Document:

exhibit10_4.htm

     

    
      
        

      

    

    Exhibit
      10.4

    
       

      CREE,
        INC.

       

      CHARLES
        SWOBODA EMPLOYMENT AGREEMENT

       

      As
        Amended and Restated Effective August 21, 2007

      

       

      Cree,
        Inc. (the “Company”) and Charles M. Swoboda (“Executive”) entered into an
        employment agreement (the “Agreement”) effective October 13, 2004 (the
“Effective Date”).  Cree and Executive hereby amend and restate the
        Agreement in its entirety (the “Revised Agreement”) in order to evidence formal
        compliance with Section 409A of the Internal Revenue Code of 1986, as amended
        (the “Code”), and the guidance thereunder (collectively “Section
        409A”).  The Revised Agreement is effective August  21, 2007
        (the “Amended Effective Date”).

       

      1.    Duties
        and Scope of Employment.

       

      (a)    Positions
        and Duties.  Executive will continue to serve as Chairman of the
        Board, President and Chief Executive Officer, reporting to the Company’s Board
        of Directors (the “Board”).  Executive will render such business and
        professional services in the performance of his duties, consistent with
        Executive’s positions within the Company, as will reasonably be assigned to him
        by the Board.  The period Executive is employed by the Company under
        this Revised Agreement is referred to herein as the “Employment
        Term”.

       

      (b)    Board
        Membership.  At each annual meeting of the Company’s stockholders
        during the Employment Term, the Company will nominate Executive to serve
        as a
        member of the Board.  Executive’s service as a member of the Board
        will be subject to any required stockholder approval.  While a member
        of the Board, Executive will be permitted to attend all meetings of the Board
        and executive sessions thereof, on substantially the same basis as other
        members
        of the Board, except as is prohibited by applicable law or listing
        standard.  Notwithstanding the preceding sentence, Executive will not
        have the right to attend any portion of a meeting or executive session where
        the
        item of discussion relates to Executive’s employment, including (but not limited
        to) his compensation, performance, and/or service on the Board.

       

      (c)    Obligations.  During
        the Employment Term, Executive will devote Executive’s full business efforts and
        time to the Company.  For the duration of the Employment Term,
        Executive agrees not to actively engage in any other employment, occupation,
        or
        consulting activity for any direct or indirect remuneration without the prior
        approval of the Board (which approval will not be unreasonably withheld);
        provided, however, that Executive may, without the approval of the Board,
        serve
        in any capacity with any civic, educational, or charitable organization,
        provided such services do not interfere with Executive’s obligations to
        Company.

       

      2.    At-Will
        Employment.  Executive and the Company agree that Executive’s
        employment with the Company constitutes “at-will”
employment.  Executive and the Company acknowledge that this
        employment relationship may be terminated at any time, upon written notice
        to
        the other party, with or without good cause or for any or no cause, at the
        option either of the Company or Executive.  However, as described in
        this Revised Agreement, Executive may be entitled to severance benefits
        depending upon the circumstances of termination of his
        employment.  Executive agrees to resign from his position as a member
        of the Board immediately following the termination of his employment if the
        Board so requests.

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3.    Term
        of Revised Agreement.  The Agreement had an initial term of three
        years commencing on the Effective Date.  This Revised Agreement is
        effective on the Amended Effective Date.  On each annual anniversary
        of the Effective Date thereafter, this Revised Agreement automatically will
        renew for an additional one-year term unless either party provides the other
        party with written notice of non-renewal at least 120 days prior to the date
        of
        automatic renewal.  Notwithstanding any contrary provision in this
        Section 3, in the event of a Change of Control during the Employment Term,
        this Revised Agreement will continue for not less than 12 months after the
        date
        of the Change of Control.

       

      4.    Compensation.

       

      (a)    Base
        Salary.  As of the Amended Effective Date, the Company will pay
        Executive an annual salary of $550,000.00 as compensation for his services
        (such
        annual salary, as is then effective, to be referred to herein as “Base
        Salary”).  The Base Salary will be paid periodically in accordance
        with the Company’s normal payroll schedule and practices and be subject to the
        usual, required withholdings.  Executive’s salary will be subject to
        review by the Compensation Committee of the Board (the “Committee”) not less
        than annually, and adjustments will be made in the discretion of the
        Compensation Committee.

       

      (b)    Annual
        Incentive.  Executive will be eligible to receive earned annual
        incentives payable for the achievement of performance goals established by
        the
        Committee.  Executive’s target annual incentive will be at least 70%
        of Base Salary, as determined by the Committee.  The actual earned
        incentive, if any, payable to Executive for any fiscal year of the Company
        will
        depend upon the extent to which the applicable performance goal(s) specified
        by
        the Committee are achieved and will be decreased or increased for under-
        or
        over-performance.  For each fiscal year of the Company, the Committee
        will endeavor to establish the applicable performance goal(s) no later than
        the
        90th day of the fiscal year to which the goals relate.  Executive will
        have the opportunity to discuss the nature of such performance goals with
        the
        Committee prior to such performance goals being established.  Except
        as specifically provided herein, Executive’s annual incentive will be subject to
        the terms and conditions of the Company’s annual incentive arrangement
        designated by the Committee for this purpose, including but not limited to
        payment date terms that are designed to cause the annual incentive to be
        exempt
        from or in compliance with Section 409A, continued employment obligations,
        and
        form of payment terms that may provide for payment in the form of common
        stock
        of the Company, except that, in the case of payments made in connection with
        a
        Termination of Employment, no part of any annual incentive payment may be
        made
        in the form of common stock.

       

      (c)    Long-Term
        Incentive.  Executive will be eligible to receive long-term
        incentives subject to terms and conditions established by the Committee,
        the
        underlying Cree, Inc. 2004 Long-Term Incentive Compensation Plan or any
        successor thereto, and the Committee’s terms and conditions for the applicable
        type of award, including vesting criteria such as continued service or
        performance objectives.

       

       

       

      
        
          
          

        

        
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      5.    Employee
        Benefits.  Executive will be eligible to participate in all
        Company employee benefit plans, policies, and arrangements that are applicable
        to other executive officers of the Company in accordance with the terms of
        such
        plans, policies, and arrangements as may exist from time to
        time.  Notwithstanding the preceding sentence, Executive’s eligibility
        for benefits (other than annual incentive, long-term incentives or other
        long-term compensation (whether payable in cash, stock, or otherwise), salary,
        or similar) will be at least as great as that of any other executive officer
        of
        the Company, provided, however, that (a) Executive will be eligible for any
        enhanced level of benefits that he approves only upon subsequent Committee
        approval, and (b) Executive will not be eligible for any extraordinary or
        unusual benefits provided to another executive officer as part of a negotiation
        for such executive officer to commence or continue employment.

       

      6.    Expenses.  The
        Company will reimburse Executive for reasonable travel, entertainment, and
        other
        expenses incurred by Executive in the furtherance of the performance of
        Executive’s duties hereunder, in accordance with the Company’s expense
        reimbursement policy as in effect from time to time.  To the extent
        that any such reimbursement does not qualify for exclusion from Federal income
        taxation, the Company will make the reimbursement only if the corresponding
        expense is incurred during the term of this Revised Agreement and the
        reimbursement is made on or before the last day of the calendar year following
        the calendar year in which the expense is incurred, the amount of expenses
        eligible for such reimbursement during a calendar year will not affect the
        amount of expenses eligible for such reimbursement in another calendar year,
        and
        the right to such reimbursement is not subject to liquidation or exchange
        for
        another benefit from the Company.

       

      7.    Termination
        of Employment.  In the event of Executive’s Termination of
        Employment with the Company, Executive will be entitled to any (a) unpaid
        Base Salary accrued up to the date of such Termination of Employment (the
        “Termination Date”) paid in accordance with the schedule specified in Section
        4(a) above, (b) any unpaid but earned and accrued annual incentive for any
        completed fiscal year as of his Termination Date paid in accordance with
        the
        payment terms and conditions specified in Section 4(b) above, (c) pay for
        accrued but unused vacation that the Company is legally obligated to pay
        Executive, which amount will be paid in the first regular payroll cycle
        occurring after the Termination Date or, if Executive is a Specified Employee
        of
        the Company on the Termination Date, such amount will be paid on the Six-Month
        Delay Payment Date to the extent required to satisfy Subsection
        409A(a)(2)(B)(i), (d) benefits or compensation as provided under the terms
        of any employee benefit and compensation agreements or plans applicable to
        Executive, (e) unreimbursed business expenses required to be reimbursed to
        Executive paid in accordance with Section 6 above, and (f) rights to
        indemnification Executive may have under the Company’s Articles of
        Incorporation, Bylaws, this Revised Agreement, or a separate indemnification
        agreement, as applicable.  In addition, if the Termination of
        Employment is initiated by the Company without Cause or by Executive for
        Good
        Reason, Executive will be entitled to the amounts and benefits specified
        in
        Section 8(a) or 8(b) below, as applicable.

       

       

       

      
        
          
          

        

        
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      8.    Severance.

       

      (a)    Termination
        Without Cause or Resignation for Good Reason other than in connection with
        a
        Change of Control.  If Executive’s Termination of Employment is
        initiated by the Company without Cause or by Executive for Good Reason, and
        the
        Termination of Employment is not in Connection with a Change of Control or
        by
        the Company due to the death or LTD Disability of the Executive, then, subject
        to Section 9, Executive will receive: (i) continued payment of Base
        Salary for the Continuance Period, paid in accordance with the schedule
        specified in Section 4(a) above except as provided in Section 8(d) below,
        (ii) a lump sum payment equal to twice the average of Executive’s earned
        annual incentives for the two most recently completed fiscal years immediately
        preceding the Termination Date, paid within ninety (90) days following the
        Termination Date except as provided in Section 8(d) below, (iii) a lump sum
        payment equal to 12 multiplied by the COBRA premium in effect for the type
        of
        medical, dental and vision coverage in effect for Executive (e.g., family
        coverage vs. employee-only coverage) at the time of his Termination of
        Employment, paid within ninety (90) days following the Termination Date except
        as provided in Section 8(d) below, and (iv) accelerated vesting with
        respect to 50% of Executive’s then outstanding, unvested stock options,
        restricted stock awards, and other equity awards other than performance units
        used to pay Executive’s annual incentive award.

       

      (b)    Termination
        Without Cause or Resignation for Good Reason in connection with a Change
        of
        Control.  If Executive’s Termination of Employment is initiated by
        the Company without Cause or by Executive for Good Reason, and the Termination
        of Employment is in Connection with a Change of Control but not by the Company
        in connection with the death or LTD Disability of the Executive, then, subject
        to Section 9, Executive will receive: (i) continued payment of Base
        Salary for the Continuance Period, paid in accordance with the schedule
        specified in Section 4(a) above except as provided in Section 8(d) below,
        (ii) a lump sum payment of an amount equal to Executive’s current target
        annual incentive, multiplied by a fraction, the numerator of which is the
        number
        of days elapsed starting on the first day of the fiscal year during which
        the
        Termination Date occurs and ending on the Termination Date and the denominator
        of which is 365, paid within sixty (60) days following the Termination Date
        except as provided in Section 8(d) below, (iii) a lump sum payment equal to
        twice the average of Executive’s earned annual incentives for the two most
        recently completed fiscal years immediately preceding the Termination Date,
        paid
        within ninety (90) days following the Termination Date except as provided
        in
        Section 8(d) below, (iv) a lump sum payment equal to 24 multiplied by the
        COBRA premium in effect for the type of medical, dental and vision coverage
        in
        effect for Executive (e.g., family coverage vs. employee-only coverage) at
        the
        time of his Termination of Employment, paid within ninety (90) days following
        the Termination Date except as provided in Section 8(d) below, and (v) full
        accelerated vesting with respect to Executive’s then outstanding, unvested stock
        options, restricted stock awards, and other equity awards other than performance
        units used to pay Executive’s annual incentive award.

       

      (c)    Section 280G
        Gross-up.  If any payment or benefit Executive receives pursuant
        to Section 8(b) of this Revised Agreement, or otherwise in Connection with
        a Change of Control, but determined without regard to any additional payment
        required under this Section 8(c), (collectively, the “Payment”) would
        (y) constitute a “parachute payment” within the meaning of
        Section 280G of the Code, and (z) be subject to the excise tax imposed
        by Section 4999 of the Code or any interest or penalties payable with
        respect to such excise tax (such excise tax, together with any such interest
        and
        penalties, are hereinafter collectively referred to as the “Excise Tax”), then
        Executive will be entitled to receive from the Company an additional payment
        (the “Gross-Up Payment,” and any iterative payments pursuant to this paragraph
        also will be “Gross-Up Payments”) in an amount that will fund the payment by
        Executive of any Excise Tax on the Payment, as well as all income and employment
        taxes on the Gross-Up Payment, any Excise Tax imposed on the Gross-Up Payment
        and any interest or penalties imposed with respect to income and employment
        taxes imposed on the Gross-Up Payment.  For this purpose, all income
        taxes will be assumed to apply to Executive at the highest marginal
        rate.

       

       

       

      
        
          
          

        

        
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      The
        accounting firm engaged by the Company for general audit purposes as of the
        day
        prior to the effective date of the Change of Control will perform the foregoing
        calculations.  If the accounting firm so engaged by the Company is
        also serving as accountant or auditor for the individual, entity or group
        which
        will control the Company upon the occurrence of a Change of Control, the
        Company
        will appoint a nationally recognized accounting firm other than the accounting
        firm engaged by the Company for general audit purposes to make the
        determinations required hereunder.  The Company will bear all expenses
        with respect to the determinations by such accounting firm required to be
        made
        hereunder.

       

      The
        accounting firm engaged to make the determinations hereunder will provide
        its
        calculations, together with detailed supporting documentation, to the Company
        and Executive within thirty (30) calendar days after the date on which such
        accounting firm has been engaged to make such determinations or such other
        time
        as requested by the Company or Executive; the Company shall engage such
        accounting firm, and the Company or Executive shall request such determination,
        on a schedule such that any Gross-Up Payment due to Executive under this
        Section
        8(c) is paid to Executive within the time period required by this Section
        8(c).  If the accounting firm determines that no Excise Tax is payable
        with respect to a Payment, it will furnish the Company and Executive with
        an
        opinion reasonably acceptable to Executive that no Excise Tax will be imposed
        with respect to such Payment.  Any reasonable good faith
        determinations of the accounting firm made hereunder will be final, binding,
        and
        conclusive upon the Company and Executive.

       

      If
        the
        Excise Tax is subsequently determined to be less than the amount taken into
        account hereunder at the time of Termination of Employment, Executive shall
        repay to the Company the portion of the Gross-Up Payment attributed to such
        reduction at the time the reduction in Excise Tax is finally
        determined.  If the Excise Tax is determined to exceed the amount
        taken into account hereunder at the time of Termination of Employment, the
        Company shall make an additional Gross-Up Payment to Executive in respect
        of
        such excess at the time the amount of such excess is finally
        determined.

       

      Executive
        shall notify the Company in writing of any claim by the Internal Revenue
        Service
        that, if successful, would require the payment by the Company of the Gross-Up
        Payment.  Such notification shall be given as soon as practicable but
        no later than ten (10) business days after Executive is informed in writing
        of
        such claim and shall apprise the Company of the nature of such claim and
        the
        date on which such claim is requested to be paid.  Executive shall not
        pay such claim prior to the expiration of the thirty (30) day period following
        the date on which he or she gives such notice to the Company (or such shorter
        period ending on the date that any payment of taxes with respect to such
        claim
        is due).  If the Company notifies Executive in writing prior to the
        expiration of such period that it desires to contest such claim, Executive
        shall:

       

       

       

      
        
          
          

        

        
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                  (a)

                	
                  give
                    the Company any information reasonably requested by the Company
                    relating
                    to such claim;

                   

                
	 	
                  (b)

                	
                  take
                    such action in connection with contesting such claim as the Company
                    shall
                    reasonably request in writing from time to time, including, without
                    limitation, accepting legal representation with respect to such
                    claim by
                    an attorney reasonably selected by the Company;

                   

                
	 	
                  (c)

                	
                  cooperate
                    with the Company in good faith in order to effectively contest
                    such claim;
                    and

                   

                
	 	
                  (d)

                	
                  permit
                    the Company to participate in any proceedings relating to such
                    claim;

                

        

      

       

      provided,
        however, that the Company shall bear and pay directly all costs and expenses
        (including legal and accounting fees and additional interest and penalties)
        incurred in connection with such contest and shall indemnify and hold Executive
        harmless, on an after-tax basis, for any Excise Tax, FICA tax, or income
        tax
        (including interest and penalties with respect thereto) imposed as a result
        of
        such representation and payment of costs and expenses.  Without
        limitation on the foregoing provisions of this Section 8(c), the Company
        shall
        control all proceedings taken in connection with such contest and, at its
        sole
        option, may pursue or forgo any and all administrative appeals, proceedings,
        hearings, and conferences with the taxing authority in respect of such claim
        and
        may, at its sole option, either direct Executive to pay the tax claimed and
        sue
        for a refund or contest the claim in any permissible manner, and Executive
        agrees to prosecute such contest to a determination before any administrative
        tribunal, in a court of initial jurisdiction, and in one or more appellate
        courts, as the Company shall determine; provided, however, that if the Company
        directs Executive to pay such claim and sue for a refund, the Company shall
        advance the amount of such payment to Executive, on an interest-free basis,
        and
        shall indemnify and hold Executive harmless, on an after-tax basis, from
        any
        Excise Tax or income tax (including interest or penalties with respect thereto)
        imposed with respect to such advance or with respect to any imputed income
        with
        respect to such advance; and provided, further, that any extension of the
        statute of limitations relating to payment of taxes for the taxable year
        of
        Executive with respect to which such contested amount is claimed to be due
        is
        limited solely to such contested amount.  Furthermore, the Company’s
        control of the contest shall be limited to issues with respect to which a
        Gross-Up Payment would be payable hereunder and Executive shall be entitled
        to
        settle or contest, as the case may be, other issues raised by the Internal
        Revenue Service or any other taxing authority.

