whatsoever to any holder of Related Obligations, (ii) all matters,
acts and omissions relating in any manner to the Guaranty, the Collateral, or
the omission, creation, perfection, priority, abandonment or release of any
Lien, shall be governed solely by the provisions of this Agreement and the
other Loan Documents and no separate Lien, right, power or remedy shall arise
or exist in favor of any Finance Party under any separate instrument or
agreement or in respect of any Related Obligation, (iii) each Finance Party
shall be bound by all actions taken or omitted, in accordance with the
provisions of this Agreement and the other Loan Documents, by the Collateral
Agents and the Required Lenders, the Required Senior Lenders or the Required
Second Lien Lenders, as applicable, each of whom shall be entitled to act at
its sole discretion and exclusively in its own interest given its own
Commitments and its own interest in the Loans, L/C Obligations and other Senior
Credit Obligation or Second Lien Obligation to it arising under this Agreement
or the other Loan Documents, without any duty or liability to any Swap Creditor
or holder of Cash Management Obligations or as to any Related Obligation and
without regard to whether any Related Obligation remains outstanding or is
deprived of the benefit of the Collateral or becomes unsecured or is otherwise
affected or put in jeopardy thereby, (iv) no holder of Related Obligations and
no other Finance Party (except the Senior Lenders and the Second Lien Lenders
to the extent set forth in this Agreement) shall have any right to be notified
of, or to direct, require or be heard with respect to, any action taken or
omitted in respect of the Collateral or under this Agreement or the Loan
Documents and (v) no holder of any Related Obligation shall exercise any right
of setoff, banker’s lien or similar right except to the extent provided in Section
10.09 and then only to the extent such right is exercised in compliance
with Section 2.13.

 

Section
9.13  Other Agents; Arrangers and Managers.  None of the Lenders
or other Persons identified on the facing page or signature pages of this
Agreement as a “syndication agent,” “documentation agent,” “co-agent,” “book
manager,” “lead manager,” “arranger,” “lead arranger” or “co-arranger” shall
have any right, power, obligation, liability, responsibility or duty under this
Agreement

 

136

 

other than, in the case of such Lenders, those
applicable to all Lenders as such. 
Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender.  Each Lender acknowledges that it
has not relied, and will not rely, on any of the Lenders or other Persons so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.

 

Section
9.14  Agents’ Fees; Arranger Fee.  The Borrower shall
pay to the Administrative Agent for its own account, to the Collateral Agents
for their own account and to Banc of America Securities LLC and Credit Suisse
First Boston, in its capacities as Joint Lead Arrangers, for their own
accounts, fees in the amounts and at the times previously agreed upon between
the Borrower and the Administrative Agent, the Collateral Agents and such Joint
Lead Arrangers, respectively, in each case with respect to this Agreement, the other
Loan Documents and the transactions contemplated hereby and thereby.

 

ARTICLE
X

MISCELLANEOUS

 

Section
10.01  Amendments, Etc.

 

(a)           Amendments Generally.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
any Loan Party therefrom, shall in any event be effective unless the same shall
be in writing and (i) in the case of any such waiver or consent, signed by the
Required Lenders (or by the Administrative Agent with the consent of the
Required Lenders), (ii) in the case of any amendment necessary to implement the
terms of a Facilities Increase in accordance with the terms of Section
2.10(a) hereof, by the Borrower and the Administrative Agent and (iii) in
the case of any other amendment, by the Required Lenders (or by the
Administrative Agent with the consent of the Required Lenders) and the
Borrower, and each such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided
that the Administrative Agent and the Borrower may, with the consent of the
other, amend, modify or supplement this Agreement and any other Loan Document
to cure any ambiguity, typographical error, defect or inconsistency if such
amendment, modification or supplement does not adversely affect the rights of
any Agent, any Lender or any L/C Issuer.

 

(b)           Amendments and Waivers Pertinent to Affected Lenders.  Notwithstanding paragraph (a) above
and in addition to any other consent that may be required thereunder, no
amendment, waiver or consent shall:

 

(i)            waive any
condition set forth in Section 4.01(a) without the written consent of
each Lender, except with respect to a condition based upon another provision
hereof, the waiver of which requires only the concurrence of the Required
Lenders and, in the case of the conditions specified in Section 4.01,
subject to the provisions of Section 4.02;

 

(ii)           extend or
increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 8.02) without the written consent of such Lender;

 

(iii)          postpone
any date fixed by this Agreement or any other Loan Document for any payment
(excluding mandatory prepayments) of principal, interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby;

 

137

 

(iv)          reduce the
principal of, or the rate of interest specified herein on, any Loan or unreimbursed
L/C Disbursement, or (subject to subsection (e) below) any fees or other
amounts payable hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby; provided, however,
that only the consent of the Required Lenders shall be necessary (A) to amend
the definition of “Default Rate” or to waive any obligation of the Borrower to
pay interest or Letter of Credit Fees at the Default Rate or (B) to amend any
financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
any unreimbursed L/C Disbursement or to reduce any fee payable hereunder;

 

(v)           except as
provided in the Intercreditor Agreement, change Section 2.13 in a manner
that would alter the pro rata sharing of payments required thereby without the
written consent of each Lender;

 

(vi)          change any
provision of this Section or the definition of “Required Lenders,” “Required
Senior Lenders,” “Required Revolving Lenders, “Required Term B
Lenders” or “Required Second Lien Lenders” or any other provision
hereof specifying the number or percentage of Lenders required to amend, waive
or otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender which is a Lender
of the applicable Class so specified, in each case other than as part of a
Facilities Increase for which the conditions specified in Section 4.04
are satisfied (without amendment or waiver of Section 4.04(d) unless consented
to by the Required Second Lien Lenders);

 

(vii)         release
the Borrower or substantially all of the other Loan Parties from its or their
obligations under the Loan Documents without the written consent of the
Required Senior Lenders and, if and only to the extent so provided in the
Intercreditor Agreement, the Required Second Lien Lenders (provided that
the Administrative Agent may, without the consent of any Lender, release any
Guarantor (or all or substantially all of the assets of a Guarantor) that is
sold or transferred in compliance with Section 7.05);

 

(viii)        release
all or substantially all of the Collateral securing the Credit Obligations
hereunder without the written consent of the Required Senior Lenders and, if
and only to the extent so provided in the Intercreditor Agreement, the Required
Second Lien Lenders (provided that the Applicable Collateral Agent may,
without consent from any Lender, release any Collateral that is sold or
transferred by a Loan Party in compliance with Section 7.05 or released
in compliance with Section 9.01(b) and exercise all rights and remedies
against the Collateral as provided by the Collateral Documents and the
Intercreditor Agreement or as otherwise permitted by Law);

 

(ix)           amend,
modify or waive the conditions to funding any Revolving Loan or Swing Line Loan
or to issuing any Letter of Credit in each case after the Closing Date, without
the written consent of Required Revolving Lenders;

 

(x)            (A)
modify the application of payments to the Revolving Loans pursuant to Section
2.09(b) or the reduction of the Revolving Credit Commitments pursuant to Section
2.10(c) or (d) without the written consent of the Required Revolving
Lenders, (B) modify the application of payments to the Term B Loans pursuant to
Section 2.09(b) without the written consent of the Required Term B
Lenders or (C) modify the application of payments to Second Lien Loans pursuant
to Section 2.09(b), without the written consent of the Required Second
Lien Lenders;

 

138

 

(xi)           (A) affect
the rights or duties of the L/C Issuer under this Agreement or any Letter of
Credit Request relating to any Letter of Credit issued or to be issued by it,
without the written consent of the L/C Issuer, (B) affect the rights or duties
of the Swing Line Lender under this Agreement, without the written consent of
the Swing Line Lender or (C) affect the rights or duties of the Administrative
Agent under this Agreement or any other Loan Document, without the written
consent of the Administrative Agent;

 

(xii)          amend,
modify or waive Section 10.07(h) without the consent of each Granting
Lender all or any part of whose Loans are being funded by an SPC at the time of
such amendment, modification or waiver;

 

(xiii)         amend
or modify any Applicable Basket Amount applicable exclusively to the Senior
Lenders, or waive or consent to any violation of any covenant or agreement of
any Loan Party specified herein or in any other Loan Document by reference to
an Applicable Basket Amount applicable exclusively to the Senior Lenders,
without the written consent of the Required Senior Lenders;

 

(xiv)        amend
or modify any Applicable Basket Amount applicable exclusively to the Second
Lien Lenders, or waive or consent to any violation of any covenant or agreement
of any Loan Party specified herein by reference to an Applicable Basket Amount
applicable exclusively to the Second Lien Lenders, without the written consent
of the Required Second Lien Lenders; or

 

(xv)         (A) other than
as part of a Facilities Increase for which the conditions specified in Section
4.04 are satisfied (without amendment or waiver thereof unless consented to
by the Required Second Lien Lenders), increase the sum of the aggregate
Revolving Credit Commitments and the outstanding principal amount of the Term B
Loans (other than to permit the receipt, accretion or amortization of original
issue discount or the receipt or accretion of interest paid in kind), (B)
subordinate any Lien on the Collateral to the Lien of any other creditor of the
Borrower or any other Loan Party except as contemplated in Section 5.01
of the Intercreditor Agreement or (C) amend the Intercreditor Agreement (except
for amendments contemplated therein to be made without the consent of the
Required Second Lien Lenders), without the written consent of the Required
Second Lien Lenders.

 

(c)           Amendments and Waivers Requiring Consent Solely of
Required Senior Lenders. 
Notwithstanding paragraph (a) above, an amendment, modification
or waiver of Section 7.17 (a), (b) or (d) or of any
covenant or agreement of any Loan Party specified herein by reference to an
Applicable Basket Amount where such covenant or agreement is violated with
respect to the Senior Lenders but not as to the Second Lien Lenders shall
require only the written consent of the Required Senior Lenders (or by the
Administrative Agent with the consent of the Required Senior Lenders) and the
Borrower.

 

(d)           Amendments and Waivers Requiring Consent Solely of
Required Second Lien Lenders. 
Notwithstanding paragraph (a) above, an amendment, modification
or waiver of Section 4.04(d) or Section 7.17(c) shall require
only the written consent of the Required Second Lien Lenders (or by the
Administrative Agent with the consent of the Required Second Lien Lenders) and
the Borrower.

 

(e)           Fee Letter Amendment; Defaulting Lenders.  Notwithstanding anything to the contrary
herein, (i) the Fee Letter may be amended, or rights and privileges thereunder
waived, in a writing executed only by the parties thereto and (ii) no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.

 

139

 

Each Lender and each holder of a Note shall be bound
by any waiver, amendment or modification authorized by this Section 10.01
regardless of whether its Note shall have been marked to make reference
therein, and any consent by any Lender or holder of a Note pursuant to this Section
10.01 shall bind any Person subsequently acquiring a Note from it, whether
or not such Note shall have been so marked.

 

Section
10.02  Notices and Other Communications;
Facsimile Copies.

 

(a)           General.  Unless otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). 
All such written notices shall be mailed certified or registered mail,
faxed or delivered to the applicable address, facsimile number or (subject to
subsection (c) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:

 

(i)            if to the
Borrower, the Administrative Agent, a L/C Issuer, the Swing Line Lender or a
Collateral Agent, to the address, facsimile number, electronic mail address or
telephone number specified for such Person on Schedule 10.02 or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the other parties;
and

 

(ii)           if to any
other Lender, to the address, facsimile number, electronic mail address or
telephone number specified in its Administrative Questionnaire or to such other
address, facsimile number, electronic mail address or telephone number as shall
be designated by such party in a notice to the Borrower, the Administrative
Agent, such L/C Issuer and the Swing Line Lender.

 

Notices sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices sent by facsimile shall be deemed to have been given when
sent (except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
Business Day for the recipient).  Notices
delivered through electronic communications to the extent provided in subsection
(b) below, shall be effective as provided in such subsection (b).

 

(b)           Electronic Communications.  Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall
not apply to notices to any Lender pursuant to Article II if such Lender
has notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. 
The Administrative Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

 

(c)           Effectiveness of Facsimile Documents and Signatures.  Loan Documents may be transmitted and/or
signed by facsimile.  The effectiveness
of any such documents and signatures shall, subject to requirements of Law,
have the same force and effect as manually-signed originals and shall be
binding on all Loan Parties, the Administrative Agent, the Collateral Agents
and the Lenders.  The Administrative
Agent may also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.

 

140

 

(d)           Reliance by Administrative Agent and Lenders.  The Administrative Agent, the Collateral
Agents and the Lenders shall be entitled to rely and act upon any notices
purportedly given by or on behalf of the Borrower or any other Loan Party even
if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  The Borrower shall indemnify each
Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance in good faith by such Person on each
notice purportedly given by or on behalf of the Borrower.  All telephonic notices to and other
communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

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

 

Section
10.04  Attorney Costs, Expenses and Taxes.  Holdings and the
Borrower jointly and severally agree (i) to pay or reimburse the Administrative
Agent for all costs and expenses incurred in connection with the development,
preparation, negotiation and execution of this Agreement and the other Loan
Documents and any amendment, waiver, consent or other modification of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all Attorney Costs,
and (ii) to pay or reimburse the Administrative Agent, each Collateral Agent
and each Lender for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or the other Loan Documents (including all such costs and
expenses incurred during any “workout” or restructuring in respect of the
Credit Obligations and during any legal proceeding, including any proceeding
under any Debtor Relief Law), including all Attorney Costs); provided
that the Borrower shall not be required to reimburse the legal fees and
expenses of more than one outside counsel (in addition to up to one local
counsel in each applicable local jurisdiction) for all Persons indemnified
under this clause (ii) unless, in the written opinion of outside counsel
reasonably satisfactory to the Borrower and the Administrative Agent,
representation of all such indemnified persons would be inappropriate due to
the existence of an actual or potential conflict of interest.  The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges
and fees and taxes related thereto, and other out-of-pocket expenses incurred
by any Agent and the cost of independent public accountants and other outside
experts retained by or on behalf of any Agent or any Lender.  All amounts due under this Section 10.04
shall be payable within ten Business Days after demand therefor.  The agreements in this Section 10.04
shall survive the termination of the Commitments and repayment of all Credit
Obligations.

 

Section
10.05  Indemnification.  Whether or not the transactions contemplated
hereby are consummated, Holdings and the Borrower, jointly and severally, agree
to indemnify and hold harmless each Agent-Related Person, each Lender and their
respective Affiliates, directors, officers, employees, counsel, agents and, in
the case of any Funds, trustees and investment advisors and attorneys-in-fact
(collectively the “Indemnitees”) from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against any such Indemnitee in any way relating to or arising
out of or in connection with (i) the execution, delivery, enforcement,
performance or administration of any Loan

 

141

 

Document or any other agreement, letter or instrument delivered in
connection with the transactions contemplated thereby or the consummation of
the transactions contemplated thereby, (ii) any Commitment, Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the L/C Issuer to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not
strictly comply with the terms of such Letter of Credit), (iii) any actual or
alleged presence or Release of Hazardous Materials on or from any property
currently or formerly owned or operated by the Borrower, any Subsidiary or any
other Loan Party, or any Environmental Liability related in any way to the
Borrower, any Subsidiary or any other Loan Party, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory (including any
investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”); provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses or disbursements are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the bad faith, gross
negligence or willful misconduct of such Indemnitee or from a material breach by
such Indemnitee of its obligations under the Loan Documents; and provided
further that the Borrower shall not be required to reimburse the legal
fees and expenses of more than one outside counsel (in addition to any
reasonably necessary special counsel and up to one local counsel in each
applicable local jurisdiction) for all Indemnitees unless, in the written
opinion of outside counsel reasonably satisfactory to the Borrower and the
Administrative Agent, representation of all such Indemnitees would be inappropriate
due to the existence of an actual or potential conflict of interest.  No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee have any liability for
any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or therewith
(whether before or after the Closing Date). 
All amounts due under this Section 10.05 shall be payable within
ten Business Days after demand therefor. 
Each of Holdings and the Borrower agrees not to assert or to permit any
of their respective Subsidiaries to assert any claim against any Agent, any
Lender, any of their Affiliates or any of their respective directors, officers,
employees, attorneys, agents and advisers, and each of the Agents, and the
Lenders agree not to assert or permit any of their respective Subsidiaries to
assert any claim against Holdings, the Borrower or any of their respective
Subsidiaries or any of their respective directors, officers, employees,
attorneys, agents or advisors, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Loan Documents, any of the transactions contemplated herein or therein or the
actual or proposed use of the proceeds of the Loans or of the Letters of
Credit.  The agreements in this Section
shall survive the resignation of the Administrative Agent and any Collateral
Agent, the replacement of any Lender, the termination of the Commitments and
the repayment, satisfaction or discharge of all the other Finance Obligations

 

Section
10.06  Payments Set Aside.  To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent, any Collateral
Agent or any Lender, or the Administrative Agent, a Collateral Agent or any
Lender exercises its right of set-off, and such payment or the proceeds of such
set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent, a Collateral Agent or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (i) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (ii) each Lender severally agrees to pay to the
Administrative Agent or the Collateral Agent, as applicable, upon demand its
applicable share of any amount so recovered from or repaid by the

 

142

 

Administrative Agent or Collateral Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect.

 

Section
10.07  Successors and Assigns.

 

(a)           Generally.  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 the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of subsection (b) of
this Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section, (iii) by way of pledge or assignment of
a security interest subject to the restrictions of subsection (f) of
this Section or (iv) to an SPC in accordance with the provisions of subsection
(h) of this Section (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 parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated
hereby, the Indemnitees) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

 

(b)           Assignments.  Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Loans,
its Notes, its Commitments and any Participation Interest in Letters of Credit
and Swing Line Loans held by it); provided, however, that:

 

(i)            except in
the case of an assignment to another Lender, an Affiliate of an existing Lender
or any Approved Fund (A) the aggregate amount of the Revolving Commitment of
the assigning Lender subject to such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not, without the consent of the Administrative
Agent and, if no Default or Event of Default has occurred and is continuing,
the Borrower, be less than $5,000,000 and an integral multiple of $1,000,000
(or such lesser amount as shall equal the assigning Lender’s entire Revolving
Commitment), (B) the aggregate amount of any Term B Loans or Second Lien Loans
of an assigning Lender subject to each such assignments (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if “Trade Date” is specified in the Assignment
and Assumption, as of the Trade Date) shall not, without the consent of the
Administrative Agent and, if no Default or Event of Default has occurred and is
continuing, the Borrower, be less (with respect to either Class of Term Loans)
than $1,000,000 (or such lesser amount as shall equal the assigning Lender’s
entire Term Loans of the applicable Class owing to it) and (C) after giving
effect to such assignment, the aggregate amount of the Revolving Commitment of
and Term Loans at the time owing to the assigning Lender shall not, without the
consent of the Borrower if no Default or Event of Default has occurred and is
continuing (solely with respect to the Revolving Loans and the Term B Loans but
not the Second Lien Loans as to which no consent by the Borrower shall be
required), be less than $1,000,000 (unless the assigning Lender shall have
assigned its entire Revolving Commitment and all the Term Loans at the time
owing it pursuant to such assignment or assignments otherwise complying with
this Section 10.07 executed substantially simultaneously with such
assignment);

 

(ii)           each
partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lenders’ rights and obligations under this Agreement with
respect to the Loans or the Commitment assigned;

 

143

 

(iii)          any
assignment of a Commitment must be approved by the Administrative Agent unless
the proposed assignee is itself a Lender (whether or not the proposed assignee
would otherwise qualify as an Eligible Assignee);

 

(iv)          the parties
to such assignment shall execute and deliver to the Administrative Agent and,
only with respect to any assignment of all or a portion of the Revolving
Committed Amount, the L/C Issuers for their acceptance an Assignment and
Assumption in the form of Exhibit C, together with any Note subject to
such assignment and to the Administrative Agent a processing fee of $3,500
(except, in the case of contemporaneous assignments by any Lender to one or
more Approved Funds, only a single processing fee shall be payable for such
assignments), payable as agreed between the assigning Lender and the assignee
and which shall not be required to be paid by the Borrower; and

 

(v)           if
applicable, the assignee shall deliver to the Administrative Agent the information
referred to in Section 10.19(b).

 

Subject to acceptance and recording thereof by the
Administrative Agent pursuant to subsection (c) of this Section, from
and after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, 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, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption 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 3.01, 3.04, 3.05, 10.04, 10.05 and 10.22
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 or Notes 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 participation in such rights and obligations in
accordance with subsection (d) of this Section.

 

(c)           Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption 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 L/C Obligations 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 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.  In addition, at any time that a request for a
consent for a material or other substantive change to the Loan Documents is
pending, any Lender wishing to consult with other Lenders in connection
therewith may request and receive from the Administrative Agent a copy of the
Register.

 

(d)           Participations.  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 the Borrower or
any of the Borrower’s Affiliates or 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 L/C Obligations and/or Swing Line
Loans) owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance

 

144

 

of such obligations and (iii) the Borrower, the Administrative Agent,
the Collateral Agents 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.  Subject to subsection
(e) of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 3.01, 3.04 and 3.05
to the same extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.09 as
though it were a Lender, provided such Participant agrees to be subject to Section
2.13 as though it were a Lender.

 

(e)           Limitation on Certain Rights of Participants.  A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 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 Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 3.01
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
10.15 as though it were a Lender.

 

(f)            Other Assignments.  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, 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)           Certain Definitions.  As used herein, the following terms have the
following meanings:

 

“Eligible Assignee” means (i) a Lender, (ii) an
Affiliate of a Lender, (iii) an Approved Fund and (iv) any other Person (other
than a natural Person) approved by (A) the Administrative Agent, (B) in the
case of any assignment of a Revolving Commitment, the L/C Issuers and the Swing
Line Lender and (C) unless (x) such Person is taking delivery of an assignment
in connection with physical settlement of a credit derivatives transaction or
(y) a Default or an Event of Default has occurred and is continuing at the time
any assignment is effected pursuant to Section 10.07(b), the Borrower
(each such approval not to be unreasonably withheld, conditioned or delayed and
any such approval required of the Borrower to be deemed given by the Borrower
if no objection from the Borrower is received by the assigning Lender and the
Administrative Agent within two Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower); provided,
however, that (i) if Bank of America, N.A. or one or more of its
Affiliates is a L/C Issuer, any assignment of a Revolving Commitment (including
any assignment to a Lender, an Affiliate of a Lender or an Approved Fund) shall
require its consent, (ii) none of Holdings and its Affiliates shall qualify as
Eligible Assignees; and provided, further, that no Person shall
be an Eligible Assignee if such Person appears on the list of Specially
Designated Nationals and Blocked Persons prepared by the U.S. Treasury
Department’s Office of Foreign Assets Control or the purchase by such Person of
an assignment or the performance by any Agent of its duties under the Loan
Documents with respect to such Person violates or would violate any
Anti-Terrorism Law.

 

“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 of its business.

 

145

 

“Approved Fund” means any Fund that is
administered or managed by (i) a Lender, its parent company or Subsidiary of
either (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an
entity that administers or manages a Lender.

 

(h)           Other Funding Vehicles.  Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a
special purpose funding vehicle identified as such in writing from time to time
by the Granting Lender to the Administrative Agent and the Borrower (an “SPC”)
the option to provide all or any part of any Loan that such Granting Lender
would otherwise be obligated to make pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to fund any
Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails
to make all or any part of such Loan, the Granting Lender shall be obligated to
make such Loan pursuant to the terms hereof or, if it fails to do so, to make
such payment to the Administrative Agent as is required under Section
2.03(b).  Each party hereto hereby
agrees that (i) neither the grant to any SPC nor the exercise by any SPC of
such option shall increase the costs or expenses or otherwise increase or
change the obligations of the Borrower under this Agreement (including its
obligations under Section 3.04), (ii) no SPC shall be liable for any
indemnity or similar payment obligation under this Agreement for which a Lender
would be liable, and (iii) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Loan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder
shall utilize the Commitment of the Granting Lender to the same extent, and as
if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other Senior Obligations
of any SPC, it will not institute against, or join any other Person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding under the laws of the United States or
any State thereof.  Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrower and the Administrative Agent and with the
payment of a processing fee of $3,500, assign all or any portion of its right
to receive payment with respect to any Loan to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding of Loans to any rating agency, commercial paper dealer or provider of
any surety or guaranty or credit or liquidity enhancement to such SPC.

 

(i)            Certain Assignments by Bank of America.  Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to subsection (b) above, Bank of America may, (i)
upon 30 days’ notice to the Borrower and the Lenders, resign as L/C Issuer
and/or (ii) upon 30 days’ notice to the Borrower, resign as Swing Line
Lender.  In the event of any such
resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled
to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender
hereunder; provided, however, that no failure by the Borrower to
appoint any such successor shall affect the resignation of Bank of America as
L/C Issuer or Swing Line Lender, as the case may be.  If Bank of America resigns as L/C Issuer, it
shall retain all the rights and obligations of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or purchase
Participation Interests in Letters of Credit and L/C Obligations pursuant to Section
2.05 (e)).  If Bank of America
resigns as Swing Line Lender, it shall retain all the rights of the Swing Line
Lender provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation, including the right
to require the Lenders to make Base Rate Loans or Purchase Participation
Interests in outstanding Swing Line Loans pursuant to Section 2.01(d)(vi).

 

Section
10.08  Confidentiality.  Each of the Administrative Agent, the
Collateral Agents and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that

 

146

 

Information may be disclosed (i) to its Affiliates and to it and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential); (ii) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (in which case the Administrative Agent, such Collateral Agent or such
Lender, as applicable, shall use reasonable efforts to notify the Borrower
prior to such disclosure, in any case including any self-regulatory authority,
such as the National Association of Insurance Commissioners); (iii) to the
extent required by applicable Laws or regulations or by any subpoena or similar
legal process; (iv) to any other party to this Agreement; (v) in connection
with the exercise of any remedies hereunder or under any other Loan Document or
any action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (vi) subject to an
agreement containing provisions substantially the same as those of this
Section, to (A) any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights or obligations under this Agreement,
(B) any pledgee referred to in Section 10.07(f) or (C) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (vii) with the
consent of the Borrower or (viii) to the extent such Information (A) becomes
publicly available other than as a result of a breach of this Section or (B)
becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower.  For purposes of this Section, “Information”
means all information received from the Borrower or any of its Subsidiaries
relating to the Borrower or any Subsidiary or any of their respective
businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower or any Subsidiary, provided that, in the case
of information received from the Borrower or any Subsidiary after the date
hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential
information.  Notwithstanding the
foregoing, any Agent and any Lender may place advertisements in financial and
other newspapers and periodicals or on a home page or similar place for
dissemination of information on the Internet or worldwide web as it may choose,
and circulate similar promotional materials, after the closing of the
transactions contemplated by this Agreement in the form of a “tombstone” or
otherwise describing the names of the Loan Parties, or any of them, and the
amount, type and closing date of such transactions, all at their sole expense.

 

Section
10.09  Set-off.  In addition to any rights now or hereafter
granted under applicable Law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, after obtaining the prior written consent of the Administrative Agent,
each Lender (and each of its Affiliates) is authorized at any time and from
time to time, without presentment, demand, protest or other notice of any kind
(all of such rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or specific) and any other
indebtedness at any time held or owing by such Lender (including, without
limitation, branches, agencies or Affiliates of such Lender wherever located)
to or for the credit or the account of any Loan Party against obligations and
liabilities of such Loan Party to the Lenders hereunder, under the Notes, under
the other Loan Documents or otherwise, irrespective of whether the
Administrative Agent or the Lenders shall have made any demand hereunder and
although such obligations, liabilities or claims, or any of them, may be
contingent or unmatured or denominated in a currency different from that of the
applicable deposit or indebtedness, and any such set-off shall be deemed to
have been made immediately upon the occurrence of an Event of Default even
though such charge is made or entered on the books of such Lender subsequent
thereto.  The Loan Parties hereby agree
that to the extent permitted by law any Person purchasing a participation in
the Loans, Commitments and L/C Obligations hereunder pursuant to Section
2.01(d),  2.05(a) or (e), 2.13 or 10.07(d) may
exercise all rights of set-off with respect to its

 

147

 

participation interest as fully as if such Person were a Lender
hereunder and any such set-off shall reduce the amount owed by such Loan Party
to the Lender.

 

Section
10.10  Interest Rate Limitation.  Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts that are treated as
interest on such Loan under applicable Law (collectively, the “Charges”),
shall exceed the maximum lawful rate (the “Maximum Rate”) that may be
charged or contracted for, charged or otherwise received by the Lender holding
such Loan in accordance with applicable Law, the rate of interest payable in
respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section 10.09,
shall be cumulated and the interest and Charges payable to such Lender in
respect of other Loans or periods shall be increased (but not above the Maximum
Rate therefor) until such Lender shall have received such cumulated amount,
together with interest thereon at the Federal Funds Rate to the date of
payment.

 

Section
10.11  Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.

 

Section
10.12  Integration.  This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on
the subject matter hereof and thereof and supersedes all prior agreements,
written or oral, on such subject matter. 
In the event of any conflict between the provisions of this Agreement
and those of any other Loan Document, the provisions of this Agreement shall
control; provided that the inclusion of supplemental rights or remedies
in favor of the Administrative Agent, the Collateral Agents or the Lenders in
any other Loan Document shall not be deemed a conflict with this
Agreement.  Each Loan Document was
drafted with the joint participation of the respective parties thereto and
shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.

 

Section
10.13  Survival of Representations and Warranties. 
All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery
hereof and thereof.  Such representations
and warranties have been or will be relied upon by the Agents and each Lender,
regardless of any investigation made by any Agent or any Lender or on their
behalf and notwithstanding that the Agent or any Lender may have had notice or
knowledge of any Default or Event of Default at the time of any Credit
Extension, and shall continue in full force and effect as long as any Loan or
any other Credit Obligation shall remain unpaid or unsatisfied or any Letter of
Credit shall remain outstanding.

 

Section
10.14  Severability.  If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (i) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby and (ii) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

148

 

Section
10.15  Tax Forms.

 

(a)           Certain Provisions Pertinent to Foreign Lenders.

 

(i)            Each
Lender that is not a “United States person” within the meaning of Section
7701(a)(30) of the Code (a “Foreign Lender”) shall deliver to the
Administrative Agent, prior to receipt of any payment subject to withholding
under the Code (or upon accepting an assignment of an interest herein), two
duly signed completed copies of whichever of the following forms is applicable:
(A) Internal Revenue Service Form W-8BEN, certifying that such Foreign Lender
is entitled to benefits under an income tax treaty to which the United States
is a party that reduces to zero the rate of withholding on payments of
interest; (B) Internal Revenue Service Form W-8ECI; (C) Internal Revenue
Service Form W-8IMY (including all appropriate attachments); (D) in the case of
a Foreign Lender claiming the benefits of the exemption for portfolio interest
under Section 881(c) of the Code, (x) a certificate to the effect that such
Foreign Lender is not (1) a “bank” within the meaning of Section 881(c)(3)(A)
of the Code, (2) a “10 percent shareholder” of the Borrower within the meaning
of Section 881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code and (y) duly completed copies of
Internal Revenue Service Form W-8BEN; or (E) any other form or certificate required
by any taxing authority (including any certificate required by Section 871(h)
of the Internal Revenue Code), certifying that such Foreign Lender is entitled
to an exemption from tax on payments pursuant to this Agreement or any other
Loan Document.  Thereafter and from time
to time, each such Foreign Lender shall (A) promptly submit to the
Administrative Agent such additional duly completed and signed copies of one of
such forms (or such successor forms as shall be adopted from time to time by
the relevant United States taxing authorities) as may then be available under
then current United States laws and regulations to avoid, or such evidence as
is satisfactory to the Borrower and the Administrative Agent of any available
exemption from, United States withholding taxes in respect of all payments to
be made to such Foreign Lender by the Borrower pursuant to this Agreement, (B)
promptly notify the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (C) if
the Borrower is required to pay any additional amount to or for the account of
such Lender pursuant to Section 3.01 hereof, then such Lender will use
reasonable efforts to change the jurisdiction of its Applicable Lending office
if, in the judgment of such Lender, such change would (x) eliminate or reduce
any such additional payment which may thereafter accrue, (y) not subject such
Lender to any unreimbursed cost or expense and (z) not be otherwise
disadvantageous to such Lender.

 

(ii)           Each
Foreign Lender, to the extent it does not act or ceases to act for its own
account with respect to any portion of any sums paid or payable to such Lender
under any of the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to the Administrative Agent on the
date when such Foreign Lender ceases to act for its own account with respect to
any portion of any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the reasonable
exercise of its discretion), (A) two duly signed completed copies of the forms
or statements required to be provided by such Lender as set forth above, to
establish the portion of any such sums paid or payable with respect to which
such Lender acts for its own account that is not subject to U.S. withholding
tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any
successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Lender is not acting for its
own account with respect to a portion of any such sums payable to such Lender.

 

(iii)          The
Borrower shall not be required to pay any additional amount to any Foreign
Lender under Section 3.01 (A) with respect to any Taxes required to be
deducted or

 

149

 

withheld on the
basis of the information, certificates or statements of exemption such Lender
transmits with an IRS Form W-8IMY pursuant to this Section 10.15(a) or
(B) if such Lender shall have failed to satisfy the foregoing provisions of
this Section 10.15(a); provided that if such Lender shall have
satisfied the requirement of this Section 10.15(a) on the date such
Lender became a Lender or ceased to act for its own account with respect to any
payment under any of the Loan Documents, nothing in this Section 10.15(a)
shall relieve the Borrower of its obligation to pay any amounts pursuant to Section
3.01 in the event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person for the
account of which such Lender receives any sums payable under any of the Loan
Documents is not subject to withholding or is subject to withholding at a
reduced rate.

 

(iv)          The
Administrative Agent may, without reduction, withhold any Taxes required to be
deducted and withheld from any payment under any of the Loan Documents with
respect to which the Borrower is not required to pay additional amounts under
this Section 10.15(a).

 

(b)           Certain Provisions Pertinent to US Lenders.  Upon the request of the Administrative Agent,
each Lender that is a “United States person” within the meaning of Section
7701(a)(30) of the Code shall deliver to the Administrative Agent two duly
signed completed copies of IRS Form W-9. 
If such Lender fails to deliver such forms, then the Administrative
Agent may withhold from any interest payment to such Lender an amount
equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.

 

(c)           Lender Indemnification.  If any Governmental Authority asserts that
the Administrative Agent did not properly withhold or backup withhold, as the
case may be, any tax or other amount from payments made to or for the account
of any Lender and such failure to withhold or backup withhold was directly
caused by such Lender’s failure to comply with Section 10.15(a)(i) or (ii)
hereof, such Lender shall indemnify the Administrative Agent therefor,
including all penalties and interest, any taxes imposed by any jurisdiction on
the amounts payable to the Administrative Agent under this Section, and costs
and expenses (including Attorney Costs) of the Administrative Agent.  The obligation of the Lenders under this
Section shall survive the termination of the Commitments, repayment of all
other Credit Obligations hereunder and the resignation of the Administrative
Agent.

 

Section
10.16  Headings.  The headings of the sections and subsections
hereof are provided for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.

 

Section
10.17  Governing Law; Submission to Jurisdiction.

 

(a)           THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND OTHER
THAN AS EXPRESSLY SET FORTH IN SUCH OTHER LOAN DOCUMENTS) AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.  EACH LETTER OF CREDIT SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES
DESIGNATED IN SUCH LETTER OF CREDIT, OR

 

150

 

IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM
CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL
CHAMBER OF COMMERCE, PUBLICATION NO. 500 AND, AS TO MATTERS NOT GOVERNED BY
SUCH UNIFORM CUSTOMS, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING,
WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 

(b)           Any
legal action or proceeding with respect to this Agreement or any other Loan
Document may be brought in the courts of the State of New York in New York
County, or of the United States for the Southern District of New York, and, by
execution and delivery of this Agreement, each of Holdings and the Borrower
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditional, the nonexclusive jurisdiction of such courts.  Each of Holdings and the Borrower irrevocably
waives, to the fullest extent permitted by Law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such court and any claim that any such proceeding brought in any such court has
been brought in an inconvenient forum.

 

Section
10.18  Waiver of Right to Trial by Jury.  EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO
OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.

 

Section
10.19  USA Patriot Act Notice; Lenders’ Compliance Certification.

 

(a)           Notice to Borrower.  Each Lender and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies Holdings and the
Borrower that pursuant to the requirements of the US Patriot Act it may be
required to obtain, verify and record information that identifies each of
Holdings and the Borrower, which information includes the name and address of
each Loan Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify each such Loan Party in
accordance with the Act.

 

(b)           Lenders’ Certification.  Each Lender or assignee or participant of a
Lender that is not incorporated under the Laws of the United States or a State
thereof (and is not excepted from the certification requirement contained in
Section 313 of the U.S. Patriot Act and the applicable regulations because it
is both (i) an Affiliate of a depository institution or foreign bank that
maintains a physical presence in the United States or foreign country and (ii)
subject to supervision by a banking regulatory authority regulating such
affiliated depository institution or foreign bank) shall deliver to the
Administrative Agent the certification or, if applicable, recertification,
certifying that such Lender is not a “shell” and certifying to other matters as
required by Section 313 of the U.S. Patriot Act and the applicable regulations
thereunder: (i) within 10 days after the Closing Date or, if later, the date
such Lender, assignee or participant of a Lender becomes a Lender, assignee or
participant of a Lender hereunder and (ii) at such other times as are required
under the U.S. Patriot Act.

 

151

 

Section
10.20  Defaulting Lenders.  Each Lender understands and agrees that if
such Lender is a Defaulting Lender then, notwithstanding the provisions of Section
10.03, it shall not be entitled to vote on any matter requiring the consent
of the Required Lenders or to object to any matter requiring the consent of all
the Lenders adversely affected thereby; provided, however, that
all other benefits and obligations under the Loan Documents shall apply to such
Defaulting Lender, except as provided in Section 2.03(e).

 

Section
10.21  Binding Effect.  This Agreement shall become effective at such
time when it shall have been executed by Holdings, the Borrower, the Collateral
Agents and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together,
bear the signatures of each Lender, and thereafter this Agreement shall be binding
upon and inure to the benefit of Holdings, the Borrower, each Agent and each
Lender and their respective successors and assigns; provided, however,
unless the conditions set forth in Section 4.01 have been satisfied by
the Loan Parties or waived by the Lenders on or before June 30, 2004, none of
Holdings, the Borrower, any Agent or the Lenders shall have any obligations
under this Agreement.

 

Section
10.22  Judgment Currency.

 

(a)           The
obligations of the Loan Parties hereunder and under the other Loan Documents to
make payments in a specified currency (the “Obligation Currency”) shall
not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the
effective receipt by a Finance Party of the full amount of the Obligation
Currency expressed to be payable to it under this Agreement or another Loan
Document.  If, for the purpose of
obtaining or enforcing judgment against any Loan Party in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to
as the “Judgment Currency”) an amount due in the Obligation Currency,
the conversion shall be made, at the rate of exchange (as quoted by the
Administrative Agent or if the Administrative Agent does not quote a rate of
exchange on such currency, by a known dealer in such currency designated by the
Administrative Agent) determined, in each case, as of the Business Day
immediately preceding the date on which the judgment is given (such Business
Day being hereinafter referred to as the “Judgment Currency Conversion Date”).

 

(b)           If
there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due, the
Borrower covenants and agrees to pay, or cause to be paid, or remit, or cause
to be remitted, such additional amounts, if any (but in any event not a lesser
amount), as may be necessary to ensure that the amount paid in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.

 

(c)           For
purposes of determining any rate of exchange or currency equivalent for this Section
10.23, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.

 

Section
10.23  Conflict.  To the extent that there is a conflict or
inconsistency between any provision hereof, on the one hand, and any provision
of any other Loan Document, on the other hand, this Agreement shall control.

 

152

 

[Signature Pages Follow]

 

153

 

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

 

 

	
   

  	
  VERIFONE INTERMEDIATE HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald C. Campion

  	
   

  
	
   

  	
   

  	
  Name: Donald C. Campion

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VERIFONE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald C. Campion

  	
   

  
	
   

  	
   

  	
  Name: Donald C. Campion

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  

 

 

	
   

  	
  BANK OF AMERICA, N.A.,

  as L/C Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Thomas Barnett

  	
   

  
	
   

  	
   

  	
  Name: W. Thomas Barnett

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  as Swing Line Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Thomas Barnett

  	
   

  
	
   

  	
   

  	
  Name: W. Thomas Barnett

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Thomas Barnett

  	
   

  
	
   

  	
   

  	
  Name: W. Thomas Barnett

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  as Senior Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Thomas Barnett

  	
   

  
	
   

  	
   

  	
  Name: W. Thomas Barnett

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  as Second Lien Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Thomas Barnett

  	
   

  
	
   

  	
   

  	
  Name: W. Thomas Barnett

  
	
   

  	
   

  	
  Title: Managing Director

  

 

S-2

 

	
   

  	
  CREDIT SUISSE FIRST BOSTON, acting through

  its Cayman Islands Branch, as Syndication Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Hetu

  	
   

  
	
   

  	
   

  	
  Name: Robert Hetu

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vanessa Gomez

  	
   

  
	
   

  	
   

  	
  Name: Vanessa Gomez

  
	
   

  	
   

  	
  Title: Associate

  

 

S-3

 

	
   

  	
  WELLS FARGO BANK, N.A.,

  as Documentation Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason W. Weighter

  	
   

  
	
   

  	
   

  	
  Name: Jason W. Weighter

  
	
   

  	
   

  	
  Title: Vice President

  

 

S-4

 

	
   

  	
  WELLS FARGO BANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jason W. Weighter

  	
   

  
	
   

  	
   

  	
  Name: Jason W. Weighter

  
	
   

  	
   

  	
  Title: Vice President

  

 

S-5Exhibit 10.10

 

SECURITY AGREEMENT

 

dated as of June
30, 2004

 

among

 

THE LOAN PARTIES
FROM TIME TO TIME PARTY HERETO

 

and

 

BANK OF AMERICA,
N.A.,

as Senior Collateral Agent

 

 

TABLE
OF CONTENTS*

 

	
   

  	
   

  	
  ARTICLE I

  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section
  1.01

  	
   

  	
  Terms Defined in the Credit Agreement

  	
   

  
	
  Section
  1.02

  	
   

  	
  Terms Defined in the UCC

  	
   

  
	
  Section
  1.03

  	
   

  	
  Additional Definitions

  	
   

  
	
  Section
  1.04

  	
   

  	
  Terms Generally

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE II

  SECURITY INTERESTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section
  2.01

  	
   

  	
  Grant of Security Interests

  	
   

  
	
  Section
  2.02

  	
   

  	
  Collateral

  	
   

  
	
  Section
  2.03

  	
   

  	
  Continuing Liability of Each Loan Party

  	
   

  
	
  Section
  2.04

  	
   

  	
  Security Interests Absolute

  	
   

  
	
  Section
  2.05

  	
   

  	
  Segregation of Proceeds; Cash Proceeds
  Account

  	
   

  
	
  Section
  2.06

  	
   

  	
  Reinvestment Funds Account

  	
   

  
	