       

      If
        any
        such claim referred to in this Section 8(c) is made by the Internal Revenue
        Service and the Company does not request Executive to contest the claim within
        the thirty (30) day period following notice of the claim, the Company shall
        pay
        to Executive the amount of any Gross-Up Payment owed to Executive, but not
        previously paid pursuant to this Section 8(c), immediately upon the expiration
        of such thirty (30) day period.  If any such claim is made by the
        Internal Revenue Service and the Company requests Executive to contest such
        claim, but does not advance the amount of such claim to Executive for purposes
        of such contest, the Company shall pay to Executive the amount of any Gross-Up
        Payment owed to Executive, but not previously paid under the provisions of
        this
        Section 8(c), within five (5) business days of a Final Determination of the
        liability of Executive for such Excise Tax.  For purposes of this
        Revised Agreement, a “Final Determination” shall be deemed to occur with respect
        to a claim when (i) there is a decision, judgment, decree, or other order
        by any
        court of competent jurisdiction, which decision, judgment, decree, or other
        order has become final, i.e., all allowable appeals pursuant to this Section
        8(c) have been exhausted by either party to the action, (ii) there is a closing
        agreement made under Section 7121 of the Code, or (iii) the time for instituting
        a claim for refund has expired, or if a claim was filed, the time for
        instituting suit with respect thereto has expired.

       

       

       

      
        
          
          

        

        
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      If,
        after
        the receipt by Executive of an amount advanced by the Company pursuant to
        this
        Section 8(c), Executive becomes entitled to receive any refund with respect
        to
        such claim, Executive shall (subject to the Company’s complying with the
        requirements of this Section 8(c) within five (5) business days of receiving
        any
        such refund pay to the Company the amount of such refund (together with any
        interest paid or credited thereon after taxes applicable thereto).  If
        after the receipt by Executive of an amount advanced by the Company pursuant
        to
        this Section 8(c), a determination is made by the Internal Revenue Service
        that
        Executive is not entitled to any refund with respect to such claim and the
        Company does not notify Executive in writing of its intent to contest such
        denial of refund prior to the expiration of thirty (30) days after the Company
        learns of such determination, then such advance shall be forgiven and shall
        not
        be required to be repaid and the amount of such advance shall offset, to
        the
        extent thereof, the net amount due Executive after payment of any Gross-Up
        Payment required to be paid.

       

      Notwithstanding
        the foregoing, (i) each Gross-Up Payment required to be made by the Company
        to
        Executive hereunder and each repayment of a Gross-Up Payment required to
        be made
        by Executive to the Company hereunder shall be paid as soon as feasible after
        the date that the Executive remits the taxes but no later than the end of
        the
        calendar year next following the calendar year in which Executive remits
        the
        corresponding taxes to the Internal Revenue Service, and (ii) each reimbursement
        of expenses related to a tax audit or litigation addressing the existence
        or
        amount of a tax liability required to be made by the Company to Executive
        hereunder and each repayment of such a reimbursement required to be made
        by
        Executive to the Company hereunder shall be paid as soon as feasible after
        the
        date that the Executive submits to the Company documentation supporting his
        payment of such amounts but no later than the end of the calendar year next
        following the calendar year in which Executive remits to the Internal Revenue
        Service the taxes that are the subject of the audit or litigation or, where
        as a
        result of the audit or litigation no taxes are due or are remitted but other
        reimbursable costs and/or expenses have been incurred, as soon as feasible
        after
        the date that the Executive submits to the Company documentation supporting
        his
        payment of such amounts but no later than the end of the calendar year following
        the calendar year in which the audit is completed or there is a Final
        Determination of the litigation.

       

       

       

      
        
          
          

        

        
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      (d)    Payment
        Delay in Event Executive is a Specified Employee.  If Executive is
        a Specified Employee on the Termination Date, the payments specified in
        subsections 8(a)(i), (ii) and (iii) above or subsections 8(b)(i), (ii), (iii)
        and (iv) above, as applicable, will be delayed until the Six-Month Delay
        Payment
        Date to the extent required to satisfy Subsection 409A(a)(2)(B)(i); on that
        date, the Company will pay Executive a lump sum consisting of all payments
        that
        would have been paid to Executive prior to the Six-Month Delay Payment Date
        had
        Executive not been a Specified Employee, increased for interest at the
        short-term Federal rate in effect on the Termination Date for the period
        beginning on the date each component of such lump sum would have been paid
        had
        Executive not been a Specified Employee and ending on the Six-Month Delay
        Payment Date.

       

      (e)    Voluntary
        Termination without Good Reason; Termination for Cause.  If
        Executive’s employment with the Company terminates voluntarily by Executive
        without Good Reason or is terminated for Cause by the Company, then, except
        as
        provided in Section 7, (i) all further vesting of Executive’s outstanding
        equity awards will terminate immediately, (ii) all payments of compensation
        by the Company to Executive hereunder will terminate immediately, and
        (iii) Executive will be entitled to receive benefits, including severance
        benefits, only in accordance with the Company’s then established plans,
        programs, and practices other than this Revised Agreement.

       

      (f)    Termination
        due to
        Death or LTD Disability.  If Executive’s employment is terminated
        by reason of his death or LTD Disability, then, except as provided in Section
        7,
        (i) Executive’s outstanding equity awards will terminate in accordance with
        the terms and conditions of the applicable award agreement(s); (ii) all
        payments of compensation by the Company to Executive hereunder will terminate
        immediately, and (iii) Executive will be entitled to receive benefits,
        including severance benefits, only in accordance with the Company’s then
        established plans, programs, and practices other than this Revised
        Agreement.

       

      (g)    Sole
        Right
        to Severance.  This Revised Agreement is intended to represent
        Executive’s sole entitlement to severance payments and benefits in connection
        with a termination of his employment, except for such payments and benefits
        to
        which Executive would be entitled as an employee of the Company in the absence
        of this Revised Agreement.

       

      9.    Conditions
        to Receipt of Severance; No Duty to Mitigate.

       

      (a)    Separation
        Agreement and Release of Claims.  The receipt of any severance
        pursuant to Section 8 will be subject to Executive signing and not revoking
        a separation agreement and release of claims in substantially the form attached
        as Exhibit A, but with any appropriate modifications, reflecting changes
        in applicable law, as are necessary or appropriate to provide the Company
        with
        the protection it would have if the release were executed as of the Effective
        Date.  No severance will be paid or provided until the separation
        agreement and release of claims becomes effective and has not been timely
        revoked in accordance with the terms thereof.

       

      (b)    Nondisparagement.  During
        the Employment Term and for the longer of (i) 12 months thereafter or
        (ii) the Continuance Period, Executive will not knowingly disparage,
        criticize, or otherwise make any derogatory statements regarding the Company,
        its directors, or its officers.  The foregoing restrictions will not
        apply to any statements that are made truthfully in response to a subpoena
        or
        other compulsory legal process.

       

       

       

      
        
          
          

        

        
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      (c)    Other
        Requirements.  Executive’s receipt of continued severance payments
        will be subject to Executive continuing to comply with the terms of the
        Confidential Information Agreement as amended by this Revised
        Agreement.

       

      (d)    No
        Duty to Mitigate.  Executive will not be required to mitigate the
        amount of any payment contemplated by this Revised Agreement, nor will any
        earnings that Executive may receive from any other source reduce any such
        payment.

       

      (e)    Generally
        Disabled; LTD Disability.  The provisions of this Section 9(e)
        will control in the event of conflict between this Section 9(e) and any other
        language in this Revised Agreement.  If Executive becomes Generally
        Disabled, the Company will not be in breach of this Revised Agreement and
        Executive will not be entitled to severance pursuant to Section 8 on account
        of
        the Committee, in its sole discretion, taking any action that would otherwise
        be
        considered Good Reason under items (i), (iii), or (iv) of the first paragraph
        of
        Section 10(g) below or under item (i) of the second paragraph of Section
        10(g)
        below provided that such action remains in effect only for so long as the
        Executive remains Generally Disabled.  If Executive is Generally
        Disabled for more than ninety-one (91) days (whether or not consecutive)
        in a
        rolling twelve (12) month period, the Company will not be in breach of this
        Revised Agreement and Executive will not be entitled to severance per Section
        8
        on account of the Committee permanently taking any action that would otherwise
        be considered Good Reason under items (i), (iii), or (iv) of the first paragraph
        of Section 10(g) below or under item (i) of the second paragraph of Section
        10(g) below so long as the Committee does not terminate Executive’s employment
        prior to the date that Executive is determined to have an LTD
        Disability.  If Executive is Generally Disabled and his employment is
        terminated prior to the date that he is determined to have an LTD Disability,
        such termination will be considered Termination without Cause.  If
        Executive ceases to be Generally Disabled before his employment is terminated
        by
        reason of LTD Disability, subject to the notice and cure provisions in Section
        10(g), Executive will have the right to terminate his employment for Good
        Reason
        on account of any event or circumstances that occurred while Executive was
        Generally Disabled that would otherwise have constituted Good Reason except
        for
        the provisions of this Section 9(e) unless such event or circumstances has
        already been cured by the Company or consented to by Executive.  In
        the event that Executive’s employment is terminated pursuant to either of the
        preceding two sentences, Executive will only be eligible for the severance
        benefits provided in Section 8(a), and under no circumstances will such
        termination be considered to be in connection with a Change in
        Control.

       

      10.    Definitions.

       

      (a)    Benefit
        Plans.  For purposes of this Revised Agreement, “Benefit Plans”
means plans, policies, or arrangements that the Company sponsors (or
        participates in) and that immediately prior to the Termination Date provide
        Executive, Executive’s spouse, and/or Executive’s eligible dependents with
        medical, dental, or vision benefits.  Benefit Plans do not include any
        other type of benefit (including, but not by way of limitation, financial
        counseling, disability, life insurance, or retirement benefits).

       

       

       

      
        
          
          

        

        
          -
            9
            -

          
            

          

        

        
          
          

        

      

       

      (b)    Cause.  For
        purposes of this Revised Agreement, “Cause” means (i) Executive’s willful
        and continued failure to perform the duties and responsibilities of his position
        that is not corrected within a thirty (30) day correction period that begins
        upon delivery to Executive of a written demand for performance from the Board
        that describes the basis for the Board’s belief that Executive has not
        substantially performed his duties; (ii) any act of personal dishonesty
        taken by Executive in connection with his responsibilities as an employee
        of the
        Company with the intention or reasonable expectation that such may result
        in
        substantial personal enrichment of Executive; (iii) Executive’s conviction
        of, or plea of nolo contendere to, a felony that the Board reasonably
        believes has had or will have a material detrimental effect on the Company’s
        reputation or business; or (iv) Executive materially breaching Executive’s
        Confidential Information Agreement as modified by this Revised Agreement,
        which
        breach is (if capable of cure) not cured within thirty (30) days after the
        Company delivers written notice to Executive of the breach.

       

      (c)    Change
        of Control.  For purposes of this Revised Agreement, “Change of
        Control” will have the same meaning as in Section 7.1 of the Cree, Inc.
        Equity Compensation Plan (as amended and restated August 5, 2002 and without
        regard to any subsequent amendments).

       

      (d)    Continuance
        Period.  For purposes of this Revised Agreement, “Continuance
        Period” means the period of time beginning on the Termination Date and ending on
        the later of (i) the date twenty-four (24) months following the Termination
        Date
        or (ii) the date that the term of this Revised Agreement otherwise
        expires.  Notwithstanding the preceding sentence, in the event of a
        termination of Executive’s employment where Executive is not entitled to
        severance under Section 8(a) or Section 8(b), the Continuance Period shall
        be of
        no duration.

       

      (e)    Generally
        Disabled.  For purposes of this Revised Agreement, “Generally
        Disabled” means that the Executive is unable to perform the material and
        substantial duties of his position due to illness or injury or physical or
        mental incapacity as determined by the Committee consistent with its obligations
        to the Company’s shareholders.

       

      (f)    Good
        Reason.  For purposes of this Revised Agreement, except as
        provided in Section 9(e) above, “Good Reason” means the occurrence of any of the
        following, without Executive’s consent: (i) a significant reduction of
        Executive’s duties or responsibilities, a change in Executive’s position as
        Chief Executive Officer or President, or the removal of Executive from any
        of
        such duties, positions, or responsibilities; (ii) a reduction in
        Executive’s Base Salary or target annual incentive level below 70% of Base
        Salary other than a one-time reduction that also is applied to substantially
        all
        other executive officers of the Company on Executive’s recommendation or
        approval if Executive’s reduction is substantially proportionate to, or no
        greater than, the reduction applied to substantially all other executive
        officers; (iii) the Company requiring Executive to report to anyone other
        than the Board of Directors; (iv) the Company eliminating from reporting to
        Executive any position that previously directly reported to Executive; or
        (v) the Company requiring Executive to relocate his principal place of
        business or the Company relocating its headquarters, in either case to a
        facility or location outside of a thirty-five (35) mile radius from Executive’s
        current principal place of employment; provided, however, that Executive
        only
        will have Good Reason if the event or circumstances constituting Good Reason
        specified in any of the preceding clauses is not cured within thirty (30)
        days
        after Executive gives written notice to the Board.  Executive’s
        actions approving any change, reduction, requirement, or occurrence in his
        role
        as Chief Executive Officer or a director (that otherwise may be considered
        Good
        Reason) will be considered consent for the purposes of this Good Reason
        definition.

       

       

       

      
        
          
          

        

        
          -
            10
            -

          
            

          

        

        
          
          

        

      

       

      In
        addition, except as provided in Section 9(e) above, “Good Reason” also means the
        occurrence of any of the following, without Executive’s express written consent,
        in Connection with a Change of Control:  (i) a substantial
        reduction by the Company of the facilities and perquisites (including office
        space and location) available to Executive provided such reduction is not
        applied to all executive officers of the Company; (ii) a material reduction
        in the kind or level of employee benefits to which Executive is entitled
        (other
        than a reduction due to application of the rules for eligibility or coverage
        under any benefit plan or policy) with the result that Executive’s overall
        benefits package is significantly reduced provided such reduction is not
        applied
        to substantially all executive officers of the Company; or (iii) the
        failure of the Company to obtain the assumption of this Revised Agreement
        by the
        successor (as defined in Section 14).

       

      (g)    In
        Connection with a Change of Control.  For purposes of this Revised
        Agreement, a Termination of Employment with the Company is “in Connection with a
        Change of Control” if Executive incurs a Termination of Employment within twelve
        (12) months following a Change of Control.

       

      (h)    LTD
        Disability.  For purposes of this Revised Agreement, “LTD
        Disability” will mean that the Executive is “Partially Disabled” or “Total
        Disabled” within the meaning of the Company’s current long-term disability plan
        (or such similar term or terms in any long-term disability plan of the Company
        that replaces its current long-term disability plan) and has satisfied the
        elimination period for benefits eligibility under such plan.

       

      (i)    Six-Month
        Delay Payment Date.  The payment date associated with the first
        regular payroll cycle after passage of six months following the Termination
        Date.

       

      (j)    Specified
        Employee.  For purposes of this Revised Agreement, “Specified
        Employee” will have the meaning prescribed by Subsection 409A(a)(2)(B)(i) of the
        Code, as such meaning may be amended from time to time.

       

      (k)    Termination
        of
        Employment.  For purposes of this Revised Agreement, “Termination
        of Employment” will have the meaning as prescribed by Treasury Regulation §
1.409A-1(h)(1)(ii), as such meaning may be amended from time to
        time.

       

      11.    Tax
        Treatment; Section 409A Compliance.  Executive acknowledges
        and agrees that the Company has made no representations as to the tax treatment
        of the compensation and benefits provided pursuant to this Revised
        Agreement. This
        Revised Agreement is intended to comply with the requirements of Section
        409A.  Nothing in this Revised Agreement shall requirement payment in
        2007 of any payment that was required to be paid after 2007 under the Agreement;
        in addition, except as may be required to observe the six-month delay applicable
        to Specified Employees under Subsection 409A(a)(2)(B)(i), nothing in this
        Revised Agreement shall postpone beyond 2007 any payment that was required
        to be
        paid in 2007 pursuant to the Agreement.  The parties agree to work
        together to effectuate the intent of this provision, including but not limited
        to revising the timing and/or form of any payment hereunder as may be permitted
        by and necessary to ensure the terms and conditions applicable to such payments
        comply with Section 409A.

       

       

       

      
        
          
          

        

        
          -
            11
            -

          
            

          

        

        
          
          

        

      

       

      12.    Indemnification.  Subject
        to applicable law, Executive will be provided indemnification to the maximum
        extent permitted by the Company’s bylaws and Certificate of Incorporation, with
        such indemnification to be on terms determined by the Board or any of its
        committees, but on terms no less favorable than provided to any other Company
        executive officer or director and subject to the terms of any separate written
        indemnification agreement.

       

      13.    Confidential
        Information.  Executive executed the Company’s standard form of
        Employee Agreement Regarding Confidential Information, Intellectual Property,
        and Noncompetition (Rev. NC 9-12-06) effective October 9, 2006 (the
“Confidential Information Agreement”); provided, however, that Executive agrees
        he will be subject to the noncompetition/nonsolicitation provision of such
        agreement (paragraph 11(a)) during the Employment Term and, except as provided
        in Section 21 hereof, until the later of (a) the date twelve (12) months
        following the Termination Date, or (b) the expiration of the Continuance
        Period.   For purposes of the foregoing, the term “Confidential
        Information Agreement” as used herein shall refer to the version of the
        agreement referenced above that is in effect as of Executive’s Termination
        Date.

       

      14.    Assignment.  This
        Revised Agreement will be binding upon and inure to the benefit of (a) the
        heirs, executors, and legal representatives of Executive upon Executive’s death,
        and (b) any successor of the Company.  Any such successor of the
        Company will be deemed substituted for the Company under the terms of this
        Revised Agreement for all purposes.  For this purpose, “successor”
means any person, firm, corporation, or other business entity which at any
        time,
        whether by purchase, merger, or otherwise, directly or indirectly acquires
        all
        or substantially all of the assets or business of the Company.  None
        of the rights of Executive to receive any form of compensation payable pursuant
        to this Revised Agreement may be assigned or transferred except by will or
        the
        laws of descent and distribution.  Any other attempted assignment,
        transfer, conveyance, or other disposition of Executive’s right to compensation
        or other benefits will be null and void.