  Section
  2.07

  	
   

  	
  L/C Cash Collateral Account

  	
   

  
	
  Section
  2.08

  	
   

  	
  Prepayment Account

  	
   

  
	
  Section
  2.09

  	
   

  	
  Investment of Funds in Collateral Accounts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE III

  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section
  3.01

  	
   

  	
  Title to Collateral

  	
   

  
	
  Section
  3.02

  	
   

  	
  Validity, Perfection and Priority of
  Security Interests

  	
   

  
	
  Section
  3.03

  	
   

  	
  Fair Labor Standards Act

  	
   

  
	
  Section
  3.04

  	
   

  	
  No Consents

  	
   

  
	
  Section
  3.05

  	
   

  	
  Deposit and Securities Accounts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE IV

  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section
  4.01

  	
   

  	
  Delivery of Perfection Certificate; Initial
  Perfection and Delivery of Search Reports

  	
   

  
	
  Section
  4.02

  	
   

  	
  Change of Name, Organizational Structure or
  Location; Subjection to Other Security Agreements

  	
   

  
	
  Section
  4.03

  	
   

  	
  Further Actions

  	
   

  
	
  Section
  4.04

  	
   

  	
  Collateral in Possession of Other Persons

  	
   

  
	
  Section
  4.05

  	
   

  	
  Books and Records

  	
   

  
	
  Section
  4.06

  	
   

  	
  Delivery of Instruments, Etc

  	
   

  
	
  Section
  4.07

  	
   

  	
  Notification to Account Debtors

  	
   

  
	
  Section
  4.08

  	
   

  	
  Disposition of Collateral

  	
   

  
	
  Section
  4.09

  	
   

  	
  Insurance

  	
   

  

 

*              Table of Contents is not a part of
the Security Agreement.

i

 

	
  Section
  4.10

  	
   

  	
  Information Regarding Collateral

  	
   

  
	
  Section
  4.11

  	
   

  	
  Covenants Regarding Intellectual Property

  	
   

  
	
  Section
  4.12

  	
   

  	
  Deposit Accounts and Securities Accounts

  	
   

  
	
  Section
  4.13

  	
   

  	
  Electronic Chattel Paper

  	
   

  
	
  Section
  4.14

  	
   

  	
  Claims

  	
   

  
	
  Section
  4.15

  	
   

  	
  Letter-of-Credit-Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE V

  GENERAL AUTHORITY; REMEDIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section
  5.01

  	
   

  	
  General Authority

  	
   

  
	
  Section
  5.02

  	
   

  	
  Authority of the Senior Collateral Agent

  	
   

  
	
  Section
  5.03

  	
   

  	
  Remedies upon Event of Default

  	
   

  
	
  Section 5.04

  	
   

  	
  Limitation on Duty of the Senior Collateral
  Agent in Respect of Collateral

  	
   

  
	
  Section 5.05

  	
   

  	
  Application of Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VI

  SENIOR COLLATERAL AGENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01

  	
   

  	
  Concerning the Senior Collateral Agent

  	
   

  
	
  Section 6.02

  	
   

  	
  Appointment of Co-Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ARTICLE VII

  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01

  	
   

  	
  Notices

  	
   

  
	
  Section 7.02

  	
   

  	
  No Waivers; Non-Exclusive Remedies

  	
   

  
	
  Section 7.03

  	
   

  	
  Compensation and Expenses of the Senior
  Collateral Agent; Indemnification

  	
   

  
	
  Section 7.04

  	
   

  	
  Enforcement

  	
   

  
	
  Section 7.05

  	
   

  	
  Amendments and Waivers

  	
   

  
	
  Section 7.06

  	
   

  	
  Successors and Assigns

  	
   

  
	
  Section 7.07

  	
   

  	
  Governing Law

  	
   

  
	
  Section 7.08

  	
   

  	
  Limitation of Law; Severability

  	
   

  
	
  Section 7.09

  	
   

  	
  Counterparts; Effectiveness

  	
   

  
	
  Section 7.10

  	
   

  	
  Additional Loan Parties

  	
   

  
	
  Section 7.11

  	
   

  	
  Termination

  	
   

  
	
  Section 7.12

  	
   

  	
  Entire Agreement

  	
   

  

 

ii

 

	
  Schedules:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule
  1.01

  	
  -

  	
  Claims

  	
   

  
	
  Schedule
  3.05

  	
  -

  	
  Deposit Accounts and Securities Accounts

  	
   

  
	
  Schedule
  4.01

  	
  -

  	
  Filings to Perfect Security Interests of
  Senior Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibits:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Grant of Security Interest in
  United States Patents and Trademarks

  	
   

  
	
  Exhibit B

  	
  -

  	
  Form of Grant of Security Interest in
  United States Copyrights

  	
   

  
	
  Exhibit C

  	
  -

  	
  Form of Deposit Account Control Agreement

  	
   

  
	
  Exhibit D

  	
  -

  	
  Form of Consent to Assignment of Letter of
  Credit Proceeds

  	
   

  
	
  Exhibit E

  	
  -

  	
  Form of Collateral Description

  	
   

  

 

iii

 

SECURITY
AGREEMENT dated as of June 30, 2004 (as amended,
modified or supplemented from time to time, this “Agreement”) among the
LOAN PARTIES from time to time party hereto and BANK OF AMERICA, N.A., as
collateral agent for the Senior Finance Parties (in such capacity, together
with its successors, the “Senior Collateral Agent”).

 

VeriFone, Inc., a Delaware corporation (together with its successors
and permitted assigns, the “Borrower”), proposes to enter into a Credit
Agreement dated as of June 30, 2004 (as amended, restated, modified or
supplemented from time to time and including any agreement extending the
maturity of, refinancing or otherwise restructuring all or any portion of the
obligations of the Borrower under such agreement or any successor agreement,
the “Credit Agreement”) among VeriFone Intermediate Holdings, Inc., a
Delaware corporation (together with its successors and permitted assigns, “Holdings”),
the Borrower, the banks and other lending institutions from time to time party
thereto (each a “Lender” and, collectively, the “Lenders”), the
Collateral Agents (as defined below), Bank of America, N.A., as Administrative
Agent, L/C Issuer and Swing Line Lender (together with its successor or
successors in each such capacity, the “Administrative Agent”, an “L/C
Issuer” and the “Swing Line Lender”, respectively), and Credit
Suisse First Boston, Cayman Islands Branch, as Syndication Agent (together with
its successor or successors in such capacity, the “Syndication Agent”).

 

Certain Lenders and their affiliates acting as Swap Creditors (as
defined in the Credit Agreement) may from time to time provide forward rate
agreements, options, swaps, caps, floors and other Swap Agreements (as defined
in the Credit Agreement) to the Loan Parties (as defined below).  To induce the Lenders to enter into the
Credit Agreement and the other Loan Documents (as hereinafter defined) and the
Swap Creditors to enter into the Swap Agreements, and as a condition precedent
to the obligations of the Senior Lenders under the Credit Agreement, VeriFone
Holdings, Inc. (together with its successors and permitted assigns, “Parent
Holdings”), Holdings and certain of the Subsidiaries of Holdings (each a “Guarantor”
and, collectively, the “Guarantors”) have agreed, jointly and severally,
to provide a guaranty of all obligations of the Borrower and the other Loan
Parties under or in respect of the Finance Documents.

 

As a further condition precedent to the obligations of the Lenders
under the Loan Documents, the Borrower and each Guarantor (each a “Loan
Party” and, together with each other person that becomes a party hereto
pursuant to Section 7.10 hereof and the respective successors and
permitted assigns of each of the foregoing, the “Loan Parties”) has
agreed or will agree to grant a continuing security interest in favor of the
Senior Collateral Agent in and to the Collateral (as hereinafter defined) to
secure the Senior Obligations (as hereinafter defined).  Accordingly, the parties hereto agree as
follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.01         Terms Defined in the Credit Agreement.  Capitalized terms defined in the Credit
Agreement and not otherwise defined herein have, as used herein, the respective
meanings provided for therein.

 

Section 1.02         Terms Defined in the UCC.  Unless otherwise defined herein or in the
Credit Agreement or the context otherwise requires, the following terms,
together with any uncapitalized terms used herein which are defined in the UCC
(as defined below), have the respective meanings provided in the UCC:  (i) As-Extracted Collateral; (ii)
Certificated Security; (iii) Chattel Paper; (iv) Documents; (v) Financial
Asset; (vi) Instruments; (vii) Inventory; (viii) Investment Property; (ix) 

 

 

Payment
Intangibles; (x) Proceeds; (xi) Securities Account; (xii) Securities
Intermediary; (xiii) Security; (xiv) Security Certificate; (xv) Security
Entitlements; and (xvi) Uncertificated Security.

 

Section 1.03         Additional Definitions.  Terms defined in the introductory section
hereof have the respective meanings set forth therein.  The following additional terms, as used
herein, have the following respective meanings:

 

“Account Control Agreement” means (i) with respect to a Deposit
Account, a deposit account control agreement, substantially in the form of Exhibit
C hereto or otherwise containing substantially similar terms and reasonably
acceptable in form and substance to the Senior Collateral Agent, among one or
more Loan Parties, the Senior Collateral Agent, the Second Lien Collateral
Agent and the bank which maintains such Deposit Account (execution of such
agreement shall be conclusive evidence of such approval) and (ii) with respect
to a Securities Account, a securities account control agreement, substantially
in the form of Exhibit B to the Senior Pledge Agreement or otherwise
containing substantially similar terms and reasonably acceptable in form and
substance to the Senior Collateral Agent, among one or more Loan Parties, the
Senior Collateral Agent, the Second Lien Collateral Agent and the Securities
Intermediary which maintains such Securities Account (execution of such
agreement shall be conclusive evidence of such approval), in each case as the
same may be amended, modified or supplemented from time to time.

 

“Accounts” means (i) all “accounts” (as defined in the UCC),
(ii) all of the rights of any Loan Party in, to and under all purchase orders
for goods, services or other property, (iii) all of the rights of any Loan
Party to any goods, services or other property represented by any of the
foregoing (including returned or repossessed goods and unpaid seller’s rights
of rescission, replevin, reclamation and rights to stoppage in transit) and
(iv) all monies due to or to become due to any Loan Party under any and all
contracts for any of the foregoing (in each case, whether or not yet earned by
performance on the part of such Loan Party), including, without limitation, the
right to receive the Proceeds of said purchase orders and contracts, all
Supporting Obligations of any kind given by any Person with respect to all or
any of the foregoing.

 

“Account Debtor” means an “account debtor” (as defined in the
UCC), and also means and includes Persons obligated to pay negotiable
instruments and other Receivables.

 

“Cash Management Obligation” means, as applied to any Person,
any direct or indirect liability, contingent or otherwise, of such Person in
respect of cash management services (including treasury, depository, overdraft,
credit or debit card, electronic funds transfer and other cash management
arrangements) provided by any Lender or its Affiliates in connection with this
any Loan Document, including obligations for the payment of agreed interest and
fees, charges, expenses, Attorney Costs and disbursements in connection
therewith.

 

“Cash Proceeds Account” has the meaning set forth in Section
2.05(a) of this Agreement.

 

“Claims” means all “commercial tort claims” (as defined in the
UCC), including, without limitation, each of the claims described on Schedule
1.01 hereto, as such Schedule may be amended, modified or supplemented from
time to time, and also means and includes all claims, causes of action and
similar rights and interests (however characterized) of a Loan Party, whether
arising in contract, tort or otherwise, and whether or not subject to any
action, suit, investigation or legal, equitable, arbitration or administrative
proceedings.

 

“Collateral” has the meaning set forth in Section 2.02 of
this Agreement.

 

2

 

“Collateral Accounts” means one or more of the Cash Proceeds
Account, the L/C Cash Collateral Account, the Reinvestment Funds Account, the
Prepayment Account and any other Securities Accounts or Deposit Accounts
established with or in the possession or under the control of the Senior
Collateral Agent into which cash or cash Proceeds (including cash Proceeds of
insurance policies, awards of condemnation or other compensation) of any
Collateral are deposited from time to time, collectively.

 

“Collateral Agents” means the Senior Collateral Agent and the
Second Lien Collateral Agent, collectively.

 

“Computer Hardware” means all computer and other electronic data
processing hardware of a Loan Party, whether now or hereafter owned, licensed
or leased by such Loan Party, including, without limitation, all integrated
computer systems, central processing units, memory units, display terminals,
printers, features, computer elements, card readers, tape drives, hard and soft
disk drives, cables, electrical supply hardware, generators, power equalizers,
accessories, peripheral devices and other related computer hardware, all
documentation, flowcharts, logic diagrams, manuals, specifications, training
materials, charts and pseudo codes associated with any of the foregoing and all
options, warranties, services contracts, program services, test rights,
maintenance rights, support rights, renewal rights and indemnifications
relating to any of the foregoing.

 

“Copyright” means any of the following, whether now existing or
hereafter arising, created, owned or acquired by a Loan Party:

 

(i)            the United States and foreign
copyrights described on Schedule V to any Loan Party’s Perfection
Certificate (as each such schedule may be amended, modified or supplemented
from time to time) and any renewals thereof;

 

(ii)           all other common Law and/or statutory
rights in all copyrightable subject matter under the Laws of the United States
or any other country (whether or not the underlying works of authorship have
been published);

 

(iii)          all registrations and applications for
registration of any such copyright in the United States or any other country,
including registrations, recordings, supplemental, derivative or collective
work registrations and pending applications for registrations in the United
States Copyright Office or any other country;

 

(iv)          all computer programs, web pages,
computer data bases and computer program flow diagrams, including all source
codes and object codes related to any or all of the foregoing;

 

(v)           all tangible property embodying or
incorporating any or all of the foregoing, whether in completed form or in some
lesser state of completion, and all masters, duplicates, drafts, versions,
variations and copies thereof, in all formats;

 

(vi)          all claims for, and rights to sue for,
past, present and future infringement of any of the foregoing;

 

(vii)         all income, royalties, damages and
payments now or hereafter due or payable with respect to any of the foregoing,
including, without limitation, damages and payments for past, present or future
infringements thereof and payments and damages under all Copyright Licenses in
connection therewith;

 

3

 

(viii)        all rights in any of the foregoing,
whether arising under the Laws of the United States or any foreign country or
otherwise, to copy, record, synchronize, broadcast, transmit, perform and/or
display any of the foregoing or any matter which is the subject of any of the
foregoing in any manner and by any process now known or hereafter devised; and

 

(ix)           the name and title of each Copyright
item and all rights of any Loan Party to the use thereof, including, without
limitation, rights protected pursuant to trademark, service mark, unfair
competition, anti-cybersquatting and/or the rules and principles of any other
applicable statute, common Law or other rule or principle of Law now existing
or hereafter arising.

 

“Copyright Agreement” means a grant of Security Interest in
United States Copyrights, substantially in the form of Exhibit B to this
Agreement, between one or more Loan Parties and the Senior Collateral Agent, as
the same may be amended, modified or supplemented from time to time.

 

“Copyright License” means any agreement now or hereafter in
existence granting to any Loan Party any rights, whether exclusive or
non-exclusive, to use another Person’s copyrights or copyright applications, or
pursuant to which any Loan Party has granted to any other Person, any right,
whether exclusive or non-exclusive, with respect to any Copyright, whether or
not registered, including, without limitation, the Copyright Licenses described
on Schedule V to any Loan Party’s Perfection Certificate (as each such
schedule may be amended, modified or supplemented from time to time by such
Loan Party).

 

“Credit Obligations” means on any date the Senior Credit Obligations
and the Second Lien Obligations.

 

“Deposit Accounts” means all “deposit accounts” (as defined in
the UCC) and also means and includes all demand, time, savings, passbook or
similar accounts maintained by a Loan Party with a bank or other financial
institution, whether or not evidenced by an Instrument, all cash and other
funds held therein and all passbooks related thereto and all certificates and
Instruments, if any, from time to time representing, evidencing or deposited
into such deposit accounts.

 

“Direct Exposure” has the meaning set forth in Section 2.07
of this Agreement.

 

“Domestic Subsidiary” means with respect to any Person each
Subsidiary of such Person which is organized under the Laws of the United
States or any political subdivision or territory thereof, and “Domestic
Subsidiaries” means any two or more of them.

 

“Equipment” means all “equipment” (as defined in the UCC),
including all items of machinery, equipment, Computer Hardware, furnishings and
fixtures of every kind, as well as all motor vehicles, automobiles, trucks,
trailers, railcars, barges and vehicles of every description, handling and
delivery equipment, all additions to, substitutions for, replacements of or
accessions to any of the foregoing, all attachments, components, parts
(including spare parts) and accessories whether installed thereon or affixed
thereto and all fuel for any thereof and all options, warranties, service
contracts, program services, test rights, maintenance rights, support rights,
improvement rights and indemnifications relating to any of the foregoing.

 

“Event of Default” means one or more Events of Default, as such
term is defined in the Credit Agreement.

 

4

 

“Excluded Contract” means at any date any rights or interest of
a Loan Party in, to or under any agreement, contract, license, instrument,
document or other general intangible (referred to solely for purposes of this
definition as a “Contract”) to the extent that such Contract by the
express terms of a valid and enforceable restriction in favor of a Person who
is not a Group Company, (i) prohibits, or requires any consent or establishes
any other condition for, an assignment thereof or a grant of a security
interest therein by a Loan Party, (ii) would give any party to such Contract
other than a Group Company an enforceable right to terminate its obligations
thereunder or (iii) is permitted only with the consent of another Person, if
the requirement to obtain such consent is legally enforceable and such consent
has not been obtained; provided that (i) in the case of each such
Contract in existence or the subject of rights in favor of a Loan Party as of
the Closing Date the contravention or violation of which could reasonably be
expected to have a Material Adverse Effect, such Contract is listed and
designated as such on Schedule 5.03 to the Credit Agreement; (ii) rights
to payment under any such Contract otherwise constituting an Excluded Contract
by virtue of this definition shall be included in the Collateral to the extent
permitted thereby or by Section 9-406 or Section 9-408 of the UCC, (iii) all
Proceeds paid or payable to any Loan Party from any sale, transfer or
assignment of such Contract and all rights to receive such Proceeds shall be
included in the Collateral and (iv) the term “Excluded Contract” shall
not include any rights or interest of a Loan Party in, to or under any Contract
arising after the Closing Date which is material to the conduct of the business
of a Loan Party or with respect to which a contravention or other violation
caused or arising by its inclusion as Collateral under this Agreement could
reasonably be expected to have a Material Adverse Effect unless (A) the Loan
Party shall have used, or shall be using, commercially reasonable efforts to
obtain all requisite consents or approvals by the other party to such Contract
of all of such Loan Party’s right, title and interest thereunder to the
Collateral Agents or their respective designees and (B) the Loan Party shall
have given prompt written notice to the Senior Collateral Agent upon any
failure to obtain such consent or approval.

 

“Excluded Equipment” means at any date any Equipment of a Loan
Party which is subject to, or secured by, a Capital Lease Obligation or
Purchase Money Indebtedness which is permitted under Section 7.01 of the
Credit Agreement if and to the extent that (i) the express terms of a valid and
enforceable restriction in favor of a Person who is not a Group Company
contained in the agreements or documents granting or governing such Capital
Lease Obligation or Purchase Money Indebtedness prohibits, or requires any
consent or establishes any other conditions for, an assignment thereof, or a
grant of a security interest therein, by a Loan Party and (ii) such restriction
relates only to the asset or assets acquired by a Loan Party with the Proceeds
of such Capital Lease Obligation or Purchase Money Indebtedness; provided
that all Proceeds paid or payable to any Loan Party from any sale, transfer or
assignment or other voluntary or involuntary disposition of such Equipment and
all rights to receive such Proceeds shall be included in the Collateral to the
extent not otherwise required to be paid to the holder of the Capital Lease
Obligation or Purchase Money Indebtedness secured by such Equipment.

 

“Exempt Deposit Accounts” means (i) Deposit Accounts the balance
of which consists exclusively of (A) withheld income taxes and federal, state
or local employment taxes in such amounts as are required in the reasonable
judgment of the Borrower to be paid to the Internal Revenue Service or state or
local government agencies within the following two months with respect to
employees of any of the Loan Parties, (B) amounts required to be paid over to
an employee benefit plan pursuant to DOL Reg. Sec. 2510.3-102 on behalf of or
for the benefit of employees of one or more Loan Parties and (C) petty cash in
an amount not exceeding, at any point in time, $250,000 per Deposit Account,
and (ii) all segregated Deposit Accounts constituting (and the balance of which
consists solely of funds set aside in connection with) taxes accounts, payroll
accounts and trust accounts.

 

“Finance Document” means each Loan Document and each Swap
Agreement between one or more Loan Parties and a Swap Creditor evidencing Swap
Obligations permitted under the Credit Agreement, and “Finance Documents”
means all of them, collectively.

 

5

 

“Finance Obligations” means:

 

(i)            all Senior Credit Obligations;

 

(ii)           all Second Lien Obligations;

 

(iii)          all Cash Management Obligations owed
to a Senior Lender or one or more of its Affiliates; and

 

(iv)          all Swap Obligations permitted under
the Credit Agreement owed or owing to any Swap Creditor;

 

in each case whether now or hereafter due, owing or incurred in any
manner, whether actual or contingent, whether incurred solely or jointly with
any other Person and whether as principal or surety (and including all
liabilities in connection with any notes, bills or other instruments accepted
by any Finance Party in connection therewith), together in each case with all
renewals, modifications, consolidations or extensions thereof.

 

“Foreign Subsidiary” means with respect to any Person, any
Subsidiary of such Person that is not a Domestic Subsidiary of such Person.