       

      15.    Notices.  All
        notices, requests, demands, and other communications called for hereunder
        will
        be in writing and will be deemed given (a) on the date of delivery if
        delivered personally, (b) one business day after being sent overnight by a
        well-established commercial overnight service, or (c) four days after being
        mailed by registered or certified mail, return receipt requested, prepaid
        and
        addressed to the parties or their successors at the following addresses,
        or at
        such other addresses as the parties may later designate in writing:

       

       

       

      
        
          
          

        

        
          -
            12
            -

          
            

          

        

        
          
          

        

      

       

      If
        to the
        Company:

       

      Attn:
        Chairman of the Compensation Committee

      c/o
        Corporate Secretary

      Cree,
        Inc.

      4600
        Silicon Drive

      Durham,
        NC 27703

       

      If
        to
        Executive:

       

      at
        the
        last residential address known by the Company.

      

       

      16.    Severability.  If
        any provision hereof becomes or is declared by a court of competent jurisdiction
        to be illegal, unenforceable, or void, this Revised Agreement will continue
        in
        full force and effect without said provision.

       

      17.    Arbitration.  The
        Parties agree that any and all disputes arising out of the terms of this
        Revised
        Agreement, Executive’s employment by the Company, Executive’s service as an
        officer or director of the Company, or Executive’s compensation and benefits,
        their interpretation, and any of the matters herein released, will be subject
        to
        binding arbitration in Durham, North Carolina before the American Arbitration
        Association under its National Rules for the Resolution of Employment Disputes,
        supplemented by the North Carolina Rules of Civil Procedure.  The
        Parties agree that the prevailing party in any arbitration will be entitled
        to
        injunctive relief in any court of competent jurisdiction to enforce the
        arbitration award.  The Parties hereby agree to waive their
        right to have any dispute between them resolved in a court of law by a judge
        or
        jury.  This paragraph will not prevent either party from
        seeking injunctive relief (or any other provisional remedy) from any court
        having jurisdiction over the Parties and the subject matter of their dispute
        relating to Executive’s obligations under this Revised Agreement and the
        Confidential Information Agreement.

          

      18.    Legal
        and Tax Expenses.  The Company will reimburse Executive up to
$7,500.00 for
        reasonable legal and tax advice expenses incurred in 2007 by him in connection
        with the negotiation, preparation, and execution of this Revised Agreement;
        the
        Company will make such reimbursement as soon as administratively practicable
        after the date on which Executive substantiates to the Company in writing
        the
        amount of such expenses but in no event later than the last day of 2008;
        Executive must provide such written substantiation in time for the Company
        to
        make such reimbursement by the last day of 2008.  In addition, in the
        event of a dispute relating to any provision of the Agreement and/or this
        Revised Agreement arising during the term of Executive’s employment with the
        Company or within three (3) years following the termination of this Revised
        Agreement, the Company will reimburse Executive’s fees and expenses as incurred
        quarterly, including reasonable attorneys’ fees, in connection with such
        dispute, provided that (i) Executive provides the Company with written
        documentation substantiating the amount of such fees and expenses, and (ii)
        Executive prevails on at least one material issue in such dispute or an
        arbitrator does not determine that Executive’s legal positions were frivolous or
        without legal foundation.  The Company will make such reimbursement
        payments quarterly based on the written substantiation documentation submitted
        by Executive to the Company during the prior quarter; in no event will any
        reimbursement be made later than the end of the calendar year next following
        the
        calendar year in which the expense was incurred by Executive; Executive must
        provide such written substantiation in time for the Company to make such
        reimbursement by such deadline.  In the event Executive does not so
        prevail or in the event of a determination by the arbitrator that his legal
        positions were frivolous or without legal foundation (in either case, a
“Resolution”), Executive will repay to the Company any amounts previously
        reimbursed by it and Executive will reimburse the Company for its fees and
        expenses, including reasonable attorneys’ fees, incurred in connection with the
        dispute, both within a reasonable period of time not to exceed 60 days following
        the date of the Resolution.  The amount of expenses eligible for
        reimbursement under this Section 18 during a calendar year will not affect
        the
        amount of expenses eligible for reimbursement under this Section 18 in another
        calendar year, and the right to such reimbursement is not subject to liquidation
        or exchange for another benefit from the Company.

       

       

       

      
        
          
          

        

        
          -
            13
            -

          
            

          

        

        
          
          

        

      

       

      19.    Integration.  This
        Revised Agreement, together with the Confidential Information Agreement and
        the
        standard forms of equity award grant that describe Executive’s outstanding
        equity awards, represents the entire agreement and understanding between
        the
        parties as to the subject matter herein and supersedes all prior or
        contemporaneous agreements whether written or oral.  No waiver,
        alteration, or modification of any of the provisions of this Revised Agreement
        will be binding unless in a writing and is signed by duly authorized
        representatives of the parties hereto.

       

      20.    Waiver
        of Breach.  The waiver of a breach of any term or provision of
        this Revised Agreement, which must be in writing, will not operate as or
        be
        construed to be a waiver of any other previous or subsequent breach of this
        Revised Agreement.

       

      21.    Survival.  The
        Confidential Information Agreement, the Company’s and Executive’s
        responsibilities under Sections 7, 8 and 9, and Sections 12, 13, 17,
        and 18 will survive the termination of this Revised
        Agreement.  Notwithstanding the preceding sentence, in the event this
        Revised Agreement expires because the Company delivers notice of non-renewal
        of
        the term of this Revised Agreement pursuant to Section 3, the amendment of
        the
        Confidential Information Agreement provided by Section 13 will expire as
        of the
        expiration of the term of this Revised Agreement.

       

      22.    Headings.  All
        captions and Section headings used in this Revised Agreement are for convenient
        reference only and do not form a part of this Revised Agreement.

       

      23.    Tax
        Withholding.  All payments made pursuant to this Revised Agreement
        will be subject to withholding of applicable taxes.

       

      24.    Governing
        Law.  This Revised Agreement will be governed by the laws of the
        State of North Carolina (with the exception of its conflict of laws
        provisions).

       

       

       

      
        
          
          

        

        
          -
            14
            -

          
            

          

        

        
          
          

        

      

       

      25.    Acknowledgment.  Executive
        acknowledges that he has had the opportunity to discuss this matter with
        and
        obtain advice from his private attorney, has had sufficient time to, and
        has
        carefully read and fully understands all the provisions of this Revised
        Agreement, and is knowingly and voluntarily entering into this Revised
        Agreement.

       

      26.    Counterparts.  This
        Revised Agreement may be executed in counterparts, and each counterpart will
        have the same force and effect as an original and will constitute an effective,
        binding agreement on the part of each of the undersigned.

       

       

      IN
        WITNESS WHEREOF, each of the parties has executed this Revised Agreement,
        in the
        case of the Company by a duly authorized officer, as of the day and year
        written
        below.

       

      
        	COMPANY:	 	 	 
	 	 	 	 
	CREE,
                INC.	 	 	 
	   	 	 	   
	   	 	 	   
	/s/
                Thomas H. Werner	 	Date: 	
                August
                  21, 2007

              
	Thomas
                H. Werner	 	 	 
	Compensation
                Committee Chairman	 	 	 

      

       

       

       

      
        	EXECUTIVE:	 	 	 
	   	 	 	   
	   	 	 	   
	/s/
                Charles M. Swoboda	 	Date: 	
                August
                  21, 2007

              
	Charles
                M. Swoboda	 	 	 

      

       

       

       

      

       

      

      

      CGS-B715-9

      
        
          
          

        

        
          -
            15
            -Execution Version 	 

REGAL-BELOIT
CORPORATION 

$150,000,000 Floating
Rate Series 2007A Senior Notes, Tranche A, 
due August 23, 2014 

$100,000,000 Floating Rate
Series 2007A Senior Notes, Tranche B, 
due August 23, 2017 

     _________________ 

NOTE PURCHASE AGREEMENT 

     _________________ 

DATED AS OF
AUGUST 23, 2007 

TABLE OF CONTENTS 

	SECTION	HEADING	PAGE
	
SECTION 1.	AUTHORIZATION OF NOTES	1 
			
	
  Section 1.1.	Description of Notes	1 
	  Section 1.2.	Interest Rate	2 
			
	
SECTION 2.	SALE AND PURCHASE OF NOTES	3 
			
	
  Section 2.1.	Series 2007A Notes	3 
	  Section 2.2.	Additional Series of Notes	3 
	  Section 2.3.	Subsidiary Guaranty	5 
			
	
SECTION 3.	CLOSING	5 
			
			
	
SECTION 4.	CONDITIONS TO CLOSING	6 
			
	
  Section 4.1.	Representations and Warranties	6 
	  Section 4.2.	Performance; No Default	6 
	  Section 4.3.	Compliance Certificates	6 
	  Section 4.4.	Opinions of Counsel	7 
	  Section 4.5.	Purchase Permitted By Applicable Law, Etc.	7 
	  Section 4.6.	Sale of Other Notes	7 
	  Section 4.7.	Payment of Special Counsel Fees	7 
	  Section 4.8.	Private Placement Number	7 
	  Section 4.9.	Changes in Corporate Structure	7 
	  Section 4.10.	Subsidiary Guaranty	8 
	  Section 4.11.	Funding Instructions	8 
	  Section 4.12.	Proceedings and Documents	8 
	  Section 4.13.	Notice of Floating Interest Rate	8 
	  Section 4.14.	Intercreditor Agreement	8 
			
	
SECTION 5.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	8 
			
	
  Section 5.1.	Organization; Power and Authority	8 
	  Section 5.2.	Authorization, Etc.	8 
	  Section 5.3.	Disclosure	9 
	  Section 5.4.	Organization and Ownership of Shares of Subsidiaries; Affiliates	9 
	  Section 5.5.	Financial Statements; Material Liabilities	10 
	  Section 5.6.	Compliance with Laws, Other Instruments, Etc.	10 
	  Section 5.7.	Governmental Authorizations, Etc.	10 
	  Section 5.8.	Litigation; Observance of Agreements, Statutes and Orders	11 
	  Section 5.9.	Taxes	11 
	  Section 5.10.	Title to Property; Leases	11 
	  Section 5.11.	Licenses, Permits, Etc.	11 

-i- 

			
	  Section 5.12.	Compliance with ERISA	12 
	  Section 5.13.	Private Offering by the Company	13 
	  Section 5.14.	Use of Proceeds; Margin Regulations	13 
	  Section 5.15.	Existing Debt; Future Liens	13 
	  Section 5.16.	Foreign Assets Control Regulations, Etc.	14 
	  Section 5.17.	Status under Certain Statutes	14 
	  Section 5.18.	Environmental Matters	14 
	  Section 5.19.	Notes Rank Pari Passu	15 
	
SECTION 6.	REPRESENTATIONS OF THE PURCHASER	15 
	
  Section 6.1.	Purchase for Investment	15 
	  Section 6.2.	Accredited Investor	15 
	  Section 6.3.	Source of Funds	16 
	
SECTION 7.	INFORMATION AS TO COMPANY	17 
	
  Section 7.1.	Financial and Business Information	17 
	  Section 7.2.	Officer's Certificate	20 
	  Section 7.3.	Visitation	20 
	
SECTION 8.	PAYMENT OF THE NOTES	21 
	
  Section 8.1.	Required Prepayments	21 
	  Section 8.2.	Optional Prepayments with Prepayment Premium	21 
	  Section 8.3.	Allocation of Partial Prepayments	22 
	  Section 8.4.	Maturity; Surrender, Etc.	22 
	  Section 8.5.	Purchase of Notes	22 
	  Section 8.6.	Change in Control	23 
	
SECTION 9.	AFFIRMATIVE COVENANTS	25 
	
  Section 9.1.	Compliance with Law	25 
	  Section 9.2.	Insurance	25 
	  Section 9.3.	Maintenance of Properties	25 
	  Section 9.4.	Payment of Taxes	26 
	  Section 9.5.	Corporate Existence, Etc.	26 
	  Section 9.6.	Notes to Rank Pari Passu	26 
	  Section 9.7.	Subsidiary Guarantors	26 
	  Section 9.8.	Books and Records	27 
	  Section 9.9.	Intercreditor Agreement	27 
	
SECTION 10.	NEGATIVE COVENANTS	27 
	
  Section 10.1.	Consolidated Debt to Consolidated EBITDA	27 
	  Section 10.2.	Interest Coverage Ratio	27 
	  Section 10.3.	Subsidiary Debt	28 
	  Section 10.4.	Securitization Obligations	28 
	  Section 10.5.	Limitation on Liens	29 

-ii- 

			
	  Section 10.6.	Sale of Assets	31 
	  Section 10.7.	Merger and Consolidation	32 
	  Section 10.8.	Transactions with Affiliates	33 
	  Section 10.9.	Terrorism Sanctions Regulations	34 
	  Section 10.10.	Non-Guarantor Domestic Subsidiaries	34 
	  Section 10.11.	Most Favored Lender's Covenant	34 
	
SECTION 11.	EVENTS OF DEFAULT	35 
	
SECTION 12.	REMEDIES ON DEFAULT, ETC.	37 
	
  Section 12.1.	Acceleration	37 
	  Section 12.2.	Other Remedies	38 
	  Section 12.3.	Rescission	38 
	  Section 12.4.	No Waivers or Election of Remedies, Expenses, Etc.	38 
	
SECTION 13.	REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES	39 
	
  Section 13.1.	Registration of Notes	39 
	  Section 13.2.	Transfer and Exchange of Notes	39 
	  Section 13.3.	Replacement of Notes	39 
	
SECTION 14.	PAYMENTS ON NOTES	40 
	
  Section 14.1.	Place of Payment	40 
	  Section 14.2.	Home Office Payment	40 
	
SECTION 15.	EXPENSES, ETC.	41 
	
  Section 15.1.	Transaction Expenses	41 
	  Section 15.2.	Survival	41 
	
SECTION 16.	SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT	41 
	
SECTION 17.	AMENDMENT AND WAIVER	42 
	
  Section 17.1.	Requirements	42 
	  Section 17.2.	Solicitation of Holders of Notes	43 
	  Section 17.3.	Binding Effect, Etc.	43 
	  Section 17.4.	Notes Held by Company, Etc.	43 
	
SECTION 18.	NOTICES	44 
	
SECTION 19.	REPRODUCTION OF DOCUMENTS	44 
	
SECTION 20.	CONFIDENTIAL INFORMATION	45 

-iii- 

			
	SECTION 21.	SUBSTITUTION OF PURCHASER	46 
	
SECTION 22.	MISCELLANEOUS	46 
	
  Section 22.1.	Successors and Assigns	46 
	  Section 22.2.	Payments Due on Non-Business Days	46 
	  Section 22.3.	Accounting Terms	47 
	  Section 22.4.	Severability	47 
	  Section 22.5.	Construction	47 
	  Section 22.6.	Counterparts	47 
	  Section 22.7.	Governing Law	47 
	  Section 22.8.	Jurisdiction and Process; Waiver of Jury Trial	47 
	  Section 22.9.	Subordination of Indenture	48 

-iv- 

			
	SCHEDULE A	--	INFORMATION RELATING TO PURCHASERS
	
SCHEDULE B	--	DEFINED TERMS
	
SCHEDULE 4.9	--	Changes in Corporate Structure
	
SCHEDULE 5.4	--	Subsidiaries of the Company, Ownership of Subsidiary Stock, Affiliates
	
SCHEDULE 5.5	--	Financial Statements
	
SCHEDULE 5.8(a)	--	Litigation
	
SCHEDULE 5.11	--	Licenses, Permits, Etc.
	
SCHEDULE 5.15	--	Existing Debt
	
SCHEDULE 10.3	--	Subsidiary Debt
	
SCHEDULE 10.5	--	Existing Liens
	
EXHIBIT 1(a)	--	Form of Floating Rate Series 2007A Senior Notes, Tranche A, due August 23, 2014
	
EXHIBIT 1(b)	--	Form of Floating Rate Series 2007A Senior Notes, Tranche B, due August 23, 2017
	
EXHIBIT 2.3	--	Form of Subsidiary Guaranty
	
EXHIBIT 3	--	Form of Intercreditor Agreement
	
EXHIBIT 4.4(a)	--	Form of Opinion of General Counsel to the Company
	
EXHIBIT 4.4(b)	--	Form of Opinion of Special Counsel to the Company
	
EXHIBIT 4.4(c)	--	Form of Opinion of Special Counsel to the Purchasers
	
EXHIBIT S	--	Form of Supplement to Note Purchase Agreement

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REGAL-BELOIT
CORPORATION 
200 State Street 
Beloit, WI 53511 

$150,000,000 Floating
Rate Series 2007A Senior Notes, Tranche A, 
due August 23, 2014 

$100,000,000 Floating Rate
Series 2007A Senior Notes, Tranche B, 
due August 23, 2017 

Dated as of 
August 23, 2007 

TO THE PURCHASERS LISTED IN 

            THE ATTACHED SCHEDULE A:  

Ladies and Gentlemen: 

        REGAL-BELOIT
CORPORATION, a Wisconsin corporation (the “Company”), agrees with the
Purchasers listed in the attached Schedule A (the “Purchasers”) to
this Note Purchase Agreement (this “Agreement”) as follows: 

     SECTION 1.    
          AUTHORIZATION OF NOTES. 

         Section 1.1.       
          Description of Notes. The Company will authorize the issue and sale of
          the following Senior Notes: 

	ISSUE	SERIES AND/OR

TRANCHE	AGGREGATE

PRINCIPAL

AMOUNT	INTEREST RATE	MATURITY DATE
	
 	 	 	 	 
	Senior Notes	Series 2007A,
Tranche A	$150,000,000 	Floating Rate	August 23, 2014
	
 	 	 	 	 
	Senior Notes	Series 2007A, 
Tranche B	$100,000,000 	Floating Rate	August 23, 2017

        The
Senior Notes described above are individually referred to respectively as the
“Tranche A Notes” and the “Tranche B Notes”, and are
collectively referred to as the “Series 2007A Notes”. The Series 2007A
Notes described above together with each Series of Additional Notes which may from time to
time be issued pursuant to the provisions of Section 2.2 are collectively referred to
as the “Notes” (such term shall also include any such notes issued in
substitution therefor pursuant to Section 13 of this Agreement). The Tranche A Notes
and the Tranche B Notes shall be substantially in the form set out in Exhibit 1(a)
and Exhibit 1(b), respectively, with such changes therefrom, if any, as may be
approved by the Purchasers and the Company. Certain capitalized terms used in this
Agreement are defined in Schedule B; references to a “Schedule” or an
“Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached
to this Agreement. 

         Section 1.2.       
          Interest Rate. (a)(i) The Series 2007A Notes shall bear
          interest (computed on the basis of a 360-day year and actual days elapsed) on
          the unpaid principal thereof from the date of issuance at a floating rate equal
          to the Adjusted LIBOR Rate from time to time, payable quarterly on the 23rd day
          of February, May, August and November in each year and at maturity, commencing
          on November 23rd, 2007, until such principal sum shall have become due and
          payable (whether at maturity, upon notice of prepayment or otherwise) (each such
          date being referred to herein as an “Interest Payment Date”)
          and interest (so computed) on any overdue principal or interest or Prepayment
          Premium or LIBOR Breakage Amount from the due date thereof (whether by
          acceleration or otherwise) and, during the continuance of an Event of Default,
          on the unpaid balance hereof, at the applicable Default Rate until paid. 

         (ii)       
          The Adjusted LIBOR Rate for the respective tranche of Series 2007A Notes
          shall be determined by the Company, and notice thereof shall be given to the
          holders of the Series 2007A Notes, within three Business Days after the
          beginning of each Interest Period, together with a copy of the relevant screen
          used for the determination of LIBOR, a calculation of Adjusted LIBOR Rate for
          such Interest Period, the number of days in such Interest Period, the date on
          which interest for such Interest Period will be paid and the amount of interest
          to be paid to each holder of Series 2007A Notes on such date. In the event
          that the holders of more than 50% in aggregate outstanding principal amount of
          any of the Tranche A Notes or Tranche B Notes do not concur with such
          determination by the Company, within ten Business Days after receipt by such
          holders of the notice delivered by the Company pursuant to the immediately
          preceding sentence, such holders of the Tranche A Notes or Tranche B Notes, as
          the case may be, shall provide notice to the Company, together with a copy of
          the relevant screen used for the determination of LIBOR, a calculation of
          Adjusted LIBOR Rate for such Interest Period, the number of days in such
          Interest Period, the date on which interest for such Interest Period will be
          paid and the amount of interest to be paid to each holder of Tranche A
          Notes or Tranche B Notes on such date, as the case may be, and any such
          determination made in accordance with the provisions of this Agreement, shall be
          presumptively correct absent manifest error. 

         (b)       
          If, during a Transition Period, the Consolidated Debt to Consolidated EBITDA
          ratio exceeds 3.75 to 1.00, as evidenced by an Officer’s Certificate
          delivered pursuant to Section 7.2(a), the applicable per annum interest
          rate payable on the Notes shall be increased by 0.25%, commencing on the first
          day of the first fiscal quarter following the fiscal quarter in respect of which
          such Certificate was delivered and continuing until the Company has provided an
          Officer’s Certificate pursuant to Section 7.2(a) demonstrating that, as of
          the end of the fiscal quarter in respect of which such Certificate is delivered,
          the Consolidated Debt to Consolidated EBITDA ratio is not more than 3.75 to
          1.0.  Following delivery of an Officer’s Certificate demonstrating
          that the Consolidated Debt to Consolidated EBITDA ratio did not exceed 3.75 to
          1.0, the additional 0.25% interest shall cease to accrue or be payable for any
          fiscal quarter subsequent to the fiscal quarter in respect of which such
          Certificate is delivered. 

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     SECTION 2.    
          SALE AND PURCHASE OF NOTES. 

         Section 2.1.       
          Series 2007A Notes. Subject to the terms and conditions of this
          Agreement, the Company will issue and sell to each Purchaser and each Purchaser
          will purchase from the Company, at the Closing provided for in Section 3,
          the Series 2007A Notes in the principal amount specified opposite such
          Purchaser’s name in Schedule A at the purchase price of 100% of the
          principal amount thereof. The obligations of each Purchaser hereunder are
          several and not joint obligations and no Purchaser shall have any obligation or
          any liability to any Person for the performance or nonperformance by any other
          Purchaser hereunder. 

         Section 2.2.       
          Additional Series of Notes. The Company may, from time to time, in
          its sole discretion but subject to the terms hereof, issue and sell one or more
          additional Series of its unsecured promissory notes under the provisions of this
          Agreement pursuant to a supplement (a “Supplement”)
          substantially in the form of Exhibit S, provided that the aggregate
          principal amount of all Additional Notes (as defined below) issued pursuant to
          all Supplements in accordance with the terms of this Section 2.2, when
          added together with the original aggregate principal amount of the
          Series 2007A Notes, shall not exceed $600,000,000. Each additional Series
          of Notes (the “Additional Notes”) issued pursuant to a
          Supplement shall be subject to the following terms and conditions: 

		    (i)                             each
Series of Additional Notes, when so issued, shall be differentiated from
               all previous Series by sequential alphabetical designation inscribed
thereon;  

		    (ii)                             Additional
Notes of the same Series may consist of more than one different and
               separate tranches and may differ with respect to outstanding principal
amounts,                maturity dates, interest rates and premiums, if any, and price
and terms of                redemption or payment prior to maturity, but subject to
Section 17.1(c) all such                different and separate tranches of the same
Series shall vote as a single class                and constitute one Series;  

		    (iii)                             each
Series of Additional Notes shall be dated the date of issue, bear interest
               at such rate or rates, mature on such date or dates, be subject to such
               mandatory and optional prepayment on the dates and at the premiums, if
any, have                such additional or different conditions precedent to closing,
such                representations and warranties and such covenants as shall be
specified in the                Supplement under which such Additional Notes are issued
and upon execution of                any such Supplement, this Agreement shall be amended
(a) to reflect any                additional covenants without further action on the part
of the holders of the                Notes outstanding under this Agreement, provided,
that any such                additional covenant shall not impair, diminish or otherwise
adversely modify any                existing covenants contained herein, provided
further, that any such                additional covenants shall inure to the benefit
of all holders of Notes so long                as any Additional Notes issued pursuant to
such Supplement remain outstanding,                and (b) to reflect such
representations and warranties as are contained in such                Supplement for the
benefit of the holders of such Additional Notes in accordance                with the
provisions of Section 16;  

-3- 

		    (iv)                             each
Series of Additional Notes issued under this Agreement shall be in
               substantially the form of Exhibit 1 to Exhibit S hereto with
such                variations, omissions and insertions as are necessary or permitted
hereunder;  

		    (v)                             the
minimum principal amount of any Note issued under a Supplement shall be
               $100,000, except as may be necessary to evidence the outstanding amount of
any                Note originally issued in a denomination of $100,000 or more;  

		    (vi)                             all
Additional Notes shall constitute Senior Debt of the Company and shall rank pari passu with
all other outstanding Notes; and  

		    (vii)                             no
Additional Notes shall be issued hereunder if at the time of issuance thereof
               and after giving effect to the application of the proceeds thereof, any
Default                or Event of Default shall have occurred and be continuing.  

        The
obligations of the Additional Purchasers to purchase any Additional Notes shall be subject
to the following conditions precedent, in addition to the conditions specified in the
Supplement pursuant to which such Additional Notes may be issued: 

		    (a)              Compliance
Certificate. A duly authorized Senior Financial Officer shall                execute
and deliver to each Additional Purchaser an Officer’s Certificate
               dated the date of issue of such Series of Additional Notes stating that
such                officer has reviewed the provisions of this Agreement (including any
Supplements                hereto) and setting forth the information and computations (in
sufficient                detail) required in order to establish whether after giving
effect to the                issuance of the Additional Notes and after giving effect to
the application of                the proceeds thereof, the Company is in compliance with
the requirements of                Section 10.1 on such date (based upon the
financial statements for the most                recent fiscal quarter ended prior to the
date of such certificate).  

		    (b)              Execution
and Delivery of Supplement. The Company and each such                Additional
Purchaser shall execute and deliver a Supplement substantially in the                form
of Exhibit S hereto.  

		    (c)              Representations
of Additional Purchasers. Each Additional Purchaser shall                have
confirmed in the Supplement that the representations set forth in                Section 6
are true with respect to such Additional Purchaser on and as of                the date
of issue of the Additional Notes.  

		    (d)              Execution
and Delivery of Guaranty Ratification. Provided that a                Collateral
Release shall not have occurred, each Subsidiary Guarantor shall                execute
and deliver a Guaranty Ratification in the form attached to the                Subsidiary
Guaranty.  

-4- 

        Section
2.3. Subsidiary Guaranty. (a) The payment by the Company of all amounts
due with respect to the Notes and the performance by the Company of its obligations under
this Agreement will be absolutely and unconditionally guaranteed by the Subsidiary
Guarantors pursuant to the Subsidiary Guaranty Agreement, dated as of even date herewith,
which shall be substantially in the form of Exhibit 2.3 attached hereto, and
otherwise in accordance with the provisions of Section 9.7 hereof (the
“Subsidiary Guaranty”). 

         (b)       
          Any Subsidiary Guarantor shall be released from its obligation under a
          Subsidiary Guaranty (i) if such Subsidiary Guarantor has been released and
          discharged (or will be released and discharged concurrently with the release of
          such Subsidiary Guarantor under the Subsidiary Guaranty) as an obligor and
          guarantor under and in respect of the Bank Credit Agreement and the Company so
          certifies to the holders of the Notes in a certificate of a Responsible Officer,
          (ii) at the time of such release and discharge, the Company shall deliver a
          certificate of a Responsible Officer to the holders of the Notes stating that no
          Default or Event of Default exists (including, without limitation, under
          Section 10.10 hereof), and (iii) if any fee or other form of
          consideration is given to any holder of Debt of the Company expressly for the
          purpose of such release, holders of the Notes shall receive equivalent
          consideration (a “Collateral Release”). 

         (c)       
          A Subsidiary Guarantor shall be automatically released from the Subsidiary
          Guaranty in accordance with the terms of Section 25 of the Subsidiary Guaranty. 

     SECTION 3.    
          CLOSING. 

        The
sale and purchase of the Series 2007A Notes to be purchased by each Purchaser shall
occur at the offices of Chapman and Cutler LLP, 111 West Monroe St., Chicago,
Illinois 60603, at 10:00 a.m. Central time, at a closing (the
“Closing”) on August 23, 2007 or on such other Business Day thereafter on
or prior to August 31, 2007 as may be agreed upon by the Company and the Purchasers (the
“Closing Date”). On the Closing Date, the Company will deliver to each
Purchaser the Series 2007A Notes to be purchased by such Purchaser in the form of a
single Series A Note (or such greater number of Series 2007A Notes in
denominations of at least $100,000 as such Purchaser may request) dated the date of the
Closing Date and registered in such Purchaser’s name (or in the name of such
Purchaser’s nominee), against delivery by such Purchaser to the Company or its order
of immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to Account Number
1216201, at M&I Marshall & Ilsley Bank, Milwaukee, WI, ABA Number 075000051, in
the Account Name of “Regal-Beloit Corporation” If, on the Closing Date, the
Company shall fail to tender such Series 2007A Notes to any Purchaser as provided
above in this Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to any Purchaser’s satisfaction, such Purchaser shall, at
such Purchaser’s election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason of such
failure or such nonfulfillment. 

-5- 

     SECTION 4.    
          CONDITIONS TO CLOSING. 

        Each
Purchaser’s obligation to purchase and pay for the Series 2007A Notes to be sold
to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at the Closing, of the following conditions applicable to the
Closing Date: 

        Section
4.1. Representations and Warranties.  

         (a)       
          Representations and Warranties of the Company. The representations and
          warranties of the Company in this Agreement shall be correct when made and at
          the time of the Closing. 

         (b)       
          Representations and Warranties of the Subsidiary Guarantors. The
          representations and warranties of the Subsidiary Guarantors in the Subsidiary
          Guaranty shall be correct when made and at the time of the Closing. 

         Section 4.2.       
          Performance; No Default. The Company and each Subsidiary Guarantor
          shall have performed and complied in all material respects with all agreements
          and conditions contained in this Agreement and the Subsidiary Guaranty required
          to be performed or complied with by the Company and each such Subsidiary
          Guarantor prior to or at the Closing, and after giving effect to the issue and
          sale of the Series 2007A Notes (and the application of the proceeds thereof
          as contemplated by Section 5.14), no Default or Event of Default shall have
          occurred and be continuing. Neither the Company nor any Subsidiary shall have
          entered into any transaction since the date of the Memorandum that would have
          been prohibited by Section 10 hereof had such Sections applied since such
          date. 

         Section 4.3.       
          Compliance Certificates. 

         (a)       
          Officer’s Certificate of the Company. The Company shall have
          delivered to such Purchaser an Officer’s Certificate, dated the Closing
          Date, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9
          have been fulfilled. 

         (b)       
          Secretary’s Certificate of the Company. The Company shall have
          delivered to such Purchaser a certificate, dated the Closing Date, certifying as
          to the resolutions attached thereto and other corporate proceedings relating to
          the authorization, execution and delivery of the Series 2007A Notes and
          this Agreement. 

         (c)       
          Officer’s Certificate of the Subsidiary Guarantors. Each Subsidiary
          Guarantor shall have delivered to such Purchaser an Officer’s Certificate,
          dated the Closing Date, certifying that the conditions specified in Sections
          4.1(b), 4.2 and 4.9 have been fulfilled. 

         (d)       
          Secretary’s Certificate of the Subsidiary Guarantors. Each
          Subsidiary Guarantor shall have delivered to such Purchaser a certificate, dated
          the Closing Date, certifying as to the resolutions attached thereto and other
          corporate proceedings relating to the authorization, execution and delivery of
          the Subsidiary Guaranty. 

-6- 

         Section 4.4.       
          Opinions of Counsel. Such Purchaser shall have received opinions
          in form and substance satisfactory to such Purchaser, dated the Closing Date
          (a) from Paul J. Jones, Vice President, Secretary and General
          Counsel of the Company, covering the matters set forth in Exhibit 4.4(a)
          and covering such other matters incident to the transactions contemplated hereby
          as such Purchaser or its counsel may reasonably request (and the Company hereby
          instructs its counsel to deliver such opinion to the Purchasers), (b) from
          Foley & Lardner LLP, special counsel for the Company, covering the
          matters set forth in Exhibit 4.4(b) and covering such other matters
          incident to the transactions contemplated hereby as such Purchaser or its
          counsel may reasonably request (and the Company hereby instructs its counsel to
          deliver such opinion to the Purchasers), and (c) from Chapman and Cutler
          LLP, the Purchasers’ special counsel in connection with such transactions,
          substantially in the form set forth in Exhibit 4.4(c) and covering such
          other matters incident to such transactions as such Purchaser may reasonably
          request. 

         Section 4.5.       
          Purchase Permitted By Applicable Law, Etc. On the date of the
          Closing such Purchaser’s purchase of Series 2007A Notes shall
          (a) be permitted by the laws and regulations of each jurisdiction to which
          such Purchaser is subject, without recourse to provisions (such as
          section 1405(a)(8) of the New York Insurance Law) permitting limited
          investments by insurance companies without restriction as to the character of
          the particular investment, (b) not violate any applicable law or regulation
          (including, without limitation, Regulation T, U or X of the Board of
          Governors of the Federal Reserve System) and (c) not subject such Purchaser
          to any tax, penalty or liability under or pursuant to any applicable law or
          regulation, which law or regulation was not in effect on the date hereof. If
          requested by such Purchaser, such Purchaser shall have received an
          Officer’s Certificate certifying as to such matters of fact as such
          Purchaser may reasonably specify to enable such Purchaser to determine whether
          such purchase is so permitted. 

         Section 4.6.       
          Sale of Other Notes. Contemporaneously with the Closing the
          Company shall sell to each other Purchaser and each other Purchaser shall
          purchase the Series 2007A Notes to be purchased by it at the Closing as
          specified in Schedule A. 

         Section 4.7.       
          Payment of Special Counsel Fees. Without limiting the provisions of
          Section 15.1, the Company shall have paid on or before the Closing Date,
          the reasonable fees, reasonable charges and reasonable disbursements of the
          Purchasers’ special counsel referred to in Section 4.4 to the extent
          reflected in a statement of such counsel rendered to the Company at least one
          Business Day prior to the Closing Date. 

         Section 4.8.       
          Private Placement Number. A Private Placement Number issued by
          Standard & Poor’s CUSIP Service Bureau (in cooperation with the
          Securities Valuation Office of the National Association of Insurance
          Commissioners) shall have been obtained for each tranche of the
          Series 2007A Notes. 

         Section 4.9.       
          Changes in Corporate Structure. Neither the Company nor any
          Subsidiary Guarantor shall have changed its jurisdiction of organization or,
          except as reflected in Schedule 4.9, been a party to any merger or
          consolidation, or shall have succeeded to all or any substantial part of the
          liabilities of any other entity, at any time following the date of the most
          recent financial statements referred to in Schedule 5.5. 

-7- 

        Section
4.10. Subsidiary Guaranty. The Subsidiary Guaranty shall have been duly
authorized, executed and delivered by each Subsidiary Guarantor, shall constitute the
legal, valid and binding contract and agreement of each Subsidiary Guarantor and such
Purchaser shall have received a true, correct and complete copy thereof. 

         Section 4.11.       
          Funding Instructions. At least three Business Days prior to the
          date of the Closing, each Purchaser shall have received written instructions
          signed by a Responsible Officer on letterhead of the Company confirming the
          information specified in Section 3 including (i) the name and address
          of the transferee bank, (ii) such transferee bank’s ABA number and
          (iii) the account name and number into which the purchase price for the
          Series 2007A Notes is to be deposited. 

         Section 4.12.       
          Proceedings and Documents. All corporate and other organizational
          proceedings in connection with the transactions contemplated by this Agreement
          and all documents and instruments incident to such transactions shall be
          satisfactory to such Purchaser and its special counsel, and such Purchaser and
          its special counsel shall have received all such counterpart originals or
          certified or other copies of such documents as such Purchaser or such special
          counsel may reasonably request. 

         Section 4.13.       
          Notice of Floating Interest Rate. At least one Business Day prior
          to the Closing Date, each Purchaser of the Series 2007A Notes shall have
          received written notice from the Company of LIBOR and the Adjusted LIBOR Rate
          for the initial Interest Period, all as set forth in Section 1.2(a)(ii). 