 

“General Intangibles” means all “general intangibles” (as
defined in the UCC) and also means and includes (i) all Payment Intangibles and
other obligations and indebtedness owing to any Loan Party (other than
Accounts), from whatever source arising, (ii) all Claims, Judgments and/or
Settlements, (iii) all rights or claims in respect of refunds for taxes paid,
(iv) all rights in respect of any pension plans or similar arrangements
maintained for employees of any Loan Party or any member of the ERISA Group,
(v) all interests in limited liability companies and/or partnerships which
interests do not constitute Securities and (vi) all Supporting Obligations of
any kind given by any Person with respect to all or any of the foregoing.

 

“Intellectual Property” means all Patents, Trademarks,
Copyrights, Software, Licenses, rights in intellectual property, goodwill,
trade names, service marks, trade secrets, confidential or proprietary
technical and business information, know-how, trademark rights arising out of
domain names, mask works, customer lists, vendor lists, subscription lists,
databases and related documentation, registrations, franchises and all other
intellectual or other similar property rights.

 

“Intercreditor Agreement” means the Intercreditor Agreement
dated as of the date hereof among the Administrative Agent, the Senior
Collateral Agent, the Second Lien Collateral Agent, Holdings, Parent Holdings
and the Borrower, as the same may be amended, modified or supplemented from time
to time.

 

“Judgments” means all judgments, decrees, verdicts, decisions or
orders issued in resolution of or otherwise in connection with a Claim, whether
or not final or subject to appeal, and including all rights of enforcement
relating thereto and any and all Proceeds thereof.

 

“Letter-of-Credit Right” means all “letter-of-credit rights” (as
defined in the UCC) and also means and includes all rights of a Loan Party to
demand payment or performance under a letter of credit (as defined in Article V
of the UCC).

 

“License” means any Patent License, Trademark License, Copyright
License, Software License or other license or sublicense as to which any Loan
Party is a party (other than those license 

 

6

 

agreements constituting Excluded Contracts; provided
that rights to payments under any such license shall be included in the
Collateral to the extent permitted thereby or by Section 9-406 and 9-408 of the
UCC).

 

“Liquid Investments” has the meaning set forth in Section
2.09 of this Agreement.

 

“L/C Cash Collateral Account” has the meaning set forth in Section
2.07 of this Agreement.

 

“Loan Party” means Holdings, Parent Holdings, the Borrower and
each Guarantor, and “Loan Parties” means all of them, collectively.

 

“paid in full” and “payment in full”
means, with respect to any Finance Obligation, the occurrence of all of the
foregoing:  (i) with respect to such
Finance Obligations other than (A) contingent indemnification obligations, Swap
Obligations and Cash Management Obligations not then due and payable and (B) to
the extent covered by clause (ii) below, obligations with respect to undrawn
Letters of Credit, payment in full thereof in cash (or otherwise to the written
satisfaction of the Finance Parties owed such Finance Obligations), (ii) with
respect to any undrawn Letter of Credit, the obligations under which are
included in such Finance Obligations, (A) the cancellation thereof and payment
in full of all resulting Finance Obligations pursuant to clause (i) above or
(B) the receipt of cash collateral (or a backstop letter of credit in respect
thereof on terms acceptable to the applicable L/C Issuer and the Administrative
Agent) in an amount at least equal to 102% of the L/C Obligations for such
Letter of Credit and (iii) if such Finance Obligations consist of all the
Credit Obligations under or in respect of the Revolving Commitments, the Term B
Commitments or the Second Lien Commitments, termination of all Commitments and
all other obligations of the Lenders in respect of such Commitments under the
Loan Documents.

 

“Patent” means any of the following, whether
now existing or hereafter arising, invented, developed, reduced to practice,
acquired or owned by a Loan Party:

 

(i)            the United States and foreign
patents described on Schedule V to any Loan Party’s Perfection
Certificate (as each such schedule may be amended, modified or supplemented
from time to time by such Loan Party) and any renewals thereof;

 

(ii)           all other letters patent and design
letters patent of the United States or any other country;

 

(iii)          all applications filed or in
preparation for filing for letters patent and design letters patent of the
United States or any other country including, without limitation, applications
in the United States Patent and Trademark Office or in any similar office or
agency of the United States or any other country or political subdivision
thereof;

 

(iv)          all reissues, divisions,
continuations, continuations-in-part, revisions, renewals or extensions
thereof;

 

(v)           all claims for, and rights to sue
for, past, present or future infringement of any of the foregoing;

 

(vi)          all income, royalties, damages and
payments now or hereafter due or payable with respect to any of the foregoing,
including, without limitation, damages and 

 

7

 

payments for past, present or future
infringements thereof and payments and damages under all Patent Licenses in
connection therewith; and

 

(vii)         all rights corresponding to any of the
foregoing whether arising under the Laws of the United States or any foreign
country or otherwise.

 

“Patent and Trademark Agreement” means a grant of Security
Interest in United States Patents and Trademarks, substantially in the form of Exhibit
A to this Agreement, between one or more Loan Parties and the Senior
Collateral Agent, as the same may be amended, modified or supplemented from
time to time.

 

“Patent License” means any agreement now or hereafter in
existence granting to any Loan Party any right, whether exclusive or
non-exclusive, with respect to any Person’s patent or any invention now or
hereafter in existence, whether or not patentable, or pursuant to which any
Loan Party has granted to any other Person, any right, whether exclusive or
non-exclusive, with respect to any Patent or any invention now or hereafter in
existence, whether or not patentable and whether or not a Patent or application
for Patent is in or hereafter comes into existence on such invention,
including, without limitation, the Patent Licenses described on Schedule V
to any Loan Party’s Perfection Certificate (as each such schedule may be
amended, modified or supplemented from time to time by such Loan Party).

 

“Perfection Certificate” means with respect to each Loan Party a
certificate, substantially in the form of Exhibit G-3 to the Credit
Agreement, completed and supplemented with the schedules and attachments
contemplated thereby.

 

“Permitted Lien” means the Lien in favor of the Second Lien
Collateral Agent securing the payment and performance of the Second Lien
Obligations and any other Lien referred to in, and permitted by, Section
7.02 of the Credit Agreement.

 

“Prepayment Account” has the meaning set forth in Section
2.08 of this Agreement.

 

“Receivables” means all Accounts, all Payment Intangibles, all
Instruments, all Chattel Paper, all Letter-of-Credit Rights and all Supporting
Obligations supporting or otherwise relating to any of the foregoing.

 

“Recordable Intellectual Property” means Intellectual Property
the transfer of which is required to be recorded in the United States Patent
and Trademark Office or the United States Copyright Office in order to be
effective against subsequent third party transferees; provided that the
following are not “Recordable Intellectual Property” hereunder:  (i) unregistered United States Copyrights and
(ii) non-exclusive Licenses.

 

“Reinvestment Funds” has the meaning set forth in Section
2.06(a) of this Agreement.

 

“Reinvestment Funds Account” has the meaning set forth in Section
2.06(a) of this Agreement.

 

“Relevant Contingent Exposure” has the meaning set forth in Section
2.07 of this Agreement.

 

“Requisite Priority Lien” means a valid and perfected first
priority security interest in favor of the Senior Collateral Agent for the
benefit of the Senior Finance Parties and securing the Senior Obligations.

 

8

 

“Second Lien Collateral Agent” means Bank of America, N.A., in
its capacity as collateral agent for the Second Lien Lenders under the Credit
Agreement and the Collateral Documents, and its permitted successor or
successors in such capacity and, if there is no acting Second Lien Collateral
Agent under the Credit Agreement and the Collateral Documents, the Required
Second Lien Lenders.

 

“Second Lien Credit Party” means each Second Lien Lender, the
Second Lien Collateral Agent and each Indemnitee in respect of Second Lien
Loans and their respective successors and assigns, and “Second Lien Credit
Parties” means any two or more of them, collectively.

 

“Second Lien Lenders” has the meaning set forth in the Credit
Agreement.

 

“Second Lien Obligations” means, with respect
to each Loan Party, without duplication:

 

(i)            in the case of the Borrower, all
principal of and interest (including, without limitation, any interest which
accrues after the commencement of any proceeding under any Debtor Relief Law
with respect to the Borrower to the extent allowed or allowable as a claim in
any such proceeding) on any Second Lien Loan under, or any Second Lien Note
issued pursuant to, the Credit Agreement or any other Loan Document;

 

(ii)           all fees, expenses, indemnification
obligations and other amounts of whatever nature now or hereafter payable by
such Loan Party in respect of any Second Lien Loan (including, without
limitation, any amounts which accrue after the commencement of any proceeding
under any Debtor Relief Law with respect to such Loan Party to the extent
allowed or allowable as a claim in any such proceeding) pursuant to the Credit
Agreement or any other Loan Document;

 

(iii)          all expenses of the Second Lien
Collateral Agent as to which the Second Lien Collateral Agent has a right to
reimbursement by such Loan Party under Section 10.04 of the Credit
Agreement or under any other similar provision of any other Loan Document, including,
without limitation, any and all sums advanced by the Second Lien Collateral
Agent to preserve the Collateral or preserve its security interests in the
Collateral to the extent permitted under any Loan Document or applicable Law;

 

(iv)          all amounts paid by any Indemnitee in
respect of any Second Lien Loan as to which such Indemnitee has the right to
reimbursement by such Loan Party under Section 10.05 of the Credit
Agreement or under any other similar provision of any other Loan Document; and

 

(v)           in the case of Holdings, Parent
Holdings and each Subsidiary Guarantor, all amounts now or hereafter payable by
Holdings, Parent Holdings or such Subsidiary Guarantor and all other
obligations or liabilities now existing or hereafter arising or incurred (including,
without limitation, any amounts which accrue after the commencement of any
proceeding under any Debtor Relief Law with respect to the Borrower, Holdings,
Parent Holdings or such Subsidiary Guarantor to the extent allowed or allowable
as a claim in any such proceeding) on the part of Holdings, Parent Holdings or
such Subsidiary Guarantor under or in respect of the Second Lien Loans pursuant
to the Credit Agreement, the Guaranty or any other Loan Document;

 

together in each case with all renewals, modifications,
consolidations or extensions thereof.

 

“Second Lien Security Agreement” means the Security Agreement,
substantially in the form of Exhibit G-1B to the Credit Agreement dated
as of the date hereof among Holdings, Parent 

 

9

 

Holdings, the Borrower, the Subsidiary
Guarantors and the Second Lien Collateral Agent, as the same may be amended,
modified or supplemented from time to time.

 

“Security Interest” means the security interest granted pursuant
to Section 2.01 hereof in favor of the Senior Collateral Agent for the
benefit of the Senior Finance Parties securing the Senior Obligations.

 

“Senior Collateral Agent” means Bank of America, N.A., in its
capacity as collateral agent for the Senior Finance Parties under the Senior
Finance Documents, and its permitted successor or successors in such capacity
and, if there is no acting Senior Collateral Agent under the Senior Finance
Documents, the Required Senior Lenders.

 

“Senior Credit Obligations” means:

 

(i)            in the case of the Borrower, all
principal of and interest (including, without limitation, any interest which
accrues after the commencement of any proceeding under any Debtor Relief Law
with respect to the Borrower, whether or not allowed or allowable as a claim in
any such proceeding) on any Revolving Loan, Term B Loan or L/C Obligation
under, or any Revolving Note, Term B Note or Swingline Note issued pursuant to,
the Credit Agreement or any other Loan Document;

 

(ii)           all fees, expenses, indemnification
obligations and other amounts of whatever nature now or hereafter payable by
such Loan Party in respect of any Revolving Loan, Term B Loan or L/C Obligation
under, or any Revolving Note, Term B Note or Swingline Note issued pursuant to,
the Credit Agreement or any other Loan Document (including, without limitation,
any amounts which accrue after the commencement of any proceeding under any
Debtor Relief Law with respect to such Loan Party, whether or not allowed or
allowable as a claim in any such proceeding) pursuant to the Credit Agreement
or any other Loan Document;

 

(iii)          all expenses of the Administrative
Agent or the Senior Collateral Agent as to which it has a right to
reimbursement under Section 7.03(a) or (b) of this Agreement or
under any other similar provision of any other Loan Document, including,
without limitation, any and all sums advanced by the Senior Collateral Agent to
preserve any Collateral or preserve its security interests in any Collateral;

 

(iv)          all amounts paid by any Indemnitee in
respect of any Revolving Loan, Term B Loan or L/C Obligation under, or any
Revolving Note, Term B Note or Swingline Note issued pursuant to, the Credit
Agreement or any other Loan Document as to which such Indemnitee has the right
to reimbursement by such Loan Party under as to which such Indemnitee has the
right to reimbursement under Section 10.05 of the Credit Agreement or
under any other similar provision of any other Loan Document; and

 

(v)           in the case of Holdings, Parent
Holdings and each Subsidiary Guarantor, all amounts now or hereafter payable by
Holdings, Parent Holdings or such Subsidiary Guarantor and all other
obligations or liabilities now existing or hereafter arising or incurred
(including, without limitation, any amounts which accrue after the commencement
of any proceeding under any Debtor Relief Law with respect to the Borrower,
Holdings, Parent Holdings or such Subsidiary Guarantor under or in respect of
any Revolving Loan, Swing Line Loan, Term B Loan or L/C Obligation under, or
any Revolving Note, Swing Line Note or Term B Note issued pursuant to, the
Credit Agreement or any other Loan Document, whether or not allowed or
allowable as a claim in any such proceeding) on the part of Holdings, Parent
Holdings or such 

 

10

 

Subsidiary Guarantor pursuant to the Credit
Agreement, the Guaranty or any other Loan Document;

 

together in each case with all renewals, modifications, consolidations
or extensions thereof (including by virtue of any Facilities Increase under the
Credit Agreement).

 

“Senior Credit Party” means each Senior Lender
(including any Affiliate in respect of any Cash Management Obligations), each
L/C Issuer, the Administrative Agent, the Senior Collateral Agent and each
Indemnitee in respect of Senior Loans and their respective successors and
permitted assigns, and “Senior Credit Parties” means any two or more of
them, collectively.

 

“Senior Finance Documents” means (i) each Loan
Document, (ii) each Swap Agreement permitted under the Credit Agreement with
one or more Swap Creditors and (iii) each agreement or instrument governing
Cash Management Obligations between any Loan Party and a Senior Lender.

 

“Senior Finance Party” means each Finance Party
other than a Second Lien Credit Party.

 

“Senior Obligations” means, at any date, all
Finance Obligations, other than Second Lien Obligations.

 

“Settlements” means all right, title and interest of a Loan
Party in, to and under any settlement agreement or other agreement executed in
settlement or compromise of any Claim, including all rights to enforce such
agreements and all payments thereunder or arising in connection therewith.

 

“Software” means all “software” (as defined in the UCC), and
also means and includes all software programs, whether now or hereafter owned,
licensed or leased by a Loan Party, designed for use on Computer Hardware,
including, without limitation, all operating system software, utilities and
application programs in whatever form and whether or not embedded in goods, all
source code and object code in magnetic tape, disk or hard copy format or any
other listings whatsoever, all firmware associated with any of the foregoing
all documentation, flowcharts, logic diagrams, manuals, specifications,
training materials, charts and pseudo codes associated with any of the
foregoing, and all options, warranties, services contracts, program services,
test rights, maintenance rights, support rights, renewal rights and
indemnifications relating to any of the foregoing.

 

“Software License” means any agreement (including any agreement
constituting a Copyright License, Patent License and/or Trademark License) now
or hereafter in existence granting to any Loan Party any right, whether
exclusive or non-exclusive, to use another Person’s Software, or pursuant to
which any Loan Party has granted to any other Person, any right, whether
exclusive or non-exclusive, to use any Software, whether or not subject to any
registration.

 

“Supporting Obligation” means a Letter-of-Credit Right, Guaranty
Obligation or other secondary obligation supporting or any Lien securing the
payment or performance of one or more Receivables, General Intangibles,
Documents or Investment Property.

 

“Swap
Agreement” means (i) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement and (ii) 

 

11

 

any and all transactions of any kind, and the related confirmations,
which are subject to the terms and conditions of, or governed by, any form of
master agreement published by the International Swaps and Derivatives
Association, Inc., any International Foreign Exchange Master Agreement or any
other master agreement.

 

“Swap Creditor” means any Lender or any Affiliate of any Lender
from time to time party to one or more Swap Agreements permitted under the
Credit Agreement with a Loan Party (even if any such Lender for any reason
ceases after the execution of such agreement to be a Lender thereunder), and
its successors and assigns, and “Swap Creditors” means any two or more
of such Swap Creditors.

 

“Swap Obligations” of any Person means all obligations
(including, without limitation, any amounts which accrue after the commencement
of any bankruptcy or insolvency proceeding with respect to such Person, whether
or not allowed or allowable as a claim under any proceeding under any Debtor Relief
Law) of such Person in respect of any Swap Agreement, excluding any amounts
which such Person is entitled to set-off against its obligations under
applicable Law.

 

“Trademark” means any of the following, whether now existing or
hereafter arising, used, acquired or owned by a Loan Party:

 

(i)            the United States and foreign
trademarks described on Schedule V to any Loan Party’s Perfection
Certificate (as each such schedule may be amended, modified or supplemented
from time to time) and any renewals thereof, excluding in all cases any United
States intent-to-use trademark applications until and unless a Statement of Use
or an Amendment to Allege Use has been filed and accepted by the United States
Patent and Trademark Office;

 

(ii)           all other trademarks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, service marks, logos, certification marks, collective marks,
brand names, trademark rights arising out of domain names and trade dress which
are or have been used in the United States or in any state, territory or
possession thereof, or in any other place, nation or jurisdiction, along with
all prints and labels on which any of the foregoing have appeared or appear,
package and other designs, and any other source or business identifiers, and
general intangibles of like nature, and the rights in any of the foregoing
which arise under applicable Law;

 

(iii)          the goodwill of the business
symbolized thereby or associated with each of the foregoing;

 

(iv)          all registrations and applications in
connection therewith, including, without limitation, registrations and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state thereof or any other country or
any political subdivision thereof;

 

(v)           all reissues, extensions and renewals
thereof;

 

(vi)          all claims for, and rights to sue for,
past, present or future infringements of any of the foregoing;

 

(vii)         all income, royalties, damages and
payments now or hereafter due or payable with respect to any of the foregoing,
including, without limitation, damages and payments for past, present or future
infringements thereof and payments and damages under all Trademark Licenses in
connection therewith; and

 

12

 

(viii)        all rights corresponding to any of the
foregoing whether arising under the Laws of the United States or any foreign
country or otherwise.

 

“Trademark License” means any agreement now or hereafter in
existence granting to any Loan Party any right, whether exclusive or
non-exclusive, to use another Person’s trademarks or trademark applications, or
pursuant to which any Loan Party has granted to any other Person, any right,
whether exclusive or non-exclusive, to use any Trademark, whether or not
registered, including, without limitation, the Trademark Licenses described on Schedule
V to any Loan Party’s Perfection Certificate (as each such schedule may be
amended, modified or supplemented from time to time by such Loan Party) and the
rights to prepare for sale, sell and advertise for sale, all of the inventory
now or hereafter owned by any Loan Party and now or hereafter covered by such
license agreements.

 

“UCC” means the Uniform Commercial Code as in effect from time
to time in the State of New York; provided that if by reason of
mandatory provisions of Law, the perfection, the effect of perfection or
non-perfection or the priority of the Security Interests in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, “UCC” means the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non-perfection or priority.

 

Section 1.04         Terms Generally.  The definitions in Sections 1.02 and 1.03
shall apply equally to both the singular and plural forms of the terms defined,
except for terms defined in both the singular and the plural form.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”.  All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require.  Unless otherwise
expressly provided herein, the word “day” means a calendar day.

 

ARTICLE II

SECURITY INTERESTS

 

Section 2.01         Grant of Security Interests.  To secure the due and punctual payment of the
Senior Obligations, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing or due or to become
due, in accordance with the terms thereof and to secure the performance of all
of the Senior Obligations of each Loan Party, each Loan Party hereby grants to
the Senior Collateral Agent for the benefit of the Senior Finance Parties a
security interest in, and each Loan Party hereby pledges to the Senior
Collateral Agent for the benefit of the Senior Finance Parties, all of such
Loan Party’s right, title and interest in, to and under the Collateral.

 

Section 2.02         Collateral.  All right, title and interest of each Loan Party
in, to and under the following property, whether now owned or existing
or hereafter created or acquired by a Loan Party, whether tangible or
intangible, and regardless of where located, are herein collectively called the
“Collateral”:

 

(i)            all Receivables;

 

(ii)           all Inventory;

 

(iii)          all General Intangibles;

 

(iv)          all Intellectual Property;

 

13

 

(v)           all Documents and all Supporting
Obligations of any kind given by any Person with respect thereto;

 

(vi)          all Equipment;

 

(vii)         all Investment Property and all
Supporting Obligations of any kind given by any Person with respect thereto;

 

(viii)        all Deposit Accounts;

 

(ix)           all As-Extracted Collateral;

 

(x)            the Collateral Accounts, all cash and
other property deposited therein or credited thereto from time to time, the
Liquid Investments made pursuant to Section 2.09 and other monies and
property of any kind of any Loan Party maintained with or in the possession of
or under the control of any Collateral Agent;

 

(xi)           all books and records (including,
without limitation, customer lists, credit files, computer programs, printouts
and other computer materials and records) of each Loan Party pertaining to any
of the Collateral; and

 

(xii)          to the extent not otherwise included,
all Proceeds of all or any of the Collateral described in clauses (i)
through (xi) hereof;

 

provided, however, that, except as
otherwise required by Section 6.12(d) of the Credit Agreement, the
Collateral shall not include shares of capital stock having voting power in
excess of 65% of the voting power of all classes of capital stock of a Foreign
Subsidiary of any Loan Party if, and solely to the extent that, the inclusion
of such shares of capital stock hereunder would cause the undistributed
earnings of such Foreign Subsidiary as determined for United States federal
income tax purposes to be treated as a deemed repatriation of the earnings of
such Foreign Subsidiary to such Foreign Subsidiary’s United States parent for
United States federal income tax purposes; and provided, further,
that the Collateral shall not include any Excluded Contracts, Excluded
Equipment, Exempt Deposit Accounts or assets or other property to the extent
licensed or granted by a Loan Party to a Foreign Subsidiary (including a
Foreign IP Holdco) as contemplated by clause (iii)(B) of the definition
of “Foreign IP Transfer Transaction” in the Credit Agreement or licensed by a
Loan Party (in accordance with clause (iii)(B) of the definition of
“Foreign IP Transfer Transaction” in the Credit Agreement) to a Foreign
Subsidiary under the Research and Development Cost Sharing Agreement permitted
in the Credit Agreement.