         Section 4.14.       
          Intercreditor Agreement. The Intercreditor Agreement shall be reasonably
          satisfactory in scope, form and substance to such Purchaser, shall have been
          duly executed and delivered by the parties thereto, shall constitute the legal,
          valid and binding contract and agreement of each of the parties thereto, and
          such Purchaser shall have received a true, complete, executed copy thereof. 

     SECTION 5.    
          REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 

        The
Company represents and warrants to each Purchaser that: 

         Section 5.1.       
          Organization; Power and Authority. The Company is a corporation duly
          organized, validly existing and in good standing (or equivalent) under the laws
          of its jurisdiction of incorporation, and is duly qualified as a foreign
          corporation and is in good standing (or equivalent) in each jurisdiction in
          which such qualification is required by law, other than those jurisdictions as
          to which the failure to be so qualified or in good standing would not,
          individually or in the aggregate, reasonably be expected to have a Material
          Adverse Effect. The Company has the corporate power and authority to own or hold
          under lease the properties it purports to own or hold under lease, to transact
          the business it transacts and proposes to transact, to execute and deliver this
          Agreement and the Series 2007A Notes and to perform the provisions hereof
          and thereof. 

-8- 

         Section 5.2.       
          Authorization, Etc. This Agreement and the Notes to be issued on
          the Closing Date have been duly authorized by all necessary corporate action on
          the part of the Company, and this Agreement constitutes, and upon execution and
          delivery thereof each such Note will constitute, a legal, valid and binding
          obligation of the Company enforceable against the Company in accordance with its
          terms, except as such enforceability may be limited by (i) applicable
          bankruptcy, insolvency, reorganization, moratorium or other similar laws
          affecting the enforcement of creditors’ rights generally and
          (ii) general principles of equity (regardless of whether such
          enforceability is considered in a proceeding in equity or at law). 

         Section 5.3.       
          Disclosure. The Company, through its agent, Banc of America
          Securities LLC, has delivered to you and each Other Purchaser a copy of a
          Private Placement Memorandum, dated July, 2007 (the
          “Memorandum”), relating to the transactions contemplated
          hereby. The Memorandum fairly describes, in all material respects, the general
          nature of the business and principal properties of the Company and its
          Subsidiaries. This Agreement, the Memorandum, the documents, certificates or
          other writings delivered to the Purchasers by or on behalf of the Company in
          connection with the transactions contemplated hereby and the financial
          statements listed in Schedule 5.5, in each case, delivered to the
          Purchasers prior to July 25, 2007 (this Agreement, the Memorandum and such
          documents, certificates or other writings and such financial statements being
          referred to, collectively, as the “Disclosure Documents”),
          taken as a whole, do not contain any untrue statement of a material fact or omit
          to state any material fact necessary to make the statements therein not
          misleading in light of the circumstances under which they were made and on the
          date when made and as of the Closing Date. Except as disclosed in the Disclosure
          Documents, since December 31, 2006, there has been no change in the
          financial condition, operations, business or properties of the Company or any of
          its Subsidiaries except changes that individually or in the aggregate would not
          reasonably be expected to have a Material Adverse Effect. There is no liability
          known to the Company that would reasonably be expected to have a Material
          Adverse Effect that has not been set forth herein or in the Disclosure
          Documents. For purposes of this Section 5.3, posting of the Memorandum on
          Intralinks shall constitute delivery of the Memorandum to the Purchasers. 

         Section 5.4.       
          Organization and Ownership of Shares of Subsidiaries; Affiliates.
          (a) Schedule 5.4 contains (except as noted therein) complete and
          correct lists (i) of the Company’s Subsidiaries, showing, as to each
          Subsidiary, the correct name thereof, the jurisdiction of its organization, and
          the percentage of shares of each class of its capital stock or similar equity
          interests outstanding owned by the Company and each other Subsidiary,
          (ii) of the Company’s Affiliates, other than Subsidiaries, and
          (iii) of the Company’s directors and senior officers. 

         (b)       
          All of the outstanding shares of capital stock or similar equity interests of
          each Subsidiary shown in Schedule 5.4 as being owned by the Company and its
          Subsidiaries have been validly issued, are fully paid and nonassessable and are
          owned by the Company or another Subsidiary free and clear of any Lien (except as
          otherwise disclosed in Schedule 5.4). 

-9- 

         (c)       
          Each Subsidiary identified in Schedule 5.4 is a corporation or other legal
          entity duly organized, validly existing and in good standing (or equivalent)
          under the laws of its jurisdiction of organization, and is duly qualified as a
          foreign corporation or other legal entity and is in good standing in each
          jurisdiction in which such qualification is required by law, other than those
          jurisdictions as to which the failure to be so qualified or in good standing
          would not, individually or in the aggregate, reasonably be expected to have a
          Material Adverse Effect. Each such Subsidiary has the corporate or other power
          and authority to own or hold under lease the properties it purports to own or
          hold under lease and to transact the business it transacts and proposes to
          transact except where the failure to have same would not have a Material Adverse
          Effect. 

         (d)       
          No Subsidiary is a party to, or otherwise subject to, any legal restriction or
          any agreement (other than this Agreement, the agreements listed on
          Schedule 5.4 and customary limitations imposed by corporate law statutes)
          restricting the ability of such Subsidiary to pay dividends out of profits or
          make any other similar distributions of profits to the Company or any of its
          Subsidiaries that owns outstanding shares of capital stock or similar equity
          interests of such Subsidiary except for any such restrictions that could not
          reasonably be expected to have a Material Adverse Effect. 

         Section 5.5.       
          Financial Statements; Material Liabilities. The Company has
          delivered to each Purchaser copies of the financial statements of the Company
          and its Subsidiaries listed on Schedule 5.5. All of said financial
          statements (including in each case the related schedules and notes) fairly
          present in all material respects the consolidated financial position of the
          Company and its Subsidiaries as of the respective dates specified in such
          Schedule and the consolidated results of their operations and cash flows for the
          respective periods so specified and have been prepared in accordance with GAAP
          consistently applied throughout the periods involved except as set forth in the
          notes thereto (subject, in the case of any interim financial statements, to
          normal year-end adjustments). The Company and its Subsidiaries do not have any
          Material liabilities that are not disclosed on such financial statements or
          otherwise disclosed in the Disclosure Documents. 

         Section 5.6.       
          Compliance with Laws, Other Instruments, Etc. The execution,
          delivery and performance by the Company of this Agreement and the
          Series 2007A Notes will not (a) contravene, result in any breach of,
          or constitute a default under, or result in the creation of any Lien in respect
          of any property of the Company or any Subsidiary under, any indenture, mortgage,
          deed of trust, loan, purchase or credit agreement, lease, corporate charter or
          by-laws, or any other agreement or instrument to which the Company or any
          Subsidiary is bound or by which the Company or any Subsidiary or any of their
          respective properties may be bound or affected, (b) conflict with or result
          in a breach of any of the terms, conditions or provisions of any order,
          judgment, decree, or ruling of any court, arbitrator or Governmental Authority
          applicable to the Company or any Subsidiary, or (c) violate any provision
          of any statute or other rule or regulation of any Governmental Authority
          applicable to the Company or any Subsidiary. 

         Section 5.7.       
          Governmental Authorizations, Etc. No consent, approval or
          authorization of, or registration, filing or declaration with, any Governmental
          Authority is required in connection with the execution, delivery or performance
          by the Company of this Agreement or the Series 2007A Notes except for
          certain filings on form 8-K as may be required by Rule 13a-11 of the
          Securities Exchange Act of 1934, as amended. 

-10- 

         Section 5.8.       
          Litigation; Observance of Agreements, Statutes and Orders.
          (a) Except as disclosed on Schedule 5.8, there are no actions,
          suits, investigations or proceedings pending or, to the knowledge of the
          Company, threatened against or affecting the Company or any Subsidiary or any
          property of the Company or any Subsidiary in any court or before any arbitrator
          of any kind or before or by any Governmental Authority that, individually or in
          the aggregate, would reasonably be expected to have a Material Adverse Effect. 

         (b)       
          Neither the Company nor any Subsidiary is in default under any term of any
          agreement or instrument to which it is a party or by which it is bound, or any
          order, judgment, decree or ruling of any court, arbitrator or Governmental
          Authority or is in violation of any applicable law, ordinance, rule or
          regulation (including without limitation Environmental Laws or the USA Patriot
          Act) of any Governmental Authority, which default or violation, individually or
          in the aggregate, would reasonably be expected to have a Material Adverse
          Effect. 

         Section 5.9.       
          Taxes. The Company and its Subsidiaries have filed all tax returns
          that are required to have been filed in any jurisdiction, and have paid all
          taxes shown to be due and payable on such returns and all other taxes and
          assessments levied upon them or their properties, assets, income or franchises,
          to the extent such taxes and assessments have become due and payable and before
          they have become delinquent, except for any taxes and assessments (a) the
          amount of which is not individually or in the aggregate Material or (b) the
          amount, applicability or validity of which is currently being contested in good
          faith by appropriate proceedings and with respect to which the Company or a
          Subsidiary, as the case may be, has established adequate reserves in accordance
          with GAAP. The Company knows of no basis for any other tax or assessment that
          would reasonably be expected to have a Material Adverse Effect. The charges,
          accruals and reserves on the books of the Company and its Subsidiaries in
          respect of federal, state or other taxes for all fiscal periods are adequate in
          all Material respects. The federal income tax liabilities of the Company and its
          Subsidiaries have been finally determined (whether by reason of completed audits
          or the statute of limitations having run) for all fiscal years up to and
          including the fiscal year ended December 31, 2002. 

         Section 5.10.       
          Title to Property; Leases. The Company and its Subsidiaries have
          good and sufficient title to their respective properties which the Company and
          its Subsidiaries own or purport to own that individually or in the aggregate are
          Material, including, if material under GAAP, all such properties reflected in
          the most recent audited balance sheet referred to in Section 5.5 or
          purported to have been acquired by the Company or any Subsidiary after said date
          (except as sold or otherwise disposed of in the ordinary course of business), in
          each case free and clear of Liens prohibited by this Agreement. All leases that
          individually or in the aggregate are Material are valid and subsisting and are
          in full force and effect in all material respects. 

         Section 5.11.       
          Licenses, Permits, Etc. Except as disclosed in Schedule 5.11, 

		    (a)                             the
Company and its Subsidiaries own or possess all licenses, permits,
               franchises, authorizations, patents, copyrights, proprietary software,
service                marks, trademarks and trade names, or rights thereto, that
individually or in                the aggregate are Material, without known conflict with
the rights of others                except to the extent any such conflict would not have
a Material Adverse Effect;  

-11- 

		    (b)                             no
product of the Company or any of its Subsidiaries infringes in any Material
               respect any license, permit, franchise, authorization, patent, copyright,
               proprietary software, service mark, trademark, trade name or other right
owned                by any other Person except to the extent any such infringement would
not have a                Material Adverse Effect; and  

		    (c)                             there
is no Material violation by any Person of any right of the Company or any
               of its Subsidiaries with respect to any patent, copyright, proprietary
software,                service mark, trademark, trade name or other right owned or used
by the Company                or any of its Subsidiaries except to the extent any such
violation would not                have a Material Adverse Effect.  

         Section 5.12.       
          Compliance with ERISA. (a) The Company and each ERISA
          Affiliate have operated and administered each Plan while such Plan was sponsored
          or maintained by the Company or such ERISA Affiliate in compliance with all
          applicable laws except for such instances of noncompliance as have not resulted
          in and would not reasonably be expected to result in a Material Adverse Effect.
          Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
          to Title I or IV of ERISA or the penalty or excise tax provisions of the
          Code relating to employee benefit plans (as defined in section 3 of ERISA),
          and no event, transaction or condition has occurred or exists that would
          reasonably be expected to result in the incurrence of any such liability by the
          Company or any ERISA Affiliate, or in the imposition of any Lien on any of the
          rights, properties or assets of the Company or any ERISA Affiliate, in either
          case pursuant to Title I or IV of ERISA or to such penalty or excise tax
          provisions or to section 401(a)(29) or 412 of the Code or section 4068 of
          ERISA, other than such liabilities or Liens as would not be individually or in
          the aggregate Material. 

         (b)       
          The present value of the aggregate benefit liabilities under each of the Plans
          (other than Multiemployer Plans) that are sponsored or maintained by the Company
          or an ERISA Affiliate and that are subject to Code Section 412 or
          Title IV of ERISA, determined as of the end of such Plan’s most
          recently ended plan year on the basis of the actuarial assumptions specified for
          funding purposes in such Plan’s most recent actuarial valuation report, did
          not exceed the aggregate current value of the assets of such Plan allocable to
          such benefit liabilities by more than $24,367,000 in the aggregate for all
          Plans. The term “benefit liabilities” has the meaning specified
          in section 4001 of ERISA and the terms “current value” and
          “present value” have the meaning specified in section 3 of
          ERISA. 

         (c)       
          The Company and its ERISA Affiliates have not incurred any withdrawal
          liabilities (and are not subject to contingent withdrawal liabilities) under
          section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
          individually or in the aggregate are Material. 

         (d)       
          The expected post-retirement benefit obligation (determined as of the last day
          of the Company’s most recently ended fiscal year in accordance with
          Financial Accounting Standards Board Statement No. 106, without regard to
          liabilities attributable to continuation coverage mandated by section 4980B
          of the Code) of the Company and its Subsidiaries is not Material. 

-12- 

         (e)       
          The execution and delivery of this Agreement and the issuance and sale of the
          Series 2007A Notes hereunder will not involve any transaction that is
          subject to the prohibitions of Section 406 of ERISA or in connection with
          which a tax would be imposed pursuant to Section 4975(c)(1)(A)-(D) of the
          Code. The representation by the Company in the first sentence of this
          Section 5.12(e) is made in reliance upon and subject to the accuracy of
          each Purchaser’s representation in Section 6.3 as to the sources of
          the funds to be used to pay the purchase price of the Series 2007A Notes to
          be purchased by such Purchaser. 

         Section 5.13.       
          Private Offering by the Company. Neither the Company nor anyone
          acting on the Company’s behalf has offered the Series 2007A Notes or
          any similar securities for sale to, or solicited any offer to buy any of the
          same from, or otherwise approached or negotiated in respect thereof with, any
          Person other than the Purchasers and not more than 45 other Institutional
          Investors, each of which has been offered the Series 2007A Notes in
          connection with a private sale for investment. Neither the Company nor anyone
          acting on its behalf has taken, or will take, any action that would subject the
          issuance or sale of the Series 2007A Notes to the registration requirements
          of Section 5 of the Securities Act or to the registration requirements of
          any securities or blue sky laws of any applicable jurisdiction. 

         Section 5.14.       
          Use of Proceeds; Margin Regulations. The Company will apply the
          proceeds of the sale of the Series 2007A Notes for general corporate
          purposes of the Company. No part of the proceeds from the sale of the
          Series 2007A Notes hereunder will be used, directly or indirectly, for the
          purpose of buying or carrying any margin stock within the meaning of
          Regulation U of the Board of Governors of the Federal Reserve System
          (12 CFR 221), or for the purpose of buying or carrying or trading in
          any securities under such circumstances as to involve the Company in a violation
          of Regulation X of said Board (12 CFR 224) or to involve any broker or
          dealer in a violation of Regulation T of said Board (12 CFR 220).
          Margin stock does not constitute more than 5% of the value of the consolidated
          assets of the Company and its Subsidiaries and the Company does not have any
          present intention that margin stock will constitute more than 5% of the value of
          such assets. As used in this Section, the terms “margin stock”
          and “purpose of buying or carrying” shall have the meanings
          assigned to them in said Regulation U. 

         Section 5.15.       
          Existing Debt; Future Liens. (a) Except as described therein,
          Schedule 5.15 sets forth a complete and correct list of all outstanding
          Debt of the Company and its Subsidiaries as of June 30, 2007, since which
          date there has been no Material change in the amounts, interest rates, sinking
          funds, installment payments or maturities of the Debt of the Company or its
          Subsidiaries except in the ordinary course of business. Neither the Company nor
          any Significant Subsidiary is in default and no waiver of default is currently
          in effect, in the payment of any principal or interest on any Debt of the
          Company or such Significant Subsidiary, and no default exists with respect to
          any such Debt of the Company or any Significant Subsidiary, that would permit
          (or that with notice or the lapse of time, or both, would permit) one or more
          Persons to cause such Debt to become due and payable before its stated maturity
          or before its regularly scheduled dates of payment. 

-13- 

         (b)       
          Except as disclosed in Schedule 5.15, neither the Company nor any Subsidiary has
          agreed or consented to cause or permit in the future (upon the happening of a
          contingency or otherwise) any of its property, whether now owned or hereafter
          acquired, to be subject to a Lien prohibited under Section 10.5. 

         (c)       
          Neither the Company nor any Significant Subsidiary is a party to, or otherwise
          subject to any provision contained in, any instrument evidencing Debt of the
          Company or such Significant Subsidiary, any agreement relating thereto or any
          other agreement (including, but not limited to, its charter or other
          organizational document) which limits the amount of, or otherwise imposes
          restrictions on the incurring of, Debt of the Company, except as specifically
          indicated in Schedule 5.15. 

         Section 5.16.       
          Foreign Assets Control Regulations, Etc. (a) Neither the sale
          of the Series 2007A Notes by the Company hereunder nor its use of the
          proceeds thereof will violate the Trading with the Enemy Act, as amended, or any
          of the foreign assets control regulations of the United States Treasury
          Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
          legislation or executive order relating thereto. 

         (b)       
          Neither the Company nor any Subsidiary is a Person described or designated in
          the Specially Designated Nationals and Blocked Persons List of the Office of
          Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or, to
          the knowledge of the Company, engages in any dealings or transactions with any
          such Person. The Company and its Subsidiaries are in compliance, in all material
          respects, with the USA Patriot Act. 

         (c)       
          No part of the proceeds from the sale of the Series 2007A Notes hereunder
          will be used, directly or indirectly, for any payments to any governmental
          official or employee, political party, official of a political party, candidate
          for political office, or anyone else acting in an official capacity, in order to
          obtain, retain or direct business or obtain any improper advantage, in violation
          of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming
          in all cases that such Act applies to the Company. 

         Section 5.17.       
          Status under Certain Statutes. Neither the Company nor any
          Subsidiary is an “investment company” registered or required to be
          registered under the Investment Company Act of 1940, as amended, or is subject
          to regulation under the Public Utility Holding Company Act of 2005, as amended,
          the ICC Termination Act of 1995, as amended, or the Federal Power Act, as
          amended. 

         Section 5.18.       
          Environmental Matters. (a) Neither the Company nor any Subsidiary
          has knowledge of any claim or has received any notice of any claim, and no
          proceeding has been instituted raising any claim against the Company or any of
          its Subsidiaries or any of their respective real properties now or formerly
          owned, leased or operated by any of them, or other assets, alleging any damage
          to the environment or violation of any Environmental Laws, except, in each case,
          such as would not reasonably be expected to result in a Material Adverse Effect. 

         (b)       
          Neither the Company nor any Subsidiary has knowledge of any facts which would
          reasonably be expected to give rise to any claim, public or private, against the
          Company for violation of Environmental Laws or damage to the environment
          emanating from, occurring on or in any way related to real properties now or
          formerly owned, leased or operated by any of them or to other assets or their
          use, except, in each case, such as would not reasonably be expected to result in
          a Material Adverse Effect. 

-14- 

         (c)       
          Neither the Company nor any of its Subsidiaries has stored any Hazardous
          Materials on real properties now or formerly owned, leased or operated by any of
          them or has disposed of any Hazardous Materials in each case in a manner
          contrary to any Environmental Laws in each case in any manner that would
          reasonably be expected to result in a Material Adverse Effect. 

         (d)       
          All buildings on all real properties now owned, leased or operated by the
          Company or any of its Subsidiaries are in compliance with applicable
          Environmental Laws, except where failure to comply would not reasonably be
          expected to result in a Material Adverse Effect. 

         Section 5.19.       
          Notes Rank Pari Passu. The obligations of the Company under this
          Agreement and the Notes rank pari passu in right of payment with all
          other senior unsecured Debt (actual or contingent) of the Company. 

     SECTION 6.    
          REPRESENTATIONS OF THE PURCHASER. 

         Section 6.1.       
          Purchase for Investment. Each Purchaser severally represents that
          it is purchasing the Series 2007A Notes for its own account or for one or
          more separate accounts maintained by it or for the account of one or more
          pension or trust funds and not with a view to the distribution thereof (other
          than any Notes purchased by Banc of America Securities LLC on the Closing Date
          which are intended to be resold to a “qualified institutional buyer”
          pursuant to Rule 144A of the Securities Act), provided that the
          disposition of such Purchaser’s or such pension or trust funds’
          property shall at all times be within such Purchaser’s or such pension or
          trust funds’ control. Each Purchaser understands that the Series 2007A
          Notes have not been registered under the Securities Act and may be resold only
          if registered pursuant to the provisions of the Securities Act or if an
          exemption from registration is available, except under circumstances where
          neither such registration nor such an exemption is required by law, and that the
          Company is not required to register the Series 2007A Notes. 

         Section 6.2.       
          Accredited Investor. Each Purchaser represents that it is an
          “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7)
          of Regulation D under the Securities Act acting for its own account (and not for
          the account of others) or as a fiduciary or agent for others (which others are
          also “accredited investors”). Each Purchaser further represents that
          such Purchaser has had the opportunity to ask questions of the Company and
          received answers concerning the terms and conditions of the sale of the
          Series 2007A Notes. 

-15- 

         Section 6.3.       
          Source of Funds. Each Purchaser severally represents that at least one of
          the following statements is an accurate representation as to each source of
          funds (a “Source”) to be used by such Purchaser to pay the
          purchase price of the Series 2007A Notes to be purchased by such Purchaser
          hereunder: 

		    (a)                             the
Source is an “insurance company general account” (as the term is
               defined in the United States Department of Labor’s Prohibited
Transaction                Exemption (“PTE”) 95-60) in respect of which
the reserves and                liabilities (as defined by the annual statement for life
insurance companies                approved by the National Association of Insurance
Commissioners (the “NAIC Annual Statement”)) for the general account
contract(s)                held by or on behalf of any employee benefit plan together
with the amount of                the reserves and liabilities for the general account
contract(s) held by or on                behalf of any other employee benefit plans
maintained by the same employer (or                affiliate thereof as defined in PTE
95-60) or by the same employee organization                in the general account do not
exceed 10% of the total reserves and liabilities                of the general account
(exclusive of separate account liabilities) plus surplus                as set forth in
the NAIC Annual Statement filed with such Purchaser’s state                of
domicile; or  

		    (b)                             the
Source is a separate account that is maintained solely in connection with
               such Purchaser’s fixed contractual obligations under which the
amounts                payable, or credited, to any employee benefit plan (or its related
trust) that                has any interest in such separate account (or to any
participant or beneficiary                of such plan (including any annuitant)) are not
affected in any manner by the                investment performance of the separate
account; or  

		    (c)                             the
Source is either (i) an insurance company pooled separate account, within
               the meaning of PTE 90-1 or (ii) a bank collective investment fund, within
the                meaning of the PTE 91-38 and, except as disclosed by such Purchaser to
the                Company in writing pursuant to this clause (c), no employee benefit
plan or                group of plans maintained by the same employer or employee
organization                beneficially owns more than 10% of all assets allocated to
such pooled separate                account or collective investment fund; or  

		    (d)                             the
Source constitutes assets of an Òinvestment fundÓ (within the
               meaning of Part V of PTE 84-14 (the ÒQPAM ExemptionÓ))
               managed by a Òqualified professional asset managerÓ or
               ÒQPAMÓ (within the meaning of Part V of the QPAM
Exemption),                no employee benefit plan’s assets that are included in
such investment                fund, when combined with the assets of all other employee
benefit plans                established or maintained by the same employer or by an
affiliate (within the                meaning of Section V(c)(1) of the QPAM
Exemption) of such employer or by                the same employee organization and
managed by such QPAM, exceed 20% of the total                client assets managed by
such QPAM, the conditions of Part I(c) and (g) of the                QPAM Exemption are
satisfied, as of the last day of its most recent calendar                quarter, the
QPAM does not own a 10% or more interest in the Company and no                person
controlling or controlled by the QPAM (applying the definition of                ÒcontrolÓ in
Section V(e) of the QPAM Exemption) owns a 20%                or more interest in
the Company (or less than 20% but greater than 10%, if such                person
exercises control over the management or policies of the Company by                reason
of its ownership interest) and (i) the identity of such QPAM and                (ii) the
names of all employee benefit plans whose assets are included in                such
investment fund have been disclosed to the Company in writing pursuant to
               this clause (d); or  

-16- 

		    (e)                             the
Source constitutes assets of a “plan(s)” (within the meaning of
               Section IV of PTE 96-23 (the “INHAM Exemption”))
               managed by an “in-house asset manager” or “INHAM” (within
               the meaning of Part IV of the INHAM exemption), the conditions of Part
I(a), (g)                and (h) of the INHAM Exemption are satisfied, neither the INHAM
nor a person                controlling or controlled by the INHAM (applying the
definition of                “control” in Section IV(d) of the INHAM Exemption)
owns a 5% or more                interest in the Company and (i) the identity of such
INHAM and (ii) the name(s)                of the employee benefit plan(s) whose assets
constitute the Source have been                disclosed to the Company in writing
pursuant to this clause (e); or  

		    (f)                             the
Source is a governmental plan; or  

		    (g)                             the
Source is one or more employee benefit plans, or a separate account or trust
               fund comprised of one or more employee benefit plans, each of which has
been                identified to the Company in writing pursuant to this clause (g); or  

		    (h)                             the
Source does not include assets of any employee benefit plan, other than a
               plan exempt from the coverage of ERISA.  

As used in this Section 6.3, the
terms “employee benefit plan,” “governmental plan,” and
“separate account” shall have the respective meanings assigned to such
terms in section 3 of ERISA. 

     SECTION 7.    
          INFORMATION AS TO COMPANY. 

         Section 7.1.       
          Financial and Business Information. The Company shall deliver to each
          holder of Notes that is an Institutional Investor: 

		    (a)              Quarterly
Statements — within 60 days after the end of each                quarterly
fiscal period in each fiscal year of the Company (other than the last
               quarterly fiscal period of each such fiscal year),  

		    (i)                        a
consolidated balance sheet of the Company and its Subsidiaries as at the end           of
such quarter, and  

		    (ii)                                   consolidated
statements of income and cash flows of the Company and its           Subsidiaries, for
such quarter and (in the case of the second and third           quarters) for the portion
of the fiscal year ending with such quarter,  

	 	
setting
forth in each case in comparative form the figures for the corresponding periods in the
previous fiscal year, all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and certified by a Senior
Financial Officer as fairly presenting, in all material respects, the financial position
of the companies being reported on and their results of operations and cash flows,
subject to the absence of footnotes and to changes resulting from year-end adjustments,
provided that filing with the Securities and Exchange Commission within the time
period specified above of the Company’s Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor shall be deemed to satisfy the requirements
of this Section 7.1(a), provided further that the Company shall be deemed to
have satisfied the requirements of this Section 7.1(a) by filing of such form 10-Q
only if it shall have given each Purchaser written notice of such filing;  

-17- 

		    (b)              Annual
Statements — within 105 days after the end of each fiscal           year of the
Company,  

		    (i)                        a
consolidated balance sheet of the Company and its Subsidiaries, as at the end
          of such year, and  

		    (ii)                                   consolidated
statements of income, changes in shareholders’ equity and           cash flows of
the Company and its Subsidiaries, for such year,  

	 	
setting
forth in each case in comparative form the figures for the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion
thereon of Deloitte & Touche LLP or another independent certified public
accountants of recognized national standing, which opinion shall state that such
financial statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows and have
been prepared in conformity with GAAP, and that the examination of such accountants in
connection with such financial statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a reasonable basis for such
opinion in the circumstances, provided that filing with the Securities and
Exchange Commission within the time period specified above of the Company’s Annual
Report on Form 10-K for such fiscal year (together with the Company’s annual report
to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor shall be deemed to satisfy the
requirements of this Section 7.1(b), provided further that the Company
shall be deemed to have satisfied the requirements of this Section 7.1(b) by filing
of such form 10-K only if it shall have given each Purchaser written notice of such
filing;  

		    (c)              SEC
and Other Reports — except for filings referred to in                Section 7.1(a)
and (b) above, promptly upon filing or sending and, to the                extent
applicable, one copy of (i) each financial statement, report, notice
               or proxy statement sent by the Company or any Subsidiary to public
securities                holders generally, and (ii) each regular or periodic
report, each                registration statement that shall have become effective
(without exhibits except                as expressly requested by such holder), and each
final prospectus and all                amendments thereto filed by the Company or any
Subsidiary with the Securities                and Exchange Commission and of all press
releases and other statements made                available generally by the Company or
any Subsidiary to the public concerning                developments that are Material; provided that
filing of Form 8-K                with the Securities and Exchange Commission within
the time periods required by                the Securities and Exchange Act of 1934, as
amended, and the posting of press                releases on the Company’s website
shall satisfy the obligations under this                Section 7.1(c) so long as
the Company provides written notice of such                filing and/or posting;  

-18- 

		    (d)              Notice
of Default or Event of Default — promptly, and in any event
               within five Business Days after a Responsible Officer becomes aware of the
               existence of any Default or Event of Default or that any Person has given
any                notice or taken any action with respect to a claimed default hereunder
or that                any Person has given any notice or taken any action with respect
to a claimed                default of the type referred to in Section 11(g), a
written notice                specifying the nature and period of existence thereof and
what action the                Company is taking or proposes to take with respect
thereto;  

		    (e)              ERISA
Matters — promptly, and in any event within five Business Days
               after a Responsible Officer becomes aware of any of the following, a
written                notice setting forth the nature thereof and the action, if any,
that the Company                or an ERISA Affiliate proposes to take with respect
thereto:  

		    (i)                                   with
respect to any Plan, any reportable event, as defined in           Section 4043(c)
of ERISA and the regulations thereunder, for which notice           thereof has not been
waived pursuant to such regulations as in effect on the           date thereof; or  

		    (ii)                                   the
taking by the PBGC of steps to institute, or the threatening by the PBGC of           the
institution of, proceedings under Section 4042 of ERISA for the
          termination of, or the appointment of a trustee to administer, any Plan, or the
          receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer
          Plan that such action has been taken by the PBGC with respect to such
          Multiemployer Plan; or  

		    (iii)                                   any
event, transaction or condition that would result in the incurrence of any
          liability by the Company or any ERISA Affiliate pursuant to Title I or IV
          of ERISA or the imposition of a penalty or excise tax under the provisions of
          the Code relating to employee benefit plans, or the imposition of any Lien on
          any of the rights, properties or assets of the Company or any ERISA Affiliate
          pursuant to Title I or IV of ERISA or such penalty or excise tax
          provisions, if such liability or Lien, taken together with any other such
          liabilities or Liens then existing, would reasonably be expected to have a
          Material Adverse Effect;  

		    (f)              Notices
from Governmental Authority — promptly, and in any event                within
30 days of receipt thereof, copies of any notice to the Company or any
               Subsidiary from any federal or state Governmental Authority relating to
any                order, ruling, statute or other law or regulation that would
reasonably be                expected to have a Material Adverse Effect;  

-19- 

		    (g)              Supplements
— promptly and in any event within 10 Business Days                after the
execution and delivery of any Supplement, a copy thereof; and  

		    (h)              Requested
Information — with reasonable promptness, such other data                and
information relating to the business, operations, affairs, financial
               condition, assets or properties of the Company or any of its Subsidiaries
or                relating to the ability of the Company to perform its obligations
hereunder and                under the Notes as from time to time may be reasonably
requested by any such                holder of Notes or such information regarding the
Company required to satisfy                the requirements of 17 C.F.R. §230.144A,
as amended from time to time,                in connection with any contemplated transfer
of the Notes.  

         Section 7.2.       
          Officer’s Certificate. Each set of financial statements delivered to
          a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof
          shall be accompanied by a certificate of a Senior Financial Officer setting
          forth (which in the case of electronic filing with the Securities Exchange
          Commission of any such financial statement shall be by separate delivery of such
          certificate): 

		    (a)              Covenant
Compliance — the information (including detailed                calculations)
required in order to establish whether the Company was in                compliance with
the requirements of Section 10.1, 10.2, 10.3(j), 10.3(k),                10.4,
10.5(h) through (l), 10.6 and 10.7hereof, inclusive, during the
               quarterly or annual period covered by the statements then being furnished
               (including with respect to each such Section, where applicable, the
calculations                of the maximum or minimum amount, ratio or percentage, as the
case may be,                permissible under the terms of such Sections, and the
calculation of the amount,                ratio or percentage then in existence); and  

		    (b)              Event
of Default — a statement that such officer has reviewed the
               relevant terms hereof and that such review shall not have disclosed the
               existence during the quarterly or annual period covered by the statements
then                being furnished of any condition or event that constitutes a Default
or an Event                of Default or, if any such condition or event existed or
exists, specifying the                nature and period of existence thereof and what
action the Company shall have                taken or proposes to take with respect
thereto.  

         Section 7.3.       
          Visitation. The Company shall permit the representatives of each holder
          of Notes that is an Institutional Investor: 

		    (a)              No
Default — if no Default or Event of Default then exists, at the
               expense of such holder and upon reasonable prior notice to the Company and
               during normal business hours, to visit the principal executive office of
the                Company, to discuss the affairs, finances and accounts of the Company
and its                Subsidiaries with the Company’s officers, and (with the
consent of the                Company, which consent will not be unreasonably withheld)
to visit the other                offices and properties of the Company and each
Subsidiary, all at such                reasonable times and as often as may be reasonably
requested in writing not to                exceed seven (7) visits per year per
holder of Notes that is an                Institutional Investor; and  

-20- 

		    (b)              Default — if
a Default or Event of Default then exists, at the                expense of the Company,
to visit and inspect any of the offices or properties of                the Company or
any Subsidiary, to examine all their respective books of account,                records,
reports and other papers, to make copies and extracts therefrom, and to
               discuss their respective affairs, finances and accounts with their
respective                officers and independent public accountants (and by this
provision the Company                authorizes said accountants to discuss the affairs,
finances and accounts of the                Company and its Subsidiaries), all at such
times and as often as may be                requested.  

     SECTION 8.    
          PAYMENT OF THE NOTES. 

         Section 8.1.       
          Required Prepayments. (a) There are no required prepayments on the
          Tranche A Notes. The entire unpaid principal amount of the Tranche A Notes
          shall become due and payable on August 23, 2014. 

         (b)       
          There are no required prepayments on the Tranche B Notes. The entire unpaid
          principal amount of the Tranche B Notes shall become due and payable on
          August 23, 2017. 

         Section 8.2.       
          Optional Prepayments with Prepayment Premium. (a) The Company may,
          at its option, upon notice as provided below, prepay at any time all, or from
          time to time any part of, the Notes of any Series or of any separate tranche of
          any Series (if any Series has more than one separate tranches), then, in an
          amount not less than 10% of the original aggregate principal amount of the Notes
          of such Series (or such separate tranche) to be prepaid in the case of a partial
          prepayment (or such lesser amount as shall be required to effect a partial
          prepayment resulting from an offer of prepayment pursuant to Section 10.6),
          at 100% of the principal amount so prepaid, together with interest accrued
          thereon to the date of such prepayment, plus the Prepayment Premium, if any, and
          the LIBOR Breakage Amount (unless the date specified for prepayment is an
          Interest Payment Date) and determined for the prepayment date with respect to
          such principal amount of each Note then outstanding of the applicable Series (or
          tranche) to be prepaid. The Company will give each holder of Notes written
          notice of each optional prepayment under this Section 8.2 not less than 30
          days and not more than 60 days prior to the date fixed for such prepayment. Each
          such notice shall specify such date (which shall be a Business Day), the
          aggregate principal amount of the Notes of the applicable Series (or tranche) to
          be prepaid on such date, the principal amount of each Note held by such holder
          to be prepaid (determined in accordance with Section 8.3), and the interest
          to be paid on the prepayment date with respect to such principal amount being
          prepaid, and shall be accompanied by a certificate of a Senior Financial Officer
          as to the estimated respective Prepayment Premium, if any due in connection with
          such prepayment (calculated as if the date of such notice were the date of the
          prepayment), setting forth the details of such computation. Two Business Days
          prior to such prepayment, the Company shall deliver to each holder of Notes of
          the Series (or tranche) to be prepaid a certificate of a Senior Financial
          Officer specifying the calculation of each such Prepayment Premium as of the
          specified prepayment date. 