 

Section 2.03         Continuing Liability of Each Loan Party.  Anything herein to the contrary notwithstanding,
each Loan Party shall remain liable to observe and perform all the terms and
conditions to be observed and performed by it under any contract, agreement,
warranty or other obligation with respect to the Collateral.  Neither the Senior Collateral Agent nor any
Senior Finance Party shall have any obligation or liability under any such
contract, agreement, warranty or obligation by reason of or arising out of this
Agreement or the receipt by the Senior Collateral Agent or any Senior Finance
Party of any payment relating to any Collateral, nor shall the Senior
Collateral Agent or any Senior Finance Party be required to perform or fulfill
any of the obligations of any Loan Party with respect to any of the Collateral,
to make any inquiry as to the nature or sufficiency of any payment received by
it or the sufficiency of the performance of any party’s obligations with
respect to any Collateral.  Furthermore,
neither the Senior Collateral Agent nor any Senior Finance Party shall be
required to file any claim or demand to collect any amount due or to enforce
the performance of any party’s obligations with respect to the Collateral.

 

14

 

Section 2.04         Security Interests Absolute.  All rights of the Senior Collateral Agent,
all security interests hereunder and all obligations of each Loan Party
hereunder are unconditional and absolute and independent and separate from any
other security for or guaranty of the Senior Obligations, whether executed by
such Loan Party, any other Loan Party or any other Person.  Without limiting the generality of the
foregoing, the obligations of each Loan Party hereunder shall not be released,
discharged or otherwise affected or impaired by:

 

(i)            any extension, renewal, settlement,
compromise, acceleration, waiver or release in respect of any obligation of any
other Loan Party under any Finance Document or any other agreement or
instrument evidencing or securing any Finance Obligation, by operation of Law
or otherwise;

 

(ii)           any change in the manner, place, time
or terms of payment of any Finance Obligation or any other amendment,
supplement or modification to any Finance Document or any other agreement or
instrument evidencing or securing any Finance Obligation;

 

(iii)          any release, non-perfection or
invalidity of any direct or indirect security for any Finance Obligation, any
sale, exchange, surrender, realization upon, offset against or other action in
respect of any direct or indirect security for any Finance Obligation or any
release of any other obligor or Loan Parties in respect of any Finance
Obligation;

 

(iv)          any change in the existence, structure
or ownership of any Loan Party, or any insolvency, bankruptcy, reorganization,
arrangement, readjustment, composition, liquidation or other similar proceeding
affecting any Loan Party or its assets or any resulting disallowance, release
or discharge of all or any portion of any Finance Obligation;

 

(v)           the existence of any claim, set-off
or other right which any Loan Party may have at any time against the Borrower,
any other Loan Party, any Agent, any other Finance Party, or any other Person,
whether in connection herewith or any unrelated transaction; provided
that nothing herein shall prevent the assertion of any such claim by separate
suit or compulsory counterclaim;

 

(vi)          any invalidity or unenforceability
relating to or against the Borrower or any other Loan Party for any reason of
any Finance Document or any other agreement or instrument evidencing or
securing any Finance Obligation or any provision of applicable Law or
regulation purporting to prohibit the payment by the Borrower or any other Loan
Party of any Finance Obligation;

 

(vii)         any failure by any Finance Party:  (A) to file or enforce a claim against any
Loan Party or its estate (in a bankruptcy or other proceeding); (B) to give
notice of the existence, creation or incurrence by any Loan Party of any new or
additional indebtedness or obligation under or with respect to the Finance
Obligations; (C) to commence any action against any Loan Party; (D) to disclose
to any Loan Party any facts which such Finance Party may now or hereafter know
with regard to any Loan Party; or (E) to proceed with due diligence in the
collection, protection or realization upon any collateral securing the Finance
Obligations;

 

(viii)        any direction as to application of
payment by the Borrower, any other Loan Party or any other Person;

 

15

 

(ix)           any subordination by any Finance
Party of the payment of any Finance Obligation to the payment of any other
liability (whether matured or unmatured) of any Loan Party to its creditors;

 

(x)            any act or failure to act by any
Collateral Agent or any other Finance Party under this Agreement or otherwise
which may deprive any Loan Party of any right to subrogation, contribution or
reimbursement against any other Loan Party or any right to recover full
indemnity for any payments made by such Loan Party in respect of the Finance
Obligations; or

 

(xi)           any other act or omission to act or
delay of any kind by any Loan Party or any Finance Party or any other Person or
any other circumstance whatsoever which might, but for the provisions of this
clause, constitute a legal or equitable discharge of any Loan Party’s
obligations hereunder, except that a Loan Party may assert the defense of final
payment in full of the Senior Obligations.

 

Each Loan Party has irrevocably and unconditionally delivered this
Agreement to the Senior Collateral Agent, for the benefit of the Senior Finance
Parties, and the failure by any other Person to sign this Agreement or a
security agreement similar to this Agreement or otherwise shall not discharge
the obligations of any Loan Party hereunder.

 

This Agreement shall remain fully enforceable against each Loan Party
irrespective of any defenses that any other Loan Party may have or assert in
respect of the Finance Obligations, including, without limitation, failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, except that a Loan Party may
assert the defense of final payment in full of the Senior Obligations.

 

Section 2.05         Segregation of Proceeds; Cash Proceeds
Account.

 

(a)           Creation
of Cash Proceeds Account. 
The Administrative Agent has established a Securities Account (the “Cash
Proceeds Account”) at Bank of America, N.A., designated as “Bank of
America, N.A. – VeriFone Cash Collateral Account” in the name of “Bank of
America, N.A., as Senior Collateral Agent” and under the exclusive control of
the Senior Collateral Agent for the benefit of the Senior Finance Parties and
the Second Lien Lenders.  Upon payment in
full of all Senior Obligations, the Second Lien Collateral Agent shall assume
exclusive control of the Cash Proceeds Account for the benefit of the Second
Lien Lenders.  All cash Proceeds of the
Collateral required to be delivered to the Senior Collateral Agent pursuant to subsection
(b) of this Section shall be deposited in the Cash Proceeds Account.  Any income received by the Senior Collateral
Agent with respect to the balance from time to time standing to the credit of
the Cash Proceeds Account, including any interest or capital gains on Liquid
Investments, shall remain, or be deposited, in the Cash Proceeds Account.  All right, title and interest in and to the
cash amounts on deposit from time to time in the Cash Proceeds Account together
with any Liquid Investments from time to time made pursuant to Section 2.09
and any other property or assets from time to time deposited in or credited to
the Cash Proceeds Account shall vest in and be under the sole dominion and
control of the Senior Collateral Agent until the Senior Obligations are paid in
full, and, thereafter, shall vest in and be under the sole dominion and control
of the Second Lien Collateral Agent, shall constitute part of the Collateral
hereunder and shall not constitute payment of the Senior Obligations until
applied thereto as hereinafter provided.

 

(b)           Deposits
to Cash Proceeds Account. 
Upon the occurrence and during the continuance of an Event of Default,
except as otherwise provided in Section 2.06 or 2.07, each Loan
Party shall instruct all Account Debtors and other Persons obligated in respect
of its Receivables and other 

 

16

 

Collateral to
make all payments in respect of its Receivables and other Collateral either (i)
directly to the Senior Collateral Agent (by instructing that such payments be
remitted by direct wire transfer to the Senior Collateral Agent at its address
referred to in Section 7.01 or to a post office box which shall be in
the name and under the control of the Senior Collateral Agent) or (ii) to one
or more other banks in the United States (by instructing that such payments be
remitted by direct wire transfer to, or to a post office box which shall be in
the name and under the control of, such bank) under an Account Control
Agreement duly executed by each relevant Loan Party and such bank or under
other arrangements, in form and substance satisfactory to the Senior Collateral
Agent, pursuant to which each relevant Loan Party shall have irrevocably
instructed such other bank (and such other bank shall have agreed) to remit all
proceeds of such payments directly to the Senior Collateral Agent for deposit
into the Cash Proceeds Account or as the Senior Collateral Agent may otherwise
instruct such bank.  All such payments
made to the Senior Collateral Agent shall be deposited in the Cash Proceeds
Account.  In addition to the foregoing,
each Loan Party agrees that if the Proceeds of any Collateral hereunder
(including the payments made in respect of Receivables) shall be received by it
after the occurrence and during the continuance of an Event of Default, such
Loan Party shall as promptly as possible deposit such Proceeds into the Cash
Proceeds Account.  Until so deposited,
all such Proceeds shall be held in trust by the relevant Loan Party for and as
the property of the Senior Collateral Agent for the benefit of the Finance
Parties and shall not be commingled with any other funds or property of any
Loan Party.  Each Loan Party hereby
irrevocably consents and agrees to such disbursement.  Each Loan Party hereby irrevocably authorizes
and empowers the Senior Collateral Agent, its officers, employees and authorized
agents, upon the occurrence and during the continuation of an Event of Default,
to endorse and sign its name on all checks, drafts, money orders or other media
of payment so delivered, and such endorsements or assignments shall, for all
purposes, be deemed to have been made by the relevant Loan Party prior to any
endorsement or assignment thereof by the Senior Collateral Agent.  The Senior Collateral Agent may use any
convenient or customary means for the purpose of collecting such checks,
drafts, money orders or other media of payment.

 

Section 2.06         Reinvestment Funds Account.

 

(a)           Creation
of and Deposits to the Reinvestment Funds Account.  Promptly upon and at all times after the
receipt by any Loan Party of any Insurance Proceeds or Condemnation Awards or
other amounts required to be paid to the Senior Collateral Agent pursuant to Section
6.07(b) of the Credit Agreement, Section 4.11 hereof or pursuant to
any similar provision of any other Loan Document (collectively, “Reinvestment
Funds”), such Loan Party shall establish and shall thereafter maintain an
additional Securities Account (the “Reinvestment Funds Account”) at the
offices of the Senior Collateral Agent or such other bank or other financial
institution as such Loan Party and the Senior Collateral Agent may agree, in
the name and under the exclusive control of the Senior Collateral Agent.  If the Reinvestment Funds Account is not
maintained at an office of the Senior Collateral Agent, then forthwith upon the
establishment of such account, the applicable Loan Party shall notify the
Senior Collateral Agent of the location, account name and account number of
such account and shall deliver to the Senior Collateral Agent an Account
Control Agreement with respect to such Reinvestment Funds Account duly executed
by such Loan Party and the Securities Intermediary maintaining such
Reinvestment Funds Account.  Each Loan
Party hereby agrees to cause any Reinvestment Funds received from time to time
after the establishment of the Reinvestment Funds Account to be deposited
therein as set forth in this paragraph. 
Any Insurance Proceeds exceeding $5,000,000 in respect of one or a
series of related events or conditions giving rise thereto received from time
to time by the Senior Collateral Agent in respect of which the Senior
Collateral Agent is an insured party and loss payee shall be promptly deposited
in the Reinvestment Funds Account as set forth in this paragraph.  Any income received with respect to the
balance from time to time standing to the credit of the Reinvestment Funds
Account, including any interest or capital gains on Liquid Investments, shall
remain, or be deposited, in the Reinvestment Funds Account.  All right, title and interest in and to the
cash amounts on deposit from time to time in the 

 

17

 

Reinvestment
Funds Account together with any Liquid Investments from time to time made
pursuant to Section 2.09 and any other property or assets from time to
time deposited in or credited to the Reinvestment Funds Account shall vest in
the Senior Collateral Agent for the benefit of the holders from time to time of
the Senior Obligations and shall constitute part of the Collateral hereunder
and shall not constitute payment of the Senior Obligations until applied
thereto as hereinafter provided.  The
Senior Collateral Agent shall apply to repayment of the Senior Loans and, if
necessary, to cash collateralization of L/C Obligations those amounts on
deposit in the Reinvestment Funds Account which are required to be applied to
the repayment of the Loans in accordance with Section 2.09(b)(iii)
of the Credit Agreement and the definition of “Reinvestment Funds” in Section
1.01 of the Credit Agreement or any other applicable term of any Finance
Document, and, unless a Default or an Event of Default shall have occurred and
be continuing, shall promptly in accordance with subsection (b) below
release to, or upon the order of the Loan Party in respect of which such
Reinvestment Funds were delivered, those amounts on deposit in the Reinvestment
Funds Account which are not required to be so applied or retained in the
Reinvestment Funds Account pursuant to any other provision of any Loan Document
for application as provided in subsection (b) below.

 

(b)           Withdrawals
from Reinvestment Funds Account. 
The balance from time to time standing to the credit of the Reinvestment
Funds Account (to the extent not applied pursuant to the last sentence of Section
2.06(a)) shall be subject to withdrawal only upon the instructions of the
Senior Collateral Agent.  Except upon the
occurrence and continuation of a Default or an Event of Default, the Senior
Collateral Agent agrees to give instructions to distribute such amounts to the
applicable Loan Party at such times and in such amounts as such Loan Party
shall request for the purpose of repairing, reconstructing or replacing the
property in respect of which such Reinvestment Funds were received or for the
purpose of repaying indebtedness secured by a Permitted Lien on, or meeting
other liabilities in respect of, the property in respect of which such
Reinvestment Funds were received.  Each
Loan Party hereby irrevocably consents and agrees to such distribution.  To the extent required by any Loan Document,
any such request shall be accompanied by a certificate of the chief executive
officer or chief financial officer of such Loan Party setting forth in detail
reasonably satisfactory to the Senior Collateral Agent the repair,
reconstruction or replacement for which such funds will be expended.  If immediately available cash on deposit in
the Reinvestment Funds Account is not sufficient to make any distribution to a
Loan Party referred to in the previous sentence of this Section 2.06(b),
the Senior Collateral Agent shall cause to be liquidated as promptly as
practicable such Liquid Investments in the Reinvestment Funds Account
designated by such Loan Party and the Borrower as are required to obtain
sufficient cash to make such distribution and, notwithstanding any other
provision of this Article II, such distribution shall not be made until
such liquidation has taken place.  Upon
the occurrence and continuation of an Event of Default, the Senior Collateral
Agent may apply or cause to be applied (subject to collection) any or all of
the balance from time to time standing to the credit of the Reinvestment Funds
Account in the manner specified in Section 5.05 hereof.

 

Section 2.07         L/C Cash Collateral Account.  All amounts required to be deposited by any
Loan Party as cash collateral for L/C Obligations pursuant to Section
2.09(b) or Section 8.02(c) of the Credit Agreement, any similar
provision of any other Loan Document or pursuant to Section 5.05 hereof
shall be deposited in a Securities Account (the “L/C Cash Collateral Account”)
established and maintained by such Loan Party at the offices of the Senior
Collateral Agent or such other bank or other financial institution as such Loan
Party and the Senior Collateral Agent may agree, in the name and under the
exclusive control of the Senior Collateral Agent.  If the L/C Cash Collateral Account is not
maintained at an office of the Senior Collateral Agent, then forthwith upon the
establishment of such account, the applicable Loan Party shall notify the
Senior Collateral Agent of the location, account name and account number of
such account and shall deliver to the Senior Collateral Agent an Account
Control Agreement with respect to such L/C Cash Collateral Account duly
executed by such Loan Party and the Securities Intermediary maintaining such
L/C Cash Collateral Account.  Any income
received with respect to the 

 

18

 

balance from
time to time standing to the credit of the L/C Cash Collateral Account,
including any interest or capital gains on Liquid Investments, shall remain, or
be deposited, in the L/C Cash Collateral Account.  All cash amounts on deposit from time to time
in the L/C Cash Collateral Account together with any Liquid Investments from
time to time made pursuant to Section 2.09 and any other property or
assets from time to time deposited in or credited to the L/C Cash Collateral
Account shall be under the sole dominion and control of the Senior Collateral
Agent for the benefit of the L/C Issuers and the Revolving Lenders, shall
constitute part of the Collateral hereunder and shall not constitute payment of
the Senior Credit Obligations until applied thereto as hereinafter
provided.  If and when any portion of the
L/C Obligations on which any deposit in the L/C Cash Collateral Account was
based (the “Relevant Contingent Exposure”) shall become fixed (a “Direct
Exposure”) as a result of the payment by the Issuing Lender with respect
thereto of a draft presented under any Letter of Credit, the amount of such
Direct Exposure (but not more than the amount in the L/C Cash Collateral
Account at the time) shall be withdrawn by the Senior Collateral Agent from the
L/C Cash Collateral Account and shall be paid to the Administrative Agent for
application pursuant to the Credit Agreement, and the Relevant Contingent
Exposure shall thereupon be reduced by such amount.  If at any time the amount in the L/C Cash
Collateral Account exceeds the Relevant Contingent Exposure, the excess amount
shall, so long as no Event of Default shall have occurred and be continuing, be
withdrawn by the Senior Collateral Agent and paid to the applicable Loan Party
or its order.  In addition, funds will be
released from the L/C Cash Collateral Account at such times and in such amounts
as provided in Section 2.05(j) of the Credit Agreement.  Each Loan Party hereby irrevocably consents
and agrees to each such distribution.  If
an Event of Default shall have occurred and be continuing, the excess of the
funds in the L/C Cash Collateral Account over the Relevant Contingent Exposure
shall be retained in the L/C Cash Collateral Account and, upon the occurrence
and continuation of an Event of Default, may be withdrawn by the Senior
Collateral Agent and applied in the manner specified in Section 5.05.  If immediately available cash on deposit in
the L/C Cash Collateral Account is not sufficient to make any distribution to a
Loan Party referred to in this Section 2.07, the Senior Collateral Agent
shall cause to be liquidated as promptly as practicable such Liquid Investments
in the Cash Collateral Account designated by such Loan Party as are required to
obtain sufficient cash to make such distribution and, notwithstanding any other
provision of this Section 2.07, such distribution shall not be made
until such liquidation has taken place.

 

Section 2.08         Prepayment Account.  All amounts required to be deposited by the
Borrower as cash collateral pursuant to Section 2.09(b)(ix) of the
Credit Agreement shall be deposited in a Securities Account (the “Prepayment
Account”) established and maintained by the Borrower at the offices of the
Senior Collateral Agent or such other bank or other financial institution as
the Borrower and the Senior Collateral Agent may agree, in the name and under
the exclusive control of the Senior Collateral Agent.  If the Prepayment Account is not maintained
at an office of the Senior Collateral Agent, then forthwith upon the
establishment of such account, the Loan Party so required to make such deposit
shall notify the Senior Collateral Agent of the location, account name and
account number of such account and shall deliver to the Senior Collateral Agent
an Account Control Agreement with respect to such Prepayment Account duly
executed by the Borrower and the Securities Intermediary maintaining such
Prepayment Account.  Any income received
with respect to the balance from time to time standing to the credit of the
Prepayment Account, including any interest or capital gains on Liquid
Investments, shall remain, or be deposited, in the Prepayment Account.  All cash amounts on deposit from time to time
in the Prepayment Account, together with any Liquid Investments from time to
time deposited in or credited to the Prepayment Account, shall be under the
sole dominion and control of the Senior Collateral Agent for the ratable
benefit of the holders from time to time of the Senior Credit Obligations and
shall constitute part of the Collateral hereunder and shall not constitute
payment of the Credit Obligations until applied thereto as hereinafter
provided.  The Senior Collateral Agent
shall from time to time pay to the Administrative Agent for application to
repayment of the Loans of the respective Class as required by Section
2.09(b)(ix) of the Credit Agreement those amounts on deposit in the
Prepayment Account which are required to be applied to the repayment of the
Loans of such Class in accordance with 

 

19

 

Section 2.09(b)(ix)
of the Credit Agreement.  If immediately
available cash on deposit in the Prepayment Account is not sufficient to make any
distribution referred to in this Section 2.08, the Senior Collateral
Agent shall cause to be liquidated as promptly as practicable such Liquid
Investments in the Prepayment Account designated by the Borrower as are
required to obtain sufficient cash to make such distribution and,
notwithstanding any other provision of this Section 2.08, such
distribution shall not be made until such liquidation has taken place.

 

Section 2.09         Investment of Funds in Collateral Accounts.  Amounts on deposit in the Collateral Accounts
shall be invested and re-invested from time to time in such Liquid Investments
as the Borrower shall determine, which Liquid Investments shall be held in the
name and be under the control of the Senior Collateral Agent; provided
that, if an Event of Default has occurred and is continuing, the Senior
Collateral Agent may liquidate any such Liquid Investments and apply or cause
to be applied the proceeds thereof in the manner specified in Section 5.05.  For this purpose, “Liquid Investments”
means Cash Equivalents maturing within 30 days after a Cash Equivalent is
acquired by the Senior Collateral Agent.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Each Loan Party represents and warrants that:

 

Section 3.01         Title to Collateral.  Such Loan Party has good and sufficient legal
title to, or valid license or leasehold interests in, all of the Collateral in
which it has granted a security interest hereunder, free and clear of any Liens
other than Permitted Liens.  Such Loan
Party has taken all actions necessary under the UCC to perfect its interest in
any Receivables purchased by or assigned to it, as against its assignors and
creditors of its assignors.  Other than
financing statements or other similar or equivalent documents or instruments
with respect to the Security Interests, Permitted Liens and Liens securing
indebtedness to be repaid with the proceeds of the initial Loans under the
Credit Agreement and in respect of which the Administrative Agent has received
pay-off letters and instruments appropriate under local Law to effect the
termination of such Liens, no financing statement, mortgage, security agreement
or similar or equivalent document or instrument covering all or any part of the
Collateral is on file or of record in any jurisdiction in which such filing or
recording would be effective to perfect a Lien on such Collateral.  No Collateral having a value individually or
collectively in excess of $1,000,000 (other than Inventory in transit not
covered by a negotiable document of title or Inventory in the possession of a
carrier or similar bailee as to which the provisions of Section 4.04 of
this Agreement have been complied with) is in the possession or control of any
Person (other than a Loan Party) asserting any claim thereto or security
interest therein, except that the Senior Collateral Agent or its designee, and
the Senior Collateral Agent acting as bailee for the Second Lien Collateral
Agent pursuant to the Intercreditor Agreement, may have possession and/or
control of Collateral as contemplated hereby and by the other Loan Documents.

 

Section 3.02         Validity, Perfection and Priority of Security
Interests.

 

(a)           The Security Interest constitutes a
valid security interest under the UCC securing the Senior Obligations.

 

(b)           When Uniform Commercial Code
financing statements stating that the same covers “all assets of the Debtor”,
“all personal property of the Debtor” or words of similar import or containing
the description of Collateral set forth on Exhibit E hereto shall have
been filed in the offices specified in Schedule 4.01 hereto, the
Security Interest will constitute a Requisite Priority Lien in all 

 

20

 

right, title
and interest of such Loan Party in the Collateral to the extent that a security
interest therein may be perfected by filing pursuant to the UCC.

 

(c)           When each Patent and Trademark
Agreement has been filed with the United States Patent and Trademark Office and
each Copyright Agreement has been filed with the United States Copyright Office,
the Security Interest will constitute a Requisite Priority Lien in all right,
title and interest of such Loan Party in the Recordable Intellectual Property
therein described to the extent that a security interest therein may be
perfected by such filing pursuant to applicable Law.

 

(d)           When each Account Control Agreement
has been executed and delivered to the Senior Collateral Agent, the Security
Interest will constitute a Requisite Priority Lien in all right, title and
interest of the Loan Parties in the Deposit Accounts and Securities Accounts,
as applicable, subject thereto, prior to all other Liens other than Permitted
Liens and rights of others therein.

 

(e)           When each consent substantially in
the form of Exhibit D hereto has been executed and delivered to the
Senior Collateral Agent, the Security Interest will constitute a Requisite
Priority Lien in all right, title and interest of such Loan Party in the
Letter-of-Credit Rights referred to therein, prior to all other Liens other
than Permitted Liens and rights of others therein.

 

(f)            So long as such Loan Party is in
compliance with the provisions of Section 4.13, the Security Interest
will constitute a Requisite Priority Lien in all right, title and interest of
such Loan Party in all electronic Chattel Paper, prior to all other Liens other
than Permitted Liens and rights of others therein.

 

The Security
Interest created hereunder in favor of the Senior Collateral Agent for the
benefit of the Senior Finance Parties shall be prior to all other Liens on the
Collateral except for Permitted Liens (exclusive of those in favor of the
Second Lien Collateral Agent) having priority over the Senior Collateral
Agent’s Lien by operation of Law or otherwise as permitted under the Credit
Agreement.

 

Section 3.03         Fair Labor Standards Act.  All of such Loan Party’s Inventory has or
will have been produced in compliance with the applicable requirements of the
Fair Labor Standards Act, as amended from time to time, or any successor
statute, and regulations promulgated thereunder.

 

Section 3.04         No Consents.  No consent of any other Person (including,
without limitation, any stockholder or creditor of such Loan Party or any of
its Subsidiaries) and no order, material consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by any Governmental Authority is required to be obtained by such Loan
Party in connection with the execution, delivery or performance of this
Agreement, or in connection with the exercise of the rights and remedies of the
Senior Collateral Agent pursuant to this Agreement, except (i) as may be
required to perfect (as described in Schedule 4.01 hereto) and maintain
the perfection of the security interests created hereby, (ii) with respect to
vehicles represented by a certificate of title, (iii) with respect to
Receivables subject to the Federal Assignment of Claims Act or (iv) in
connection with the disposition of the Collateral by Laws affecting the
offering and sale of securities generally or as described in Schedule 5.03
to the Credit Agreement; provided, however, that (i) the
registration of Copyrights in the United States Copyright Office may be
required to obtain a security interest therein that is effective against
subsequent transferees under United States Federal copyright Law and (ii) to
the extent that recordation of the Security Interest in favor of the Senior
Collateral Agent in the United States Patent and Trademark Office or the United
States Copyright Office is necessary to perfect such Security Interest or to
render such Security Interest effective against subsequent third parties, such
recordations will not have been made with respect to the items that are not
Recordable Intellectual Property.

 

21

 

Section 3.05         Deposit and Securities Accounts.  Schedule 3.05 hereto sets forth as of
the date hereof a complete and correct list of each Loan Party’s Deposit
Accounts and Securities Accounts, the name and address of the financial
institution which maintains each such account and the purpose for which such
account is used.

 

ARTICLE IV

COVENANTS

 

Each Loan Party covenants and agrees that until the payment in full of
all Senior Obligations (other than contingent indemnification obligations) and
until there is no commitment by any Senior Finance Party to make further
advances, incur obligations or otherwise give value, such Loan Party will
comply with the following:

 

Section 4.01         Delivery of Perfection Certificate; Initial
Perfection and Delivery of Search Reports.  On or prior to the Closing Date, such Loan
Party shall (i) deliver its Perfection Certificate to the Senior Collateral
Agent, (ii) deliver to the Senior Collateral Agent a fully executed Account
Control Agreement with respect to each of its Securities Accounts, (iii)
deliver to the Senior Collateral Agent a fully executed consent substantially
in the form of Exhibit D hereto with respect to each of its
Letter-of-Credit Rights and (iv) authorize all filings and recordings specified
in Schedule 4.01 hereto to be completed.  The information set forth in the Perfection
Certificate shall be correct and complete as of the Closing Date.  Within 90 days following the Closing Date,
each Loan Party shall deliver to the Senior Collateral Agent a fully executed
Account Control Agreement with respect to each of its Deposit Accounts (other
than Exempt Deposit Accounts).

 

Section 4.02         Change of Name, Organizational Structure or
Location; Subjection to Other Security Agreements.  Such Loan Party will not change its name,
organizational structure or location (determined as provided in Section 9-307
of the UCC) in any manner, and shall not become bound, as provided in Section
9-203(d) of the UCC, by a security agreement entered into by another Person, in
each case, unless it shall have given the Senior Collateral Agent not less than
20 days’ prior notice thereof.  Such Loan
Party shall not in any event change the location of any Collateral or its name,
organizational structure or location (determined as provided in Section 9-307
of the UCC), or become bound, as provided in Section 9-203(d) of the UCC, by a
security agreement entered into by another Person, if such change would cause
the Security Interest in favor of the Senior Collateral Agent in any Collateral
to lapse or cease to be perfected unless such Loan Party has taken on or before
the date of lapse all actions necessary to ensure that such Security Interest
in the Collateral does not lapse or cease to be perfected.

 

Section 4.03         Further Actions.  Such Loan Party will, from time to time at
its expense and in such manner and form as the Senior Collateral Agent may
reasonably request, execute, deliver, file and record or authorize the
recording of any financing statement, specific assignment, instrument, document,
agreement or other paper and take any other action (including, without
limitation, any filings of financing or continuation statements under the
Uniform Commercial Code and any filings with the United States Patent and
Trademark Office and the United States Copyright Office) that from time to time
may be necessary or advisable under the UCC or with respect to Recordable
Intellectual Property, or that the Senior Collateral Agent may request, in
order to create, preserve, perfect or maintain the Security Interest or to
enable the Senior Collateral Agent and the Senior Finance Parties to exercise
and enforce any of its rights, powers and remedies created hereunder or under
applicable Law with respect to any of the Collateral.  Such Loan Party shall maintain the Security
Interests as a Requisite Priority Lien and shall defend such security interests
and such priority against the claims and demands of all Persons to the extent
adverse to such Loan Party’s ownership rights or otherwise inconsistent with
this Agreement or the other Loan Documents. 
To the extent permitted by applicable Law, such Loan Party hereby
authorizes 

 

22

 

the Senior
Collateral Agent to file, in the name of such Loan Party or otherwise and without
separate authorization or authentication of such Loan Party appearing thereon,
such Uniform Commercial Code financing statements or continuation statements as
the Senior Collateral Agent in its sole discretion may deem necessary or
reasonably appropriate to further perfect or maintain the perfection of the
Security Interest in favor of the Senior Collateral Agent.  Such Loan Party hereby authorizes the Senior
Collateral Agent to file financing and continuation statements describing as
the Collateral covered thereby “all of the debtor’s personal property and
assets” or words to similar effect, notwithstanding that such description may
be broader in scope than the Collateral described in this Agreement.  Such Loan Party agrees that, except to the
extent that any filing office requires otherwise, a carbon, photographic,
photostatic or other reproduction of this Agreement or of a financing statement
is sufficient as a financing statement. 
The Loan Parties shall pay the costs of, or incidental to, any recording
or filing of any financing or continuation statements or other assignment
documents concerning the Collateral.

 

Section 4.04         Collateral in Possession of Other Persons.  If any of such Loan Party’s Collateral having
a value individually or collectively in excess of $1,000,000 is at any time in
the possession or control of any warehouseman, vendor, bailee or any agents or
processors of any Loan Party, such Loan Party shall (i) notify such
warehouseman, vendor, bailee, agent or processor of the Security Interest
created hereby, (ii) instruct such warehouseman, vendor, bailee, agent or
processor to hold all such Collateral for the Senior Collateral Agent’s account
and subject to the Senior Collateral Agent’s instructions, (iii) use
commercially reasonable efforts (without incurring material obligations or
foregoing material rights) to cause such warehouseman, vendor, bailee, agent or
processor to authenticate a record acknowledging that it holds possession of
such Collateral for the benefit of the Senior Collateral Agent and (iv) make
such authenticated record available to the Senior Collateral Agent.  Such Loan Party agrees that if any warehouse
receipt or receipt in the nature of a warehouse receipt is issued with respect
to any of its Inventory, such warehouse receipt or receipt in the nature
thereof shall not be “negotiable” (as such term is used in Section 7-104 of the
Uniform Commercial Code as in effect in any relevant jurisdiction or under
other relevant Law).

 

Section 4.05         Books and Records.  Such Loan Party shall keep full and accurate,
in all material respects, books and records relating to the Collateral,
including, but not limited to, the originals of all documentation with respect
thereto, records of all payments received, all credits granted thereon, all
merchandise returned and all other dealings therewith, and such Loan Party will
make the same available to the Senior Collateral Agent for inspection in
accordance with Section 6.10 of the Credit Agreement, at such Loan
Party’s own cost and expense, at any time during normal business hours.  Upon direction by the Senior Collateral
Agent, such Loan Party shall stamp or otherwise mark such books and records in
such manner as the Senior Collateral Agent may reasonably require in order to
reflect the Security Interest.

 

Section 4.06         Delivery of Instruments, Etc.  Such Loan Party will immediately deliver each
Instrument and each Certificated Security (other than (i) promissory notes
having individually a face value not in excess of $500,000, (ii) Cash Equivalents
held in a Deposit Account or a Securities Account and subject to an effective
Account Control Agreement as required by Section 4.12 hereof and (iii)
Instruments or Certificated Securities received in connection with bankruptcy
or reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers in the
ordinary course of business having individually a face amount of less than
$500,000 in the case of Instruments or Certificated Securities subject to this clause
(iii) (the Instruments and Certificated Securities described in clauses
(i), (ii) and (iii) above constituting “Excepted
Instruments”)) to the Senior Collateral Agent, appropriately indorsed to
the Senior Collateral Agent; provided that so long as no Event of
Default shall have occurred and be continuing, and except as required by any
other Loan Document, such Loan Party may (unless otherwise provided in Section 2.05(b))
retain for collection in the ordinary course of business any checks, drafts and
other 

 

23

 

Instruments
received by it in the ordinary course of business and may retain any Collateral
which it is otherwise entitled to receive and retain pursuant to Section 5.01 of
the Senior Pledge Agreement, and the Senior Collateral Agent shall, promptly
upon request of such Loan Party, make appropriate arrangements for making any
other Instrument or Certificated Security pledged by such Loan Party available
to it for purposes of presentation, collection or renewal (any such arrangement
to be effected, to the extent deemed appropriate to the Senior Collateral
Agent, against trust receipt or like document).

 

Section 4.07         Notification to Account Debtors.  Upon the occurrence and during the
continuance of any Event of Default and if so requested by the Senior
Collateral Agent, such Loan Party will promptly notify (and such Loan Party
hereby authorizes the Senior Collateral Agent so to notify after the occurrence
and during the continuance of any Event of Default under Section 8.01(a)
or 8.01(f) of the Credit Agreement or any other Event of Default which
has resulted in the Administrative Agent or the Senior Collateral Agent
exercising any of its rights under Section 8.02 of the Credit Agreement)
each Account Debtor in respect of any Receivable that such Collateral has been
assigned to the Collateral Agent hereunder for the benefit of the Senior
Finance Parties, and that any payments due or to become due in respect of such
Collateral are to be made directly to the Senior Collateral Agent or its
designee in accordance with Section 2.05 hereof.

 

Section 4.08         Disposition of Collateral.  Such Loan Party will not sell, lease,
exchange, license, assign or otherwise dispose of, or grant any option with
respect to, any Collateral or create or suffer to exist any Lien (other than
the Security Interest, the security interest in favor of the Second Lien
Collateral Agent securing the Second Lien Obligations and other Permitted
Liens) on any Collateral except that, subject to the rights of the Senior
Collateral Agent hereunder and, if so provided in the Intercreditor Agreement,
to the rights of the Second Lien Collateral Agent under the Second Lien
Security Agreement if an Event of Default shall have occurred and be
continuing, such Loan Party may sell, lease, exchange, license, assign, or
otherwise dispose of, or grant options with respect to, Collateral to the
extent expressly permitted by the Credit Agreement, whereupon, in the case of
any such disposition, the Security Interest created hereby in such item (but
not in any Proceeds arising from such disposition) shall cease immediately
without any further action on the part of the Senior Collateral Agent.

 

Section 4.09         Insurance.  Prior to the Closing Date, such Loan Party
will cause the Senior Collateral Agent to be named as an insured party and loss
payee, effective at all times on and after the Closing Date, on each insurance
policy covering risks relating to any of its Inventory and Equipment.  Each such insurance policy shall include
effective waivers by the insurer of all claims for insurance premiums against
the Senior Collateral Agent and any Senior Finance Party, provide for coverage
to the Senior Collateral Agent for the benefit of the Senior Finance Parties
regardless of the breach by such Loan Party of any warranty or representation
made therein, not be subject to co-insurance, provide that all insurance
proceeds in excess of $5,000,000 per claim shall be adjusted with and payable
to the Applicable Collateral Agent (for payment to the Administrative Agent for
application as required by Section 2.09(b) or 6.07(b) of the
Credit Agreement, if then in effect, or otherwise as contemplated by the other
Loan Documents) and provide that no cancellation, termination or material
modification thereof shall be effective until at least 30 days after receipt by
the Senior Collateral Agent of notice thereof. 
Such Loan Party hereby appoints the Senior Collateral Agent as its
attorney-in-fact, effective during the continuance of an Event of Default, to
make proof of loss, claims for insurance and adjustments with insurers, and to
execute or endorse all documents, checks or drafts in connection with payments
made as a result of any insurance policies.

 

Such Loan Party assumes all liability and responsibility in connection
with the Collateral acquired by it and the liability of such Loan Party to pay
the Senior Credit Obligations shall in no way be affected or diminished by
reason of the fact that such Collateral may be lost, destroyed, stolen, damaged
or for any reason whatsoever unavailable to such Loan Party.

 

24

 

Section 4.10         Information Regarding Collateral.  Such Loan Party will, promptly upon request,
provide to the Senior Collateral Agent all information and evidence it may
reasonably request concerning the Collateral to enable the Senior Collateral
Agent to enforce the provisions of this Agreement.

 

Section 4.11         Covenants Regarding Intellectual Property.  Except in respect of subparagraphs (a),
(b), (c), (e) and (f) below where the failure to do
so could not reasonably be expected to have a Material Adverse Effect:

 

(a)           Such Loan Party (either itself or
through licensees) will, for each Patent, not do any act, or omit to do any
act, whereby any Patent may become invalidated or dedicated to the public
(except where the Loan Party has determined in its reasonable business judgment
that such Patent is no longer reasonably necessary to the business of the Group
Company), and shall continue to mark any products covered by a Patent with the
relevant patent number or indication that a Patent is pending as required by
the patent Laws.

 

(b)           Such Loan Party (either itself or, if
permitted by Law, through its licensees or its sublicensees) will, for each
Trademark, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity from non-use, material alteration, naked licensing or
genericide except where the Loan Party has determined in its reasonable
business judgment that such Trademark is no longer reasonably necessary to the
business of the Group Company, (ii) maintain the quality of products and
services offered under such Trademark in a manner substantially consistent with
or better than the quality of such products and services as of the date hereof,
(iii) display such Trademark with proper notice, including notice of federal
registration to the extent permitted by applicable Law, (iv) not knowingly use
or knowingly permit the use of such Trademark in violation of any third party
rights, (v) not permit any assignment in gross of such Trademark and (vi) allow
the Senior Collateral Agent and its designees the right, at any time and from
time to time, to inspect such Loan Party’s premises and to examine and observe
such Loan Party’s books, records and operations, including, without limitation,
its quality control processes, upon reasonable notice and at such reasonable
times and as often as may be reasonably requested (but not more frequently than
twice per year unless an Event of Default has occurred and is continuing).

 

(c)           Such Loan Party (either itself or
through licensees) will, for each work covered by a Copyright material to the
conduct of its business, continue to publish, reproduce, display, adopt and
distribute the work with appropriate copyright notice.

 

(d)           Such Loan Party shall promptly notify
the Senior Collateral Agent if it knows that any Patent, Trademark or Copyright
(or any application or registration relating thereto) necessary in its
reasonable business judgment to the conduct of its business may become
abandoned or dedicated to the public, or of any material potential or actual
adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court) regarding such Loan Party’s ownership of any Patent,
Trademark, Copyright or Software necessary in its reasonable business judgment
to the conduct of its business, its right to register the same or to keep, use
or maintain the same.

 

(e)           Such Loan Party will take all
necessary steps to file, maintain and pursue each material application relating
to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant
or registration) and to preserve and maintain all common Law rights in any
Trademarks and each registration of the Patents, Trademarks and Copyrights in
each instance which are material to the conduct of its business, including
filing and paying fees for applications for renewal, reissues, divisions, 

 

25

 

continuations,
continuations-in-part, affidavits of use, affidavits of incontestability and
maintenance, and, unless such Loan Party shall reasonably determine that any
such action would be commercially unreasonable, to initiate opposition,
interference, reexamination and cancellation proceedings against third parties.

 

(f)            If any rights to any Patent,
Trademark, Copyright, Software or License relating thereto reasonably necessary
to the conduct of its business is believed infringed, misappropriated, breached
or diluted by a third party, such Loan Party shall notify the Senior Collateral
Agent promptly after it learns thereof and shall, unless such Loan Party shall
reasonably determine that any such action would be commercially unreasonable,
promptly sue for infringement, misappropriation, breach or dilution and to
recover any and all damages for such infringement, misappropriation or
dilution, and take such other actions as such Loan Party shall reasonably deem
appropriate under the circumstances to protect such Patent, Trademark,
Copyright, Software or License.

 

(g)           Within the time period specified in Section
6.01(i) and 6.12(b) of the Credit Agreement, each Loan Party will
(i) inform the Senior Collateral Agent of all applications for Patents,
Trademarks or Copyrights filed, acquired or registrations issued during such
fiscal quarter by such Loan Party or by any agent, employee, licensee or
delegate on its behalf with the United States Patent and Trademark Office or
the United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof and (ii) upon request of the Senior Collateral Agent,
execute any and all agreements, instruments, documents and papers as the Senior
Collateral Agent may request to evidence the Security Interests in such
application, any resulting Patent, Trademark or Copyright and the goodwill or
accounts and general intangibles of such Loan Party relating thereto or
represented thereby, and such Loan Party hereby appoints the Senior Collateral
Agent its attorney-in-fact to execute and file such writings for the foregoing
purposes.

 

(h)           As to all material Licenses
(excluding non-exclusive Licenses of Software) entered into after the date
hereof with any third party licensor, such Loan Party will use commercially
reasonable and good faith efforts to obtain all requisite consents or approvals
by the licensor to effect the assignment of all of such Loan Party’s right,
title and interest thereunder to the Senior Collateral Agent or its designee
and to effect the sub-license contemplated under Section 5.03(e) upon
and during the continuance of an Event of Default, and such Loan Party shall
provide prompt written notice to the Senior Collateral Agent upon failure to
obtain any such consent or approval.