         (b)       
          Notwithstanding anything contained in this Section 8.2(a) to the contrary,
          if and so long as any Default or Event of Default exists, any partial prepayment
          of the Notes pursuant to the provisions of this Section 8.2 shall be
          allocated among all of the Notes at the time outstanding in proportion, as
          nearly as practicable, to the respective unpaid principal amounts thereof
          (without regard to Series or tranche). 

-21- 

         (c)       
          The term “LIBOR Breakage Amount” shall mean any loss, cost or
          expense (other than lost profits) actually incurred by any holder of a Series
          2007A Note as a result of any payment or prepayment of any Series 2007A Note on
          a day other than a regularly scheduled Interest Payment Date for such Series
          2007A Note or at the scheduled maturity (whether voluntary, mandatory,
          automatic, by reason of acceleration or otherwise), and any loss or expense
          arising from the liquidation or reemployment of funds obtained by it or from
          fees payable to terminate the deposits from which such funds were obtained,
          provided that any such loss, cost or expense shall be limited to the time
          period from the date of such prepayment through the earlier of (i) the next
          Interest Payment Date, or (ii) the maturity date of the Notes. Each holder
          shall determine the LIBOR Breakage Amount with respect to the principal amount
          of its Series 2007A Notes then being paid or prepaid (or required to be paid or
          prepaid) by written notice to the Company setting forth such determination in
          reasonable detail not less than two Business Days prior to the date of
          prepayment in the case of any prepayment pursuant to Section 8.2(a)
          and not less than one Business Day in the case of any payment required by
          Section 12.1. Each such determination shall be presumptively correct absent
          manifest error. 

         Section 8.3.       
          Allocation of Partial Prepayments. In the case of each partial prepayment
          of the Notes pursuant to the provisions of Section 8.2, subject to the
          terms of Section 8.2(b), the principal amount of the Notes of any Series
          (or separate tranche of such Series) to be prepaid shall be allocated among all
          of the Notes of such Series (or of such separate tranche) at the time
          outstanding in proportion, as nearly as practicable, to the respective unpaid
          principal amounts thereof. All regularly scheduled partial prepayments made with
          respect to any Series of Additional Notes pursuant to any Supplement shall be
          allocated as provided therein. 

         Section 8.4.       
          Maturity; Surrender, Etc. In the case of each prepayment of Notes
          pursuant to this Section 8, the principal amount of each Note to be prepaid
          shall mature and become due and payable on the date fixed for such prepayment
          (which shall be a Business Day), together with interest on such principal amount
          accrued to such date and the applicable Prepayment Premium, if any. From and
          after such date, unless the Company shall fail to pay such principal amount when
          so due and payable, together with the interest and Prepayment Premium, if any,
          as aforesaid, interest on such principal amount shall cease to accrue. Any Note
          paid or prepaid in full shall be surrendered to the Company and cancelled and
          shall not be reissued, and no Note shall be issued in lieu of any prepaid
          principal amount of any Note. 

         Section 8.5.       
          Purchase of Notes. The Company will not and will not permit any Affiliate
          to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
          the outstanding Notes of any Series (or any separate tranche of such Series)
          except (a) upon the payment or prepayment of the Notes of any tranche of any
          Series in accordance with the terms of this Agreement (including any Supplement
          hereto) and the Notes or (b) pursuant to a written offer to purchase any
          outstanding Notes of any tranche of any Series made by the Company or an
          Affiliate pro rata to the holders of the Notes of such tranche of such Series
          upon the same terms and conditions; provided, that if and so long as any
          Default or Event of Default exists, such written offer shall be made pro rata to
          the holders of the Notes of all Series upon the same terms and conditions. The
          Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
          to any payment, prepayment or purchase of Notes pursuant to any provision of
          this Agreement and no Notes may be issued in substitution or exchange for any
          such Notes. 

-22- 

         Section 8.6.       
          Change in Control. (a) Notice of Change in Control or Control
          Event. The Company will, within 15 Business Days after any Responsible
          Officer has knowledge of the occurrence of any Change in Control or Control
          Event, give written notice of such Change in Control or Control Event to each
          holder of Notes unless notice in respect of such Change in Control (or
          the Change in Control contemplated by such Control Event) shall have been given
          pursuant to subparagraph (b) of this Section 8.6. If a Change in Control
          has occurred, such notice shall contain and constitute an offer to prepay Notes
          of each Series as described in subparagraph (c) of this Section 8.6 and
          shall be accompanied by the certificate described in subparagraph (g) of this
          Section 8.6. 

         (b)       
          Condition to Company Action. The Company will not take any action that
          consummates or finalizes a Change in Control unless (i) at least
          15 Business Days prior to such action it shall have given to each holder of
          Notes written notice containing and constituting an offer to prepay Notes as
          described in subparagraph (c) of this Section 8.6, accompanied by the
          certificate described in subparagraph (g) of this Section 8.6, and
          (ii) contemporaneously with such action, it prepays all Notes required to
          be prepaid in accordance with this Section 8.6. 

         (c)       
          Offer to Prepay Notes. The offer to prepay Notes contemplated by
          subparagraphs (a) and (b) of this Section 8.6 shall be an offer to prepay,
          in accordance with and subject to this Section 8.6, all, but not less than
          all, of the Notes held by each holder (in this case only,
          “holder” in respect of any Note registered in the name of a
          nominee for a disclosed beneficial owner shall mean such beneficial owner) on a
          date specified in such offer (the “Proposed Prepayment Date”).
          If such Proposed Prepayment Date is in connection with an offer contemplated by
          subparagraph (a) of this Section 8.6, such date shall be not less than
          20 days and not more than 30 days after the date of such offer (if the
          Proposed Prepayment Date shall not be specified in such offer, the Proposed
          Prepayment Date shall be the 20th day after the date of such offer). 

         (d)       
          Acceptance; Rejection. A holder of Notes may accept or reject the offer
          to prepay made pursuant to this Section 8.6 by causing a notice of such
          acceptance or rejection to be delivered to the Company at least 5 Business Days
          prior to the Proposed Prepayment Date. A failure by a holder of Notes
          to so respond to an offer to prepay made pursuant to this Section 8.6 shall
          be deemed to constitute a rejection of such offer by such holder. 

         (e)       
          Prepayment. Prepayment of the Notes to be prepaid pursuant to this
          Section 8.6 shall be at 100% of the principal amount of such Notes,
          together with interest on such Notes accrued to the date of prepayment, and
          without the payment of any Prepayment Premium. The prepayment shall be made on
          the Proposed Prepayment Date, except as provided in subparagraph (f) of this
          Section 8.6. 

         (f)       
          Deferral Pending Change in Control. The obligation of the Company to
          prepay Notes pursuant to the offers required by subparagraph (b) and
          accepted in accordance with subparagraph (d) of this Section 8.6 is
          subject to the occurrence of the Change in Control in respect of which such
          offers and acceptances shall have been made. In the event that such Change in
          Control does not occur on the Proposed Prepayment Date in respect thereof, the
          prepayment shall be deferred until and shall be made on the date on which such
          Change in Control occurs. The Company shall keep each holder of Notes reasonably
          and timely informed of (i) any such deferral of the date of prepayment,
          (ii) the date on which such Change in Control and the prepayment are
          expected to occur, and (iii) any determination by the Company that efforts
          to effect such Change in Control have ceased or been abandoned (in which case
          the offers and acceptances made pursuant to this Section 8.6 in respect of
          such Change in Control shall be deemed rescinded). 

-23- 

         (g)       
          Officer’s Certificate. Each offer to prepay the Notes pursuant to
          this Section 8.6 shall be accompanied by a certificate, executed by a
          Senior Financial Officer of the Company and dated the date of such offer,
          specifying: (i) the Proposed Prepayment Date; (ii) that such offer is
          made pursuant to this Section 8.6; (iii) the principal amount of each
          Note offered to be prepaid; (iv) the interest that would be due on each
          Note offered to be prepaid, accrued to the Proposed Prepayment Date;
          (v) that the conditions of this Section 8.6 have been fulfilled; and
          (vi) in reasonable detail, the nature and date or proposed date of the
          Change in Control. 

         (h)       
          Effect on Required Payments. The amount of each payment of the principal
          of the Notes made pursuant to this Section 8.6 shall be applied against and
          reduce each of the then remaining regularly scheduled principal payments due
          hereunder by a percentage equal to the aggregate principal amount of the Notes
          so paid divided by the aggregate principal amount of the Notes outstanding
          immediately prior to such payment. 

         (i)       
          “Change in Control” Defined. “Change in
          Control” means any of the following events or circumstances: 

		    (i)                             Any
Person or group of Persons (within the meaning of Section 13 or 14 of the
               Securities Exchange Act of 1934) shall acquire beneficial ownership
(within the                meaning of Rule 13d-3 promulgated under such Act) of 30% or
more of the                outstanding shares of common stock of the Company; or  

		    (ii)                             during
any 12-month period, individuals who at the beginning of such period
               constituted the Company’s Board of Directors (together with any new
               directors whose election by the Company’s Board of Directors or whose
               nomination for election by the Company’s shareholders was approved by
a                vote of at least two-thirds of the directors who either were directors
at the                beginning of such period or whose election or nomination was
previously so                approved) cease for any reason to constitute a majority of
the Board of                Directors of the Company; or  

         (j)       
          “Control Event” Defined. “Control Event”
          means: 

		    (i)                             the
execution by the Company or any of its Subsidiaries or Affiliates of any
               agreement or letter of intent with respect to any proposed transaction or
event                or series of transactions or events which, individually or in the
aggregate, may                reasonably be expected to result in a Change in Control,  

-24- 

		    (ii)                             the
execution of any written agreement which, when fully performed by the
               parties thereto, would result in a Change in Control, or  

		    (iii)                             the
making of any written offer by any person (as such term is used in section
               13(d) and section 14(d)(2) of the Exchange Act as in effect on the date of
the                Closing) or related persons constituting a group (as such term is used
in Rule                13d-5 under the Exchange Act as in effect on the date of the
Closing) to the                holders of the common stock of the Company, which offer,
if accepted by the                requisite number of holders, would result in a Change
in Control.  

     SECTION 9.    
          AFFIRMATIVE COVENANTS. 

        The
Company covenants that so long as any of the Notes are outstanding: 

         Section 9.1.       
          Compliance with Law. Without limiting Section 10.9, the Company
          will, and will cause each of its Subsidiaries to, comply with all laws,
          ordinances or governmental rules or regulations to which each of them is
          subject, including, without limitation, ERISA, the USA Patriot Act and
          Environmental Laws, and will obtain and maintain in effect all licenses,
          certificates, permits, franchises and other governmental authorizations
          necessary to the ownership of their respective properties or to the conduct of
          their respective businesses, in each case to the extent necessary to ensure that
          non-compliance with such laws, ordinances or governmental rules or regulations
          or failures to obtain or maintain in effect such licenses, certificates,
          permits, franchises and other governmental authorizations would not,
          individually or in the aggregate, reasonably be expected to have a Material
          Adverse Effect. 

         Section 9.2.       
          Insurance. The Company will, and will cause each of its Subsidiaries to,
          maintain, with financially sound and reputable insurers, insurance with respect
          to their respective properties and businesses against such casualties and
          contingencies, of such types, on such terms and in such amounts (including
          deductibles, co-insurance and self-insurance, if adequate reserves are
          maintained with respect thereto) as is customary in the case of entities of
          established reputations engaged in the same or a similar business and similarly
          situated except for any non-maintenance that would not reasonably be expected to
          have a Material Adverse Effect. 

         Section 9.3.       
          Maintenance of Properties. The Company will, and will cause each of its
          Subsidiaries to, maintain and keep, or cause to be maintained and kept, their
          respective properties necessary to the conduct of their business in reasonably
          good repair, working order and condition (other than ordinary wear and tear),
          provided that this Section shall not prevent the Company or any
          Subsidiary from discontinuing the operation and the maintenance of any of its
          properties if such discontinuance is desirable in the conduct of its business
          and the Company has concluded that such discontinuance would not, individually
          or in the aggregate, reasonably be expected to have a Material Adverse Effect. 

-25- 

         Section 9.4.       
          Payment of Taxes. The Company will, and will cause each of its
          Subsidiaries to, file all Federal and other material tax returns required to be
          filed in any jurisdiction and to pay and discharge all taxes shown to be due and
          payable on such returns and all other taxes or governmental charges imposed on
          them or any of their properties, assets, income or franchises, to the extent
          such taxes have become due and payable and before they have become delinquent,
          provided that neither the Company nor any Subsidiary need pay any such
          tax if (i) the amount, applicability or validity thereof is contested by
          the Company or such Subsidiary in good faith and by appropriate action, and the
          Company or a Subsidiary has established adequate reserves therefor in accordance
          with GAAP on the books of the Company or such Subsidiary or (ii) the
          non-filing or nonpayment, as the case may be, of all such taxes in the aggregate
          would not reasonably be expected to have a Material Adverse Effect. 

         Section 9.5.       
          Corporate Existence, Etc. Subject to Sections 10.6 and 10.7,
          the Company will at all times preserve and keep in full force and effect its
          corporate existence, and will at all times preserve and keep in full force and
          effect the corporate existence of each of its Significant Subsidiaries (unless
          merged into the Company or a Subsidiary) and all rights and franchises of the
          Company and such Subsidiaries unless, in the good faith judgment of the Company,
          the termination of or failure to preserve and keep in full force and effect such
          corporate existence, right or franchise would not, individually or in the
          aggregate, have a Material Adverse Effect. 

         Section 9.6.       
          Notes to Rank Pari Passu. The Notes and all other obligations under this
          Agreement of the Company are and at all times shall remain direct and unsecured
          obligations of the Company ranking pari passu as against the assets of
          the Company with all other Notes from time to time issued and outstanding
          hereunder without any preference among themselves and pari passu with all
          Debt outstanding of the Company under the Bank Credit Agreement and all other
          present and future unsecured Debt (actual or contingent) of the Company which is
          not expressed to be subordinate or junior in rank to any other unsecured Debt of
          the Company. 

         Section 9.7.       
          Subsidiary Guarantors. The Company will cause any Subsidiary which is or
          which is required by the terms of the Bank Credit Agreement to become a party
          to, or otherwise guarantee, Debt in respect of the Bank Credit Agreement, to
          enter into the Subsidiary Guaranty and deliver to each of the holders of the
          Notes (concurrently with the incurrence of any such obligation pursuant to the
          Bank Credit Agreement) the following items: 

		    (a)                        a
joinder agreement in respect of the Subsidiary Guaranty;  

		    (b)                             a
certificate signed by an authorized Responsible Officer of the Company making
               representations and warranties to the effect of those contained in
               Sections 5.4, 5.6 and 5.7, with respect to such Subsidiary and the
               Subsidiary Guaranty, as applicable; and  

		    (c)                             an
opinion of counsel (who may be in-house counsel for the Company) addressed to
               each of the holders of the Notes satisfactory to the Required Holders, to
the                effect that the Subsidiary Guaranty by such Person has been duly
authorized,                executed and delivered and that the Subsidiary Guaranty
constitutes the legal,                valid and binding contract and agreement of such
Person enforceable in                accordance with its terms, except as an enforcement
of such terms may be limited                by bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting the                enforcement of creditors’ rights
generally and by general equitable                principles.  

-26- 

         Section 9.8.       
          Books and Records. The Company will, and will cause each of its
          Subsidiaries to, maintain books of record and account sufficient to enable the
          preparation of financial statements in accordance with GAAP and all applicable
          requirements of any Governmental Authority having legal or regulatory
          jurisdiction over the Company or such Subsidiary, as the case may be. 

         Section 9.9.       
          Intercreditor Agreement. The Company agrees that it will not permit any
          Subsidiary to have one or more bank credit facilities or other Debt agreements
          or instruments (a “Designated Debt Agreement”) (or any
          Suretyship Liabilities with respect to any Designated Debt Agreement of the
          Company or any other Subsidiary Guarantor) that could permit unsecured Debt to
          be outstanding thereunder in an aggregate principal amount in excess of 10% of
          consolidated total assets (the “Threshold Debt Amount”), unless
          each provider of such Debt (and beneficiaries of any such Suretyship Liabilities
          and each such Subsidiary if it is not already a party to the Intercreditor
          Agreement), becomes a party to the Intercreditor Agreement, in accordance with
          the terms thereof. The following Debt shall be excluded from the Threshold Debt
          Amount: (i) Debt outstanding under overdraft lines of credit incurred in
          the ordinary course of business, (ii) Debt of Subsidiaries in an amount
          equal to $19,725,166 (or an equivalent amount in foreign currency) and scheduled
          on Schedule 5.15, (iii) secured Debt of Subsidiaries, including
          Securitization Obligations, and (iv) Debt of Subsidiaries in which the
          providers of such Debt (and beneficiaries of any Suretyship Liabilities) are
          party to the Intercreditor Agreement. 

SECTION 10. NEGATIVE
COVENANTS. 

        The
Company covenants that so long as any of the Notes are outstanding: 

         Section 10.1.       
          Consolidated Debt to Consolidated EBITDA. The Company will not permit the
          ratio of Consolidated Debt to Consolidated EBITDA as of the last day of
          any Computation Period to exceed 3.75 to 1.00; provided, however, that
          the ratio of Consolidated Debt to Consolidated EBITDA may exceed 3.75 to 1.00 as
          of the last day of any Computation Period during a Transition Period if such
          ratio of Consolidated Debt to Consolidated EBITDA exceeded 3.75 to 1.00 as of
          such date as a result of the Company or any Subsidiary creating, assuming,
          incurring, guaranteeing or otherwise becoming liable in respect of Acquisition
          Debt (hereinafter referred to as a “Permitted Debt Increase”),
          so long as (i) the ratio of Consolidated Debt to Consolidated EBITDA as of
          such date during any Transition Period shall not exceed 4.00 to 1.00, (ii) the
          Company shall have paid the additional interest as provided in Section
          1.2(a)(i), (iii) such Acquisition Debt is not less than $75,000,000, and
          (iv) a Permitted Debt Increase has not occurred on more than three (3)
          occasions. 

         Section 10.2.       
          Interest Coverage Ratio. The Company will not permit the ratio of
          Consolidated EBITDA to Consolidated Interest Expense as of the last day of any
          Computation Period to be less than 2.50 to 1.00. 

-27- 

    Section 10.3. Subsidiary
Debt. The Company will not at any time permit any Significant Subsidiary to have,
create, incur, assume or suffer to exist, or otherwise be liable, for any Debt, except:  

		    (a)                             Debt
of any Significant Subsidiary existing as of the date hereof and reflected
               in Schedule 10.3;  

		    (b)                             Debt
of any Significant Subsidiary secured by Liens permitted by                Section 10.5(g);  

		    (c)                             Debt
of any Significant Subsidiary secured by Liens permitted by                Section 10.5(h);  

		    (d)                             refinancings,
extensions or renewals of any of the foregoing Debt so long as the
               material terms applicable to such refinanced Debt are no less favorable to
the                Company or the applicable Significant Subsidiary, taken as a whole,
than the                material terms in effect immediately prior to such refinancing
and the principal                amount thereof is not increased;  

		    (e)                             Subordinated
Debt;  

		    (f)                             Debt
of a Person acquired in connection with an Acquisition that was not
               incurred in contemplation thereof;  

		    (g)                             Debt
constituting Securitization Obligations permitted by Section 10.4
               hereof;  

		    (h)                             Debt
evidenced by the Subsidiary Guaranties;  

		    (i)                             Suretyship
Liabilities with respect to Debt of the Company; provided that                each
Significant Subsidiary obligated under such Suretyship Liability is
               obligated under a Subsidiary Guaranty and the beneficiaries of such
Suretyship                Liabilities are party to the Intercreditor Agreement;  

		    (j)                             other
unsecured Debt of Domestic Subsidiaries that are Significant Subsidiaries, provided
that the aggregate amount of all such Debt shall not at any time
               exceed an amount equivalent to 5% of the consolidated total assets of the
               Company and its Subsidiaries, determined as of the last day of the fiscal
               quarter most recently then ended; and  

		    (k)                             other
unsecured Debt of Foreign Subsidiaries that are Significant Subsidiaries, provided that,
at the time of incurrence thereof, the Company is in pro                forma compliance
with the covenants set forth in Section 10.1 and Section 10.2                hereof.  

    Section 10.4. Securitization
Obligations. The Company will not at any time permit the aggregate outstanding amount
of Securitization Obligations to exceed the greater of (i) $150,000,000 and (ii) 12%
of the consolidated total assets of the Company and its Subsidiaries, determined as of
the last day of the fiscal quarter most recently then ended.  

-28- 

         Section 10.5.       
          Limitation on Liens. The Company will not, and will not permit any of its
          Significant Subsidiaries to create, incur or permit to exist any Lien on or with
          respect to any property or asset of the Company or any such Significant
          Subsidiary, whether now owned or held or hereafter acquired, or any income or
          profits therefrom (unless it makes, or causes to be made, effective provision
          whereby the Notes will be equally and ratably secured with any and all other
          obligations thereby secured, such security to be pursuant to an agreement
          reasonably satisfactory to the Required Holders and, in any such case, the Notes
          shall have the benefit, to the fullest extent that, and with such priority as,
          the holders of the Notes may be entitled under applicable law, of an equitable
          Lien on such property), except: 

		    (a)                             Liens
for taxes or other governmental charges that are not yet due and payable
               or the payment of which is not at the time required by Section 9.4;  

		    (b)                             any
attachment or judgment or similar Lien, unless the judgment it secures shall
               not, within 90 days after the entry thereof, have been discharged or
execution                thereof stayed pending appeal, or shall not have been discharged
within 60 days                after the expiration of any such stay;  

		    (c)                             Liens
incidental to the conduct of business or the ownership of properties and
               assets (including landlords’, carriers’, warehousemen’s,
               mechanics’, materialmen’s and other similar Liens for sums not
overdue                or being contested in good faith by appropriate proceedings) and
Liens to secure                the performance of bids, tenders, leases, or trade
contracts, or to secure                statutory obligations (including obligations under
workers compensation,                unemployment insurance and other social security
legislation), surety or appeal                bonds or other Liens incurred in the
ordinary course of business and not in                connection with the borrowing of
money;  

		    (d)                             leases
or subleases or licenses or sublicenses granted to others, easements,
               rights-of-way, restrictions and other similar charges or encumbrances, in
each                case incidental to the ownership of property or assets or the
ordinary conduct                of the business of the Company or any of its Significant
Subsidiaries, or Liens                incidental to minor survey exceptions and the like,
provided that such                Liens do not, in the aggregate, interfere in any
material respect with the                ordinary conduct of business of the Company or
any Significant Subsidiary;  

		    (e)                             Liens
securing Debt of a Significant Subsidiary to the Company or to a
               Subsidiary Guarantor;  

		    (f)                             Liens
existing as of the Closing Date and reflected in Schedule 10.5;  

		    (g)                             Liens
arising solely by virtue of any statutory or common law provision relating
               to banker’s liens, rights of set-off or similar rights and remedies
as to                deposit accounts or other funds maintained with a creditor
depository                institution; provided that (i) such deposit account is not
a dedicated cash                collateral account and is not subject to restrictions
against access by the                Company or the applicable Significant Subsidiary in
excess of those set forth by                regulations promulgated by the FRB and (ii)
such deposit account is not intended                by the Company or any Subsidiary to
provide collateral to such depository                institution;  

-29- 

		    (h)                             Liens
incurred after the Closing Date given to secure the payment of the
               purchase price incurred in connection with the acquisition, construction
or                improvement of property (other than accounts receivable or inventory)
useful and                intended to be used in carrying on the business of the Company
or a Significant                Subsidiary, including Liens existing on such property at
the time of                acquisition, construction or improvement thereof or Liens
incurred within 365                days of such acquisition or completion of such
construction or improvement, provided that (i) the Lien shall attach solely
to the property                acquired, purchased, constructed or improved; (ii) at
the time of                acquisition, construction or improvement of such property (or,
in the case of                any Lien incurred within three hundred sixty-five (365)
days of such acquisition                or completion of such construction or
improvement, at the time of the incurrence                of the Debt secured by such
Lien), the aggregate amount remaining unpaid on all                Debt secured by Liens
on such property shall not exceed the lesser of                (y) the cost of such
acquisition, construction or improvement or                (z) the Fair Market Value
of such property (as determined in good faith by                one or more officers of
the Company to whom authority to enter into the                transaction has been
delegated by the board of directors of the Company); and                (iii) at the
time of such incurrence and after giving effect thereto, no                Default or
Event of Default would exist; provided that individual financings                provided
by one Person (or an Affiliate thereof) may be cross-collateralized to
               other financings provided by such Person and its Affiliates;  

		    (i)                             any
Lien existing on property of a Person immediately prior to its being
               consolidated with or merged into the Company or a Significant Subsidiary,
or any                Lien existing on any property acquired by the Company or any
Significant                Subsidiary at the time such property is so acquired (whether
or not the Debt                secured thereby shall have been assumed), provided that
(i) no such                Lien shall have been created or assumed in contemplation
of such consolidation                or merger or such Person’s becoming a
Significant Subsidiary or such                acquisition of property, (ii) each
such Lien shall extend solely to the                item or items of property so acquired
and, if required by the terms of the                instrument originally creating such
Lien, other property which is an improvement                to or is acquired for
specific use in connection with such acquired property,                and (iii) at
the time of such incurrence and after giving effect thereto,                no Default or
Event of Default would exist;  

		    (j)                             any
refinancings, extensions, renewals or replacements of any Lien permitted by
               the preceding subparagraphs (f), (h) and (i) of this Section 10.5, provided
that (i) no additional property shall be encumbered by such
               Liens, (ii) the unpaid principal amount of the Debt or other
obligations                secured thereby shall not be increased on or after the date of
any extension,                renewal or replacement, and (iii) at such time and
immediately after giving                effect thereto, no Default or Event of Default
shall have occurred and be                continuing;  

-30- 

		    (k)                             Liens
securing Securitization Obligations; and  

		    (l)                             other
Liens securing outstanding obligations not at any time exceeding the
               greater of (i) $40,000,000 and (ii) 5% of the consolidated
tangible                assets of the Company and its Subsidiaries, determined as of the
last day of the                fiscal quarter most recently then ended.  

        Any
Lien permitted above on any property may extend to the identifiable proceeds of such
property. 

         Section 10.6.       
          Sale of Assets. The Company will not, and will not permit any Subsidiary
          Guarantor to, sell, lease or otherwise dispose of any substantial part (as
          defined below) of the assets of the Company and its Subsidiaries; provided,
          however, that the Company or any Subsidiary Guarantor may sell, lease or
          otherwise dispose of assets constituting a substantial part of the assets of the
          Company and its Subsidiaries if such assets are sold in an arms length
          transaction and, at such time and after giving effect thereto, no Default or
          Event of Default shall have occurred and be continuing and an amount equal to
          the net proceeds received from such sale, lease or other disposition (but only
          with respect to that portion of such assets that exceeds the definition of
          “substantial part” set forth below) shall be used within 365 days
          (or with respect to which the Company has entered into binding commitments
          within 365 days of such sale, lease or disposition (but only to the extent
          such amounts are applied within 425 days after such sale, lease or
          disposition pursuant to such commitments)) of such sale, lease or disposition,
          in any combination: 

		    (1)                             to
acquire productive assets used or useful in carrying on the business of the
               Company and its Subsidiaries and having a value at least equal to the
value of                such assets sold, leased or otherwise disposed of; and/or  

		    (2)                             to
prepay or retire Senior Debt of the Company and/or its Subsidiaries, provided that(i) the
Company shall offer to prepay each                outstanding Note in a principal amount
which equals the Ratable Portion for such                Note, and (ii) any such
prepayment of the Notes shall be made at par,                together with accrued
interest thereon to the date of such prepayment, but                without the payment
of the Prepayment Premium, but including the LIBOR Breakage                Amount if the
date of such prepayment is not on an Interest Payment Date. Any                offer of
prepayment of the Notes pursuant to this Section 10.6 shall be                given
to each holder of the Notes by written notice that shall be delivered not
               less than fifteen (15) days and not more than sixty (60) days prior to the
               proposed prepayment date. Each such notice shall state that it is given
pursuant                to this Section and that the offer set forth in such notice must
be accepted by                such holder in writing and shall also set forth (i) the
prepayment date,                (ii) a description of the circumstances which give
rise to the proposed                prepayment and (iii) a calculation of the
Ratable Portion for such                holder’s Notes. Each holder of the Notes
which desires to have its Notes                prepaid shall notify the Company in
writing delivered not less than five (5)                Business Days prior to the
proposed prepayment date of its acceptance of such                offer of prepayment.
Prepayment of Notes pursuant to this Section 10.6                shall be made in
accordance with Section 8.2 (but without payment of any                Prepayment
Premium).  

-31- 

        As
used in this Section 10.6, a sale, lease or other disposition of assets shall be
deemed to be a “substantial part” of the assets of the Company and its
Subsidiaries if the book value of such assets, when added to the book value of all other
assets sold, leased or otherwise disposed of by the Company and its Subsidiaries during
the period of 12 consecutive months ending on the date of such sale, lease or other
disposition, exceeds 15% of the book value of consolidated tangible assets of the Company
and its Subsidiaries, determined as of the end of the fiscal quarter immediately preceding
such sale, lease or other disposition; provided that there shall be excluded from
any determination of a “substantial part” any (i) sale, lease or
disposition of assets in the ordinary course of business of the Company and its
Subsidiaries, (ii) any transfer of assets from the Company to any Subsidiary or from
any Subsidiary to the Company or a Subsidiary; (iii) any sale or transfer of property
acquired by the Company or any Subsidiary after the date of this Agreement to any Person
within 365 days following the acquisition or construction of such property by the Company
or any Subsidiary if the Company or a Subsidiary shall concurrently or substantially
currently with such sale or transfer, lease such property, as lessee, and
(iv) dispositions of accounts receivable, lease receivables, other financial assets
and other rights and related assets pursuant to a Permitted Securitization. 

         Section 10.7.       
          Merger and Consolidation. The Company will not, and will not permit any
          Subsidiary Guarantor to, consolidate with or merge with any other Person or
          convey, transfer or lease substantially all of its assets in a single
          transaction or series of related transactions to any Person; provided
          that: 

		    (1)                             any
Subsidiary Guarantor of the Company may (x) consolidate with or merge
               with, or convey, transfer or lease substantially all of its assets in a
single                transaction or series of transactions to, (i) the Company or a
Subsidiary so                long as in any merger or consolidation involving the
Company, the Company shall                be the surviving or continuing corporation and
in any merger or consolidation                involving a Subsidiary, if a Subsidiary
Guarantor is not the surviving or                continuing corporation, such Subsidiary
shall have executed and delivered to                each holder of Notes its assumption
of the due and punctual performance and                observance of each covenant and
condition of the Subsidiary Guaranty (pursuant                to such agreements and
instruments as shall be reasonably satisfactory to the                Required Holders),
and such Subsidiary shall have caused to be delivered to each                holder of
Notes (A) an opinion of nationally recognized independent counsel
               (which may be counsel to the Company), to the effect that all agreements
or                instruments effecting such assumption are enforceable in accordance
with their                terms (subject to customary assumptions and exceptions) and (B) an
               acknowledgment from each other Subsidiary Guarantor that the Subsidiary
Guaranty                continues in full force and effect, or (ii) any other Person so
long as the                survivor is a Subsidiary Guarantor, if at such time and after
giving effect                thereto, no Default or Event of Default shall have occurred
and be continuing,                or (y) convey, transfer or lease all or
substantially all of its assets in                compliance with the provisions of
Section 10.6; or  

-32- 

		    (2)                             the
foregoing restriction does not apply to the consolidation or merger of the
               Company with, or the conveyance, transfer or lease of substantially all of
the                assets of the Company in a single transaction or series of
transactions to, any                Person so long as:  

		    (a)                                   the
successor formed by such consolidation or the survivor of such merger or           the
Person that acquires by conveyance, transfer or lease substantially all of           the
assets of the Company as an entirety, as the case may be (the “Successor Entity”),
shall be a solvent entity organized and           existing under the laws of the United
States of America, any State thereof or           the District of Columbia;  

		    (b)                                   if
the Company is not the Successor Entity, such Successor Entity shall have
          executed and delivered to each holder of Notes its assumption of the due and
          punctual performance and observance of each covenant and condition of this
          Agreement (and each Supplement thereto) and the Notes (pursuant to such
          agreements and instruments as shall be reasonably satisfactory to the Required
          Holders), and the Successor Corporation shall have caused to be delivered to
          each holder of Notes (A) an opinion of nationally recognized independent
          counsel, to the effect that all agreements or instruments effecting such
          assumption are enforceable in accordance with their terms (subject to customary
          assumptions and exceptions) and (B) an acknowledgment from each Subsidiary
          Guarantor that the Subsidiary Guaranty continues in full force and effect; and  

		    (c)                                   immediately
after giving effect to such transaction no Default or Event of           Default would
exist.  

         Section 10.8.       
          Transactions with Affiliates. The Company will not and will not permit
          any Subsidiary Guarantor to, enter into, or cause, suffer or permit to exist any
          transaction, arrangement or contract with any of its other Affiliates (other
          than the Company or another Subsidiary Guarantor) which is on terms, taken as a
          whole, which are less favorable to the Company or any Subsidiary Guarantor than
          are obtainable from any Person which is not one of its Affiliates under
          comparable circumstances, provided that this Section 10.8 shall not prohibit: 

		    (a)                             capital
contributions and distributions with respect to the equity interests of
               the Company or such Subsidiary Guarantor in the ordinary course of
business;  

		    (b)                             any
employment or severance agreement and any amendment thereto entered into by
               the Company or any other Subsidiary Guarantor in the ordinary course of
               business;  

		    (c)                             the
payment of reasonable directors’ fees and benefits;  

		    (d)                             the
provision of officers’ and directors’ indemnification and
               insurance in the ordinary course of business to the extent permitted by
               applicable law;  

-33- 

		    (e)                             non-interest
bearing (or below-market interest-bearing) intercompany loans or                other
advances in the ordinary course of business and consistent with past
               practice;  

		    (f)                             the
payment of employee salaries, bonuses and employee benefits in the ordinary
               course of business; or  

		    (g)                             intercompany
sales of goods at, or approximately at, cost.  

         Section 10.9.       
          Terrorism Sanctions
          Regulations. The Company will not and will not permit any Subsidiary
          to (a) become a Person described or designated in the Specially Designated
          Nationals and Blocked Persons List of the Office of Foreign Assets Control or in
          Section 1 of the Anti-Terrorism Order or (b) knowingly engage in any
          dealings or transactions with any such Person. 

         Section 10.10.       
          Non-Guarantor Domestic Subsidiaries. Not later than (a) one Business
          Day following the consummation of any Acquisition and (b) 30 days
          after the end of each calendar quarter, take all steps necessary to ensure that
          Domestic Subsidiaries that, together with the Company, account for (i) not
          less than 85% of the total assets of the Company and its Subsidiaries as of the
          date of determination, and (ii) not less than 85% of the total revenues of
          the Company and its Subsidiaries for the 12-month period ending on the last day
          of the calendar quarter ended immediately prior to the date of determination,
          are parties to the Subsidiary Guaranty; provided that no default shall
          occur under this Section 10.10 if, notwithstanding the minimum percentage
          specified above, all Domestic Subsidiaries as of such date of determination are
          parties to the Subsidiary Guaranty. 

         Section 10.11.       
          Most Favored Lender’s Covenant. If at any time (a) the Company
          enters into any credit, revolving loan, note or other like agreement under which
          the Company may incur Debt in excess of $50,000,000, including the Bank Credit
          Agreement (a “Principal Lending Agreement”) and (b) any
          such Principal Lending Agreement at any time includes a covenant that expressly
          limits either: (i) the sale, lease or disposition of assets by the Company
          and/or any Subsidiary during any period of 12 consecutive months to less
          than 15% of the book value of consolidated tangible assets of the Company and
          its Subsidiaries, or (ii) the incurrence of Debt by any Foreign Subsidiary,
          in either case which is not contained in this Agreement (including any
          Supplement) or if such covenant that is contained in the Principal Lending
          Agreement is more favorable to such creditors