 

(i)            Such Loan Party shall take all
actions (and cause all other Persons, including licensees, to the extent such
other Persons are subject to its control) which are necessary or reasonably
advisable to protect, preserve and maintain the validity, priority, perfection
or enforcement of the rights granted to the Senior Collateral Agent under this
Agreement and give the Senior Collateral Agent prompt written notice if, after
the date hereof, such Loan Party shall obtain rights to any Trademarks, Patents
or Copyrights (subject to the time periods specified in Section 4.11(g),
as applicable), or enter into any new license agreements regarding any of the
foregoing, and such Loan Party hereby agrees that the provisions of this
Agreement shall automatically apply thereto except were prohibited thereby
pursuant to a valid and enforceable restriction or Law.  Such Loan Party will use commercially
reasonable efforts so as not to permit the inclusion in any contract or
agreement governing or relating to any Trademarks, Patents or Copyrights
obtained after the date hereof or any license agreements entered into after the
date hereof relating to any of the foregoing of any provisions that could or
might in any way impair or prevent the creation of a security interest in, or
the assignment of, such Loan Party’s rights and interests therein, as
contemplated by Sections 2.01 and 2.02.  Such Loan Party will, upon request of the
Senior Collateral Agent, execute any and all agreements, instruments, documents
and papers as the Senior Collateral Agent may request to evidence the Security
Interest hereunder in any Patent, Trademark or Copyright (or application
therefor) and the goodwill or accounts and general intangibles of such Loan
Party relating 

 

26

 

thereto or
represented thereby, and such Loan Party hereby appoints the Senior Collateral
Agent its attorney-in-fact to execute and file such writings for the foregoing
purposes.

 

Section 4.12         Deposit Accounts and Securities Accounts.  Except as expressly contemplated by Section
4.01 hereof, no Loan Party shall establish after the date hereof or permit
to exist any Deposit Account (other than Exempt Deposit Accounts) credited at
any time with amounts in excess of $250,000 or any Securities Account (except
any such account maintained with the Senior Collateral Agent or constituting
Collateral Accounts) without promptly delivering to the Senior Collateral Agent
a fully executed Account Control Agreement with respect to such account.  Subject to Section 2.05(b) hereof
and the rights of the Senior Collateral Agent under Article V hereof,
each Loan Party shall cause all Proceeds of Collateral hereunder to be
deposited in a Deposit Account maintained with the Senior Collateral Agent or
with respect to which an effective Account Control Agreement has been delivered
to the Senior Collateral Agent.

 

Section 4.13         Electronic Chattel Paper.  Such Loan Party shall create, store and
otherwise maintain all records comprising electronic Chattel Paper in a manner
such that:  (i) a single authoritative copy
of each such record exists which is unique, identifiable and, except as
provided in clause (iv) below, unalterable, (ii) the authoritative copy
of each such record shall identify the Collateral Agents as assignees thereof,
(iii) the authoritative copy of each such record is communicated to and
maintained by the Applicable Collateral Agent or its designee, (iv) copies or
revisions that add or change any assignees of such record can be made only with
the participation of the Applicable Collateral Agent, (v) each copy (other than
the authoritative copy) of such record is readily identifiable as a copy and
(vi) any revision of the authoritative copy of such record is readily
identifiable as an authorized or unauthorized revision.

 

Section 4.14         Claims.  In the event any Claim constituting a
commercial tort claim in excess of $500,000 arises or otherwise becomes known
after the date hereof, the applicable Loan Party will deliver to the Senior
Collateral Agent a supplement to Schedule 1.01 hereto describing such
Claim and expressly subjecting such Claim, all Judgments and/or Settlements
with respect thereto and all Proceeds thereof to the Security Interest
hereunder.

 

Section 4.15         Letter-of-Credit-Rights.  If any Letter-of-Credit Rights are hereafter
acquired by any Loan Party, the applicable Loan Party will deliver or cause to
be delivered to the Applicable Collateral Agent a fully executed consent with
respect thereto substantially in the form of Exhibit D hereto or in such
other form as shall be reasonably acceptable to the Senior Collateral
Agent.  Absent the occurrence and
continuance of an Event of Default, the provisions of this Section 4.15
shall not apply to (i) Letter of Credit Rights arising in respect of
letters of credit having a face or stated amount of less than $1,000,000 or
(ii) letters of credit in respect of which a Loan Party, after using
commercially reasonable efforts, fails to obtain from the issuer of such letter
of credit the consent contemplated by the preceding sentence.

 

ARTICLE V

GENERAL AUTHORITY; REMEDIES

 

Section 5.01         General Authority.  Until such time as the Senior Obligations
shall have been paid in full (other than contingent indemnification
obligations) and until there is no commitment by any Senior Credit Party to
make further advances, incur obligations or otherwise give value, each Loan
Party hereby irrevocably appoints the Senior Collateral Agent and any officer
or agent thereof as its true and lawful attorney-in-fact, with full power of
substitution, in the name of such Loan Party, the Senior Collateral Agent, the
Senior Finance Parties or otherwise, for the sole use and benefit of the Senior
Collateral Agent and the Senior Finance Parties, but at such Loan Party’s
expense, to the extent permitted 

 

27

 

by Law, to
exercise at any time and from time to time while an Event of Default has
occurred and is continuing all or any of the following powers with respect to
all or any of the Collateral; such power, being coupled with an interest, is
irrevocable until the Senior Obligations are paid in full (other than
contingent indemnification obligations) and until there is no commitment by any
Senior Credit Party to make further advances, incur obligations or otherwise
give value:

 

(i)            to take any and all reasonably
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to carry out the terms of this Agreement;

 

(ii)           to receive, take, indorse, assign and
deliver any and all checks, notes, drafts, acceptances, documents and other
negotiable and non-negotiable Instruments taken or received by such Loan Party
as, or in connection with, Collateral;

 

(iii)          to accelerate any Receivable which may
be accelerated in accordance with its terms, and to otherwise demand, sue for,
collect, receive and give acquittance for any and all monies due or to become
due on or by virtue of any Collateral;

 

(iv)          to commence, settle, compromise,
compound, prosecute, defend or adjust any Claim, suit, action or proceeding
with respect to, or in connection with, the Collateral;

 

(v)           to sell, transfer, assign or
otherwise deal in or with the Collateral or the Proceeds or avails thereof,
including, without limitation, for the implementation of any assignment, lease,
License, sublicense, grant of option, sale or other disposition of any Patent,
Trademark, Copyright or Software or any action related thereto, as fully and
effectually as if the Senior Collateral Agent were the absolute owner thereof;

 

(vi)          to extend the time of payment of any
or all of the Collateral and to make any allowance and other adjustments with
respect thereto; and

 

(vii)         to do, at its option, but at the
expense of the Loan Parties, at any time or from time to time, all acts and
things which the Senior Collateral Agent deems reasonably necessary to protect
or preserve the Collateral and to realize upon the Collateral.

 

Section 5.02         Authority of the Senior Collateral Agent. 
Each Loan Party acknowledges that the rights and responsibilities of the
Senior Collateral Agent under this Agreement with respect to any action taken
by it or the exercise or non-exercise by the Senior Collateral Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Senior Collateral Agent and the other Finance Parties, be governed by the
Credit Agreement, the Intercreditor Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Senior Collateral Agent and the Loan Parties, the Senior Collateral Agent shall
be conclusively presumed to be acting as agent for the other Senior Finance
Parties with full and valid authority so to act or refrain from acting, and no
Loan Party shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.

 

Section 5.03         Remedies upon Event of Default.

 

(a)           If any Event of Default has occurred
and is continuing, the Senior Collateral Agent, upon being instructed to do so
by the Required Senior Lenders, may, in addition to all other rights and
remedies granted to it in this Agreement and in any other agreement securing,
evidencing or relating to the Senior Obligations (including without limitation,
the right to give instructions or a notice of sole 

 

28

 

control under
an Account Control Agreement, it being understood and agreed by the Loan
Parties and the Senior Collateral Agent that, notwithstanding the provisions of
any Account Control Agreement, the Senior Collateral Agent will not give a
notice of exclusive control under an Account Control Agreement or other similar
instruction except after the occurrence and during the continuance of an Event
of Default):  (i) exercise on behalf of
the Senior Finance Parties all rights and remedies of a secured party under the
UCC (whether or not in effect in the jurisdiction where such rights are
exercised) and, in addition, (ii) without demand of performance or other
demand or notice of any kind (except as herein provided or as may be required
by mandatory provisions of Law) to or upon any Loan Party or any other Person
(all of which demands and/or notices are hereby waived by each Loan Party), (A)
withdraw all cash and Liquid Investments in the Collateral Accounts and apply
such cash and Liquid Investments and other cash, if any, then held by it as
Collateral as specified in Section 5.05, (B) give notice and take sole
possession and control of all amounts on deposit in or credited to any Deposit
Account or Securities Account pursuant to the related Account Control Agreement
and apply all such funds as specified in Section 5.05 and (C) if there
shall be no such cash, Liquid Investments or other amounts or if such cash,
Liquid Investments and other amounts shall be insufficient to pay all the
Senior Obligations in full or cannot be so applied for any reason or if the
Senior Collateral Agent determines to do so, collect, receive, appropriate and
realize upon the Collateral and/or sell, assign, give an option or options to
purchase or otherwise dispose of and deliver the Collateral (or contract to do
so) or any part thereof at public or private sale, at any office of the Senior
Collateral Agent or elsewhere in such manner as is commercially reasonable and
as the Senior Collateral Agent may deem best, for cash, on credit or for future
delivery, without assumption of any credit risk and at such price or prices as
the Senior Collateral Agent may deem reasonably satisfactory.

 

(b)           If any Event of Default has occurred
and is continuing, the Senior Collateral Agent shall give each Loan Party not
less than 10 days’ prior notice of the time and place of any sale or other
intended disposition of any of the Collateral, except any Collateral which is
perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market. 
Any such notice shall (i) in the case of a public sale, state the time
and place fixed for such sale, (ii) in the case of a private sale, state the
day after which such sale may be consummated, (iii) contain the information
specified in Section 9-613 of the UCC, (iv) be authenticated and (v) be sent to
the parties required to be notified pursuant to Section 9-611(c) of the UCC; provided
that, if the Senior Collateral Agent fails to comply with this sentence in any
respect, its liability for such failure shall be limited to the liability (if
any) imposed on it as a matter of Law under the UCC.  The Senior Collateral Agent and each Loan
Party agree that such notice constitutes reasonable notification within the
meaning of Section 9-611 of the UCC. 
Except as otherwise provided herein, each Loan Party hereby waives, to
the extent permitted by applicable Law, notice and judicial hearing in
connection with the Senior Collateral Agent’s taking possession or disposition
of any of the Collateral.

 

(c)           The Senior Collateral Agent or any
Senior Finance Party may be the purchaser of any or all of the Collateral so
sold at any public sale (or, if the Collateral is of a type customarily sold in
a recognized market or is of a type which is the subject of widely distributed
standard price quotations, at any private sale).  Each Loan Party will execute and deliver such
documents and take such other action as the Senior Collateral Agent deems
necessary or reasonably advisable in order that any such sale may be made in
compliance with Law.  Upon any such sale,
the Senior Collateral Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold.  Each purchaser at any such sale shall hold
the Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind.  Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Senior Collateral Agent may fix in the notice of such
sale.  At any such sale, the Collateral
may be sold in one lot as an entirety or in separate parcels, as the Senior
Collateral Agent may determine.  The
Senior Collateral Agent shall not be obligated to make any such sale pursuant
to any such notice.  The Senior
Collateral Agent may, without notice or publication, adjourn any public or
private sale 

 

29

 

or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned without further notice.  In the case of any sale of all or any part of
the Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Senior Collateral Agent until the selling price is paid by the
purchaser thereof, but the Senior Collateral Agent shall not incur any
liability in the case of the failure of such purchaser to take up and pay for
the Collateral so sold and, in the case of any such failure, such Collateral
may again be sold upon like notice.

 

(d)           For the purpose of enforcing any and
all rights and remedies under this Agreement, the Senior Collateral Agent may,
if any Event of Default has occurred and is continuing, (i) require each Loan
Party to, and each Loan Party agrees that it will, at its expense and upon the
request of the Senior Collateral Agent, forthwith assemble, store and keep all
or any part of the Collateral as directed by the Senior Collateral Agent and
make it available at a place designated by the Senior Collateral Agent which
is, in the Senior Collateral Agent’s opinion, reasonably convenient to the
Senior Collateral Agent and such Loan Party, whether at the premises of such
Loan Party or otherwise, it being understood that such Loan Party’s obligation
so to deliver the Collateral is of the essence of this Agreement and that,
accordingly, upon application to a court of equity having jurisdiction, the
Senior Collateral Agent shall be entitled to a decree requiring specific
performance by such Loan Party of such obligation; (ii) to the extent permitted
by applicable Law, enter, with or without process of Law and without breach of
the peace, any premise where any of the Collateral is or may be located, and
without charge or liability to any Loan Party, seize and remove such Collateral
from such premises; (iii) have access to and use such Loan Party’s books and
records relating to the Collateral; and (iv) prior to the disposition of the
Collateral, store or transfer it without charge in or by means of any storage
or transportation facility owned or leased by such Loan Party, process, repair
or recondition it or otherwise prepare it for disposition in any manner and to
the extent the Senior Collateral Agent deems appropriate and, in connection
with such preparation and disposition, use without charge any Intellectual
Property or technical process used by such Loan Party.  The Senior Collateral Agent may also render
any or all of the Collateral unusable at any Loan Party’s premises and may
dispose of such Collateral on such premises without liability for rent or
costs.

 

(e)           Without limiting the generality of
the foregoing, if any Event of Default has occurred and is continuing:

 

(i)            the Senior Collateral Agent may,
subject to the express terms of any valid and enforceable restriction in favor
of a Person who is not a Group Company (other than Foreign Subsidiaries only in
connection with the Foreign IP Transfer Transaction or the Research and
Development Cost Sharing Agreement as permitted in the Credit Agreement) that
prohibits, or requires any consent or establishes any other conditions for, an
assignment thereof, license, or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any Patents,
Trademarks or Copyrights included in the Collateral throughout the world for
such term or terms, on such conditions and in such manner as the Senior
Collateral Agent shall in its sole discretion determine;

 

(ii)           the Senior Collateral Agent may
(without assuming any obligations or liability thereunder), at any time and
from time to time, enforce (and shall have the exclusive right to enforce)
against any Licensee or sublicensee all rights and remedies of any Loan Party
in, to and under any License and take or refrain from taking any action under
any provision thereof, and each Loan Party hereby releases the Senior
Collateral Agent and each of the Senior Finance Parties from, and agrees to
hold the Senior Collateral Agent and each of the Senior Finance Parties free
and harmless from and against any claims arising out of, any lawful action so
taken or omitted to be taken with respect thereto;

 

30

(iii)          upon request by the Senior Collateral
Agent, each Loan Party will use its commercially reasonable efforts to obtain
all requisite consents or approvals by the licensor or sublicensor of each
License to effect the assignment of all of such Loan Party’s right, title and
interest thereunder to the Senior Collateral Agent or its designee and will
execute and deliver to the Senior Collateral Agent a power of attorney, in form
and substance reasonably satisfactory to the Senior Collateral Agent, for the implementation
of any lease, assignment, License, sublicense, grant of option, sale or other
disposition of a Patent, Trademark or Copyright; and

 

(iv)          the Senior Collateral Agent may direct
any Loan Party to refrain, in which event each such Loan Party shall refrain,
from using or practicing any Trademark, Patent or Copyright in any manner
whatsoever, directly or indirectly, and shall, if requested by the Senior
Collateral Agent, change such Loan Party’s name to eliminate therefrom any use
of any Trademark and will execute such other and further documents as the
Senior Collateral Agent may request to further confirm this change and transfer
ownership of the Trademarks, Patents, Copyrights and registrations and any
pending applications therefor to the Senior Collateral Agent.

 

(f)            In the event of any disposition
following the occurrence and during the continuance of any Event of Default of
any Patent, Trademark or Copyright pursuant to this Article V, each Loan
Party shall supply its know-how and expertise relating to the manufacture and
sale of the products or services bearing Trademarks or the products, services
or works made or rendered in connection with or under Patents, Trademarks or
Copyrights, and its customer lists and other records relating to such Patents,
Trademarks or Copyrights and to the distribution of said products, services or
works, to the Senior Collateral Agent.

 

(g)           If any Event of Default has occurred
and is continuing, the Senior Collateral Agent, instead of exercising the power
of sale conferred upon it pursuant to this Section 5.03, may
proceed by a suit or suits at Law or in equity to foreclose the Security
Interest and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction, and may in addition
institute and maintain such suits and proceedings as the Senior Collateral
Agent may deem appropriate to protect and enforce the rights vested in it by
this Agreement.

 

(h)           If any Event of Default has occurred
and is continuing, the Senior Collateral Agent shall, to the extent permitted
by applicable Law, without notice to any Loan Party or any party claiming
through any Loan Party, without regard to the solvency or insolvency at such
time of any Person then liable for the payment of any of the Senior
Obligations, without regard to the then value of the Collateral and without
requiring any bond from any complainant in such proceedings, be entitled as a
matter of right to the appointment of a receiver or receivers (who may be the
Senior Collateral Agent) of the Collateral or any part thereof, and of the
profits, revenues and other income thereof, pending such proceedings, with such
powers as the court making such appointment shall confer, and to the entry of
an order directing that the profits, revenues and other income of the property
constituting the whole or any part of the Collateral be segregated, sequestered
and impounded for the benefit of the Senior Collateral Agent and the Senior
Finance Parties, and each Loan Party irrevocably consents to the appointment of
such receiver or receivers and to the entry of such order.

 

(i)            If any Event of Default has occurred
and is continuing, each Loan Party agrees, to the extent it may lawfully do so,
that it will not at any time in any manner whatsoever claim or take the benefit
or advantage of, any appraisal, valuation, stay, extension, moratorium,
turnover or redemption Law, or any Law permitting it to direct the order in
which the Collateral shall be sold, now or at any time hereafter in force which
may delay, prevent or otherwise affect the performance or enforcement of this
Agreement, and each Loan Party hereby waives all benefit or advantage of all
such Laws.  Each Loan Party covenants
that it will not hinder, delay or impede the execution of any power granted to
the Senior 

 

31

 

Collateral
Agent, the Administrative Agent or any other Senior Finance Party in any Senior
Finance Document.

 

(j)            If any Event of Default has occurred
and is continuing, each Loan Party, to the extent it may lawfully do so, on
behalf of itself and all who claim through or under it, including, without
limitation, any and all subsequent creditors, vendees, assignees and lienors,
waives and releases all rights to demand or to have any marshalling of the
Collateral upon any sale, whether made under any power of sale granted herein
or pursuant to judicial proceedings or under any foreclosure or any enforcement
of this Agreement, and consents and agrees that all of the Collateral may at
any such sale be offered and sold as an entirety.

 

(k)           If any Event of Default has occurred
and is continuing, each Loan Party waives, to the extent permitted by Law,
presentment, demand, protest and any notice of any kind (except the notices expressly
required hereunder or in the other Loan Documents) in connection with this
Agreement and any action taken by the Senior Collateral Agent with respect to
the Collateral.

 

Section 5.04         Limitation on Duty of the Senior Collateral
Agent in Respect of Collateral. 
Beyond the exercise of reasonable care in the custody thereof, neither
the Senior Collateral Agent nor any Senior Finance Party shall have any duty to
exercise any rights or take any steps to preserve the rights of any Loan Party
in the Collateral in its or their possession or control or in the possession or
control of any agent or bailee or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto, nor
shall the Senior Collateral Agent or any Senior Finance Party be liable to any
Loan Party or any other Person for failure to meet any obligation imposed by
Section 9-207 of the UCC or any successor provision.  Each Loan Party agrees that the Senior Collateral
Agent shall at no time be required to, nor shall the Senior Collateral Agent be
liable to any Loan Party for any failure to, account separately to any Loan
Party for amounts received or applied by the Senior Collateral Agent from time
to time in respect of the Collateral pursuant to the terms of this
Agreement.  Without limiting the
foregoing, the Senior Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Senior Collateral Agent accords its own property, and shall not be
liable or responsible for any loss or damage to any of the Collateral, or for
any diminution in the value thereof, by reason of the act or omission of any
warehouseman, carrier, forwarding agency, consignee or other agent or bailee
selected by the Senior Collateral Agent in good faith absent gross negligence
or willful misconduct.

 

Section 5.05         Application of Proceeds.

 

(a)           Priority
of Distributions.  The
proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held in the Collateral Accounts shall be paid over to
the Administrative Agent for application as provided in the Credit Agreement,
subject in all cases to the priorities set forth in Section 3.02 of the
Intercreditor Agreement.  The Senior
Collateral Agent may make distributions hereunder in cash or in kind or, on a
ratable basis, in any combination thereof.

 

(b)           Distributions
with Respect to Letters of Credit.  Each of the Loan Parties and the Finance
Parties agrees and acknowledges that if (after all outstanding Loans and L/C
Disbursements have been paid in full) the Lenders are to receive a distribution
on account of undrawn amounts with respect to Letters of Credit issued (or
deemed issued) under the Credit Agreement, such amounts shall be deposited in
the L/C Cash Collateral Account as cash security for the repayment of Senior
Credit Obligations owing to the Lenders as such.  Upon termination of all outstanding Letters
of Credit, all of such cash security shall be applied to the remaining Senior
Credit Obligations of the Lenders as such. 
If there remains any 

 

32

 

excess cash
security, such excess cash shall be withdrawn by the Senior Collateral Agent
from the L/C Cash Collateral Account and distributed in accordance with Section
5.05(a) hereof.

 

(c)           Reliance
by the Senior Collateral Agent. 
For purposes of applying payments received in accordance with this Section
5.05, the Senior Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the authorized
representative (the “Representative”) for the Swap Creditors for a
determination (which the Administrative Agent, each Representative for any Swap
Creditor and the Finance Parties agree (or shall agree) to provide upon request
of the Senior Collateral Agent) of the outstanding Credit Obligations and Swap
Obligations owed to the Finance Parties, and shall have no liability to any
Loan Party or any other Finance Party for actions taken in reliance on such
information except in the case of its gross negligence, bad faith or willful
misconduct.  Unless it has actual
knowledge (including by way of written notice from a Swap Creditor) to the
contrary, the Senior Collateral Agent, in acting hereunder, shall be entitled
to assume that no Swap Agreements are in existence.  All distributions made by the Senior
Collateral Agent pursuant to this Section shall be presumptively correct
(except in the event of manifest error, gross negligence or willful
misconduct), and the Senior Collateral Agent shall have no duty to inquire as
to the application by the Finance Parties of any amounts distributed to them.

 

(d)           Deficiencies.  It is understood that the Loan Parties shall
remain liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the amount of the Senior Obligations.

 

ARTICLE VI

SENIOR COLLATERAL AGENT

 

Section 6.01         Concerning the Senior Collateral Agent.  The provisions of Article IX of the
Credit Agreement shall inure to the benefit of the Senior Collateral Agent in
respect of this Agreement and shall be binding upon all Loan Parties and all
Senior Finance Parties and upon the parties hereto in such respect.  In furtherance and not in derogation of the
rights, privileges and immunities of the Senior Collateral Agent therein set
forth:

 

(i)            The Senior Collateral Agent is
authorized to take all such actions as are provided to be taken by it as Senior
Collateral Agent hereunder and all other action reasonably incidental
thereto.  As to any matters not expressly
provided for herein (including, without limitation, the timing and methods of
realization upon the Collateral), the Senior Collateral Agent shall act or
refrain from acting in accordance with written instructions from the Required
Senior Lenders or, in the absence of such instructions or provisions, in
accordance with its discretion.

 

(ii)           The Senior Collateral Agent shall not
be responsible for the existence, genuineness or value of any of the Collateral
or for the validity, perfection, priority or enforceability of the Security
Interest created hereunder in any of the Collateral, whether impaired by
operation of Law or by reason of any action or omission to act on its part
hereunder unless such action or omission constitutes gross negligence or
willful misconduct.  The Senior
Collateral Agent shall not have a duty to ascertain or inquire as to the performance
or observance of any of the terms of this Agreement by any Loan Party.

 

Section 6.02         Appointment of Co-Collateral Agent.  At any time or times, in order to comply with
any legal requirement in any jurisdiction, the Senior Collateral Agent may in
consultation with the Borrower and, unless an Event of Default shall have
occurred and be continuing, with the consent of the Borrower (not to be
unreasonably withheld or delayed) appoint another bank or trust company or one
or more other persons, either to act as co-agent or co-agents, jointly with the
Senior 

 

33

 

Collateral
Agent, or to act as separate agent or agents on behalf of the Senior Finance
Parties with such power and authority as may be necessary for the effectual
operation of the provisions hereof and may be specified in the instrument of
appointment (which may, in the discretion of the Senior Collateral Agent,
include provisions for the protection of such co-agent or separate agent
similar to the provisions of Section 6.01).  Notwithstanding any such appointment but only
to the extent not inconsistent with such legal requirements or, in the
reasonable judgment of the Senior Collateral Agent, not unduly burdensome to it
or any such co-agent, each Loan Party shall, so long as no Event of Default
shall have occurred and be continuing, be entitled to deal solely and directly
with the Senior Collateral Agent rather than any such co-agent in connection
with the Senior Collateral Agent’s rights and obligations under this Agreement.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.01         Notices.  (a)           Unless
otherwise expressly provided herein, all notices, and other communications
provided for hereunder shall be in writing (including by facsimile
transmission) and mailed, faxed or delivered, to the address, facsimile number
or (subject to subsection (b) below) electronic mail address
specified for notices:  (i) in the case
of Parent Holdings or any Subsidiary Guarantor, as set forth in Section 5.01
of the Guaranty; (ii) in the case of Holdings, the Borrower, the Administrative
Agent or any Lender, as specified in or pursuant to Section 10.01 of the
Credit Agreement; (iii) in the case of the Senior Collateral Agent, as set
forth in the signature pages hereto; (iv) in the case of any Swap Creditor as
set forth in any applicable Swap Agreement; or (v) in the case of any party, at
such other address as shall be designated by such party in a notice to the
Senior Collateral Agent and each other party hereto.  All such notices and other communications
shall be deemed to be given or made upon the earlier to occur of: (i) actual
receipt by the intended recipient and (ii) (A) if delivered by hand or by
courier, when signed for by the intended recipient; (B) if delivered by mail,
four Business Days after deposit in the mails, postage prepaid; (C) if
delivered by facsimile transmission, when sent and receipt has been confirmed
by telephone; and (D) if delivered by electronic mail (which form of delivery
is subject to the provisions of subsection (b) below), when
delivered.  Rejection or refusal to
accept, or the inability to deliver because of a changed address of which no
notice was given, shall not affect the validity of notice given in accordance
with this Section.

 

(b)           Except as expressly provided herein
or as may be agreed by the Administrative Agent in its sole discretion,
electronic mail and internet and intranet websites may be used only to
distribute routine communications, such as financial statements and other
information, and to distribute Finance Documents for execution by the parties
thereto, to distribute executed Loan Documents in Adobe PDF format and may not
be used for any other purpose.

 

Section 7.02         No Waivers; Non-Exclusive Remedies.  No failure or delay on the part of the Senior
Collateral Agent or any Senior Finance Party to exercise, no course of dealing
with respect to, and no delay in exercising, any right, power or privilege
under this Agreement or any other Finance Document or any other document or
agreement contemplated hereby or thereby and no course of dealing between the
Senior Collateral Agent or any Senior Finance Party and any of the Loan Parties
shall operate as a waiver thereof nor shall any single or partial exercise of
any such right, power or privilege hereunder or under any Finance 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 provided herein and in the other Finance
Documents are cumulative and are not exclusive of any other remedies provided
by Law.  Without limiting the foregoing,
nothing in this Agreement shall impair the right of any Senior Finance Party to
exercise any right of set-off or counterclaim it may have and to apply the
amount subject to such exercise to the payment of indebtedness of any Loan
Party other than its indebtedness under the Finance Documents.  Each Loan Party agrees, to the fullest extent
it may effectively do so under applicable Law, that any holder, as to which the
identity is disclosed, of a participation in a Senior Obligation, whether or 

 

34

 

not acquired
pursuant to the terms of any applicable Finance Document, may exercise rights
of set-off or counterclaim or other rights with respect to such participation
as fully as if such holder of a participation were a direct creditor of the
Loan Party in the amount of such participation.

 

Section 7.03         Compensation
and Expenses of the Senior Collateral Agent; Indemnification.

 

(a)           Expenses.  The Loan Parties, jointly and severally,
agree (i) to pay or reimburse the Senior Collateral Agent for all reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation and execution of this Agreement and any amendment, waiver, consent
or other modification of the provisions hereof (whether or not the transactions
contemplated hereby are consummated), and the consummation of the transactions
contemplated hereby, including all fees, disbursements and other charges of
Fried, Frank, Harris, Shriver & Jacobson LLP, counsel for the Senior
Collateral Agent, (ii) to pay or reimburse the Senior Collateral Agent and the
other Senior Finance Parties for all taxes which the Senior Collateral Agent or
any Senior Finance Party may be required to pay by reason of the security
interests granted in the Collateral (including any applicable transfer taxes)
or to free any of the Collateral from the lien thereof and (iii) to pay or
reimburse each Agent, any Representative of one or more Swap Creditors and each
other Senior Finance Party for all reasonable costs and expenses incurred in
connection with the enforcement, attempted enforcement or preservation of any
rights and remedies under this Agreement (including all such costs and expenses
incurred during any “workout” or restructuring in respect of the Senior
Obligations and during any legal proceeding, including any proceeding under any
Debtor Relief Law), including all reasonable fees and disbursements of counsel
(including the allocated charges of internal counsel); provided that the
Loan Parties shall not be required to reimburse the legal fees and expenses of
more than one outside counsel (in addition to up to one local counsel in each
applicable local jurisdiction) for all Persons indemnified under this clause
(iii) unless, in the written opinion of outside counsel reasonably
satisfactory to the Loan Parties and the Senior Collateral Agent,
representation of all such indemnified persons would be inappropriate due to
the existence of an actual or potential conflict of interest.  The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges
and fees and taxes related thereto, and other out-of-pocket expenses incurred
by any Agent and the costs of independent public accountants and other outside
experts retained by or on behalf of the Agents and the Finance Parties.  The agreements in this Section 7.03(a)
shall survive the termination of the Commitments and Swap Agreements and
repayment of all Senior Obligations.

 

(b)           Protection
of Collateral.  If any
Loan Party fails to comply with the provisions of  any Senior Finance Document, such that the
value of any Collateral or the validity, perfection, rank or value of the Security
Interest is thereby diminished or potentially diminished or put at risk, the
Senior Collateral Agent may, but shall not be required to, effect such
compliance on behalf of such Loan Party, and the Loan Parties shall reimburse
the Senior Collateral Agent for the out-of-pocket costs thereof within 10
Business Days of demand.  All insurance
expenses and all expenses of protecting, storing, warehousing, appraising,
handling, maintaining and shipping the Collateral, any and all excise,
property, sales and use taxes imposed by any state, federal or local authority
on any of the Collateral, or in respect of periodic appraisals and inspections
of the Collateral, or in respect of the sale or other disposition thereof shall
be borne and paid by the Loan Parties.  If
any Loan Party fails to promptly pay any portion thereof when due, the Senior
Collateral Agent may, at its option, but shall not be required to, pay the same
and charge the Loan Parties’ account therefor, and the Loan Parties agree to
reimburse the Senior Collateral Agent therefor on demand.  All sums so paid or incurred by the Senior
Collateral Agent for any of the foregoing and any and all other sums for which
any Loan Party may become liable hereunder and all costs and expenses
(including attorneys’ fees, legal expenses and court costs) reasonably incurred
by the Senior Collateral Agent in enforcing or protecting the Security Interest
or any of its rights or remedies 

 

35

 

under this
Agreement, shall, together with interest thereon until paid at the rate
applicable to Revolving Base Rate Loans plus 2%, be additional Senior
Obligations hereunder.

 

(c)           Indemnification.  Whether or not the transactions contemplated
hereby or by the other Senior Finance Documents are consummated, each Loan
Party, jointly and severally, agrees to indemnify, save and hold harmless the
Senior Collateral Agent, the Representative, each other Senior Finance Party
and their respective Affiliates, directors, officers, employees, counsel,
agents and, in the case of any Funds, trustees, advisors and attorneys-in-fact
and their respective successors and assigns (collectively, the “Indemnitees”)
from and against: (i) any and all claims, demands, actions or causes of action
that may at any time (including at any time following repayment of the Senior
Obligations and the resignation or removal of any Agent or Representative or
the replacement of any Senior Lender) be asserted or imposed against any
Indemnitee, arising out of or in any way relating to or arising out of the
manufacture, ownership, ordering, purchasing, delivery, control, acceptance,
lease, financing, possession, operation, condition, sale, return or other
disposition or use of the Collateral (including, without limitation, latent or
other defects, whether or not discoverable), the violation of the Laws of any
country, state or other Governmental Authority, or any tort (including, without
limitation, any claims, arising or imposed under the doctrine of strict
liability, or for or on account of injury to or the death of any Person
(including any Indemnitee), or property damage) or contract claim; (ii) any
administrative or investigative proceeding by any Governmental Authority
arising out of or related to a claim, demand, action or cause of action
described in clause (i) above; and (iii) any and all liabilities
(including liabilities under indemnities), losses, costs or expenses (including
fees and disbursements of counsel) that any Indemnitee suffers or incurs as a
result of the assertion of any foregoing claim, demand, action or cause of
action or proceeding, or as a result of the preparation of any defense in
connection with any foregoing claim, demand, action or cause of action or
proceeding, in all cases, and whether or not an Indemnitee is a party to such
claim, demand, action or cause of action, or proceeding; provided that
no Indemnitee shall be entitled to indemnification for any claim to the extent
such claim is determined by a court of competent jurisdiction in a final
non-appealable judgment to have been caused by its own gross negligence or
willful misconduct; and provided  further that the Loan Parties
shall not be required to reimburse the legal fees and expenses of more than one
outside counsel (in addition to up to one local counsel in each applicable
local jurisdiction) for all Indemnities unless, in the written opinion of
outside counsel reasonably satisfactory to the Loan Parties and the Senior
Collateral Agent, representation of all such Indemnitees would be inappropriate
due to the existence of an actual or potential conflict of interest.  In the case of an investigation, litigation
or other proceeding to which the indemnity in this Section 7.03(c)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnitee or any other Person or any
Indemnitee is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. 
Without prejudice to the survival of any other agreement of the Loan
Parties hereunder and under the other Senior Finance Documents, the agreements
and obligations of the Loan Parties contained in this Section 7.03(c)
shall survive the repayment of the Loans, L/C Obligations and other obligations
under the Senior Finance Documents and the termination of the Revolving and
Term B Commitments.  Any amounts paid by
any Indemnitee as to which such Indemnitee has a right to reimbursement
hereunder shall constitute Senior Obligations.

 

(d)           Contribution.  If and to the extent that the obligations of
any Loan Party under this Section 7.03 are unenforceable for any reason,
each Loan Party hereby agrees to make the maximum contribution to the payment
and satisfaction of such obligations which is permissible under applicable Law.

 

Section 7.04         Enforcement.  The Senior Finance Parties agree that this
Agreement may be enforced only by the action of the Senior Collateral Agent,
acting upon the instructions of the Required Senior Lenders (or, after the date
on which all Senior Credit Obligations (other than contingent 

 

36

 

indemnification
obligations) have been paid in full and all Commitments with respect thereto
terminated, the holders of at least 51% of the outstanding Swap Obligations)
and that no other Finance Party shall have any right individually to seek to
enforce this Agreement or to realize upon the security to be granted hereby, it
being understood and agreed that such rights and remedies may be exercised by
the Senior Collateral Agent or the holders of at least 51% of the outstanding
Swap Obligations, as the case may be, for the benefit of the Senior Finance
Parties upon the terms of this Agreement, the Intercreditor Agreement and the
other Senior Finance Documents.

 

Section 7.05         Amendments and Waivers.  Any provision of this Agreement may be
amended, changed, discharged, terminated or waived if, but only if, such
amendment or waiver is in writing and is signed by each Loan Party directly
affected by such amendment, change, discharge, termination or waiver (it being
understood that the addition or release of any Loan Party hereunder shall not
constitute an amendment, change, discharge, termination or waiver affecting any
Loan Party other than the Loan Party so added or released and it being further
understood and agreed that any supplement to Schedule 1.01 delivered
pursuant to Section 4.12 shall not require the consent of any Loan
Party) and (i) the Senior Collateral Agent (with the consent of the Required
Senior Lenders or, to the extent required by Section 10.01 of the Credit
Agreement, all or such lesser amount of the Lenders as may be specified
therein), at all times prior to the time on which all Senior Credit Obligations
have been paid in full (other than contingent indemnification obligations) and
all Commitments with respect thereto have been terminated, (ii) the holders of
more than 50% of all Swap Obligations then outstanding, at all times after the
time at which the Senior Credit Obligations have been paid in full (other than
contingent indemnification obligations) and all Commitments with respect
thereto have been terminated or (iii) the Second Lien Collateral Agent (with
the consent of the Required Second Lien Lenders) at all times after the time on
which all Senior Obligations have been paid in full (other than contingent
indemnification obligations); provided, however, that no such
amendment, change, discharge, termination or waiver shall be made to Section
5.05 hereof or this Section 7.05 without the consent of each Finance
Party adversely affected thereby except to the extent expressly provided in the
Intercreditor Agreement.

 

Section 7.06         Successors and Assigns.  This Agreement shall be binding upon each of
the parties hereto and inure to the benefit of the Senior Collateral Agent and
the Senior Finance Parties and their respective successors and permitted
assigns.  In the event of an assignment
of all or any of the Senior Obligations, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be transferred with such
indebtedness.  No Loan Party shall assign
or delegate any of its rights and duties hereunder without the prior written
consent of the Required Lenders or all of the Lenders as provided in Section
10.01 of the Credit Agreement.  Upon
the payment in full of the Senior Obligations (other than contingent
indemnification obligations), the rights of the Senior Collateral Agent (in its
capacity as collateral agent for the Senior Finance Parties other than in respect
of outstanding Letters of Credit and cash collateral provided in respect
thereof and for related fees, costs, indemnification and expenses) and the
rights of the Senior Finance Parties under this Agreement shall be deemed to
have been assigned, with the consent and at the direction of the Loan Parties,
to the Second Lien Collateral Agent for the benefit of the Second Lien Credit
Parties.

 

Section 7.07         Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE
EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTIONS OTHER THAN NEW
YORK ARE GOVERNED BY THE LAWS OF SUCH JURISDICTIONS.

 

37

 

Section 7.08         Limitation of Law; Severability.

 

(i)            All rights, remedies and powers
provided in this Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of Law, and all the
provisions of this Agreement are intended to be subject to all applicable
mandatory provisions of Law which may be controlling and be limited to the
extent necessary so that they will not render this Agreement invalid,
unenforceable in whole or in part, or not entitled to be recorded, registered
or filed under the provisions of any applicable Law.

 

(ii)           If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by
Law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of the Senior
Collateral Agent and the Senior Finance Parties in order to carry out the
intentions of the parties hereto as nearly as may be possible, and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provisions in any other
jurisdiction.

 

Section 7.09         Counterparts; Effectiveness.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective with
respect to each Loan Party when the Senior Collateral Agent shall receive
counterparts hereof executed by itself and such Loan Party.

 

Section 7.10         Additional Loan Parties.  It is understood and agreed that any
Subsidiary of Holdings that is required by any Loan Document to execute a
counterpart of this Agreement after the date hereof shall automatically become
a Loan Party hereunder with the same force and effect as if originally named as
a Loan Party hereunder by executing an instrument of accession or joinder
satisfactory in form and substance to the Senior Collateral Agent and
delivering the same to the Senior Collateral Agent.  Concurrently with the execution and delivery
of such instrument, such Subsidiary shall
take all such actions and deliver to the Senior Collateral Agent all such
documents and agreements as such Subsidiary
would have been required to deliver to the Senior Collateral Agent on or
prior to the date of this Agreement had such Subsidiary been a party hereto on the date of this
Agreement.  Such additional materials
shall include, among other things, supplements to Schedules 1.01, 3.05
and 4.01 hereto (which Schedules shall thereupon automatically be
amended and supplemented to include all information contained in such
supplements) such that, after giving effect to the joinder of such Subsidiary, each of Schedules 1.01,
3.05 and 4.01 hereto is true, complete and correct with respect
to such Subsidiary as of the
effective date of such accession.  The
execution and delivery of any such instrument of accession or joinder, and the
amendment and supplementation of the Schedules hereto as provided in the
immediately preceding sentence, shall not require the consent of any other Loan
Party hereunder.  The rights and
obligations of each Loan Party hereunder shall remain in full force and effect
notwithstanding the addition of any new Loan Party as a party to this
Agreement.

 

Section 7.11         Termination.  Upon the full payment and performance of all
Senior Obligations other than contingent indemnification obligations, the
cancellation or expiration of all outstanding L/C Obligations and Swap
Agreements and the termination of all Revolving and Term B Commitments under
the Loan Documents, the Security Interest created hereunder shall terminate and
all rights to the Collateral shall be deemed to have been assigned, with the
consent and at the direction of the Loan Parties, to the Second Lien Collateral
Agent for the benefit of the Second Lien Credit Parties.  In addition, at any time and from time to
time prior to such termination of such Security Interest, the Senior Collateral
Agent may release any of the Collateral as contemplated by the Credit Agreement
or the Intercreditor Agreement.  Upon any
such release of Collateral contemplated by the immediately preceding 

 

38

 

sentence, the
Senior Collateral Agent will, upon request by and at the expense of any Loan
Party, execute and deliver to such Loan Party such documents as such Loan Party
shall reasonably request to evidence the release of such Collateral.  Any such documents shall be without recourse
to or warranty by the Senior Collateral Agent or the Senior Finance
Parties.  The Senior Collateral Agent
shall have no liability whatsoever to any Senior Finance Party as a result of
any release of Collateral by it as permitted by this Section 7.11.  Upon any release of Collateral pursuant to
this Section 7.11, none of the Senior Finance Parties shall have any
continuing right or interest in such Collateral or the Proceeds thereof.

 

Section 7.12         Entire Agreement.  This Agreement and the other Loan Documents
and, in the case of the Swap Creditors, the Swap Agreements, constitute the
entire agreement and understanding among the parties hereto and supersede any
and all prior agreements and understandings, oral or written, and any
contemporaneous oral agreements and understandings relating to the subject
matter hereof and thereof.

 

[Signature
Pages Follow]

 

39

 

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

 

 

	
  LOAN PARTIES:

  	
   

  
	
   

  	
   

  
	
   

  	
  VERIFONE HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald C. Campion

  	
   

  
	
   

  	
   

  	
  Name: Donald C. Campion

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VERIFONE INTERMEDIATE HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald C. Campion

  	
   

  
	
   

  	
   

  	
  Name: Donald C. Campion

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VERIFONE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald C. Campion

  	
   

  
	
   

  	
   

  	
  Name: Donald C. Campion

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  COLLATERAL AGENT:

  	
  BANK OF
  AMERICA, N.A.,

  as Senior Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Thomas Barnett

  	
   

  
	
   

  	
   

  	
  Name: W. Thomas Barnett

  
	
   

  	
   

  	
  Title: Managing Director

  

 

40

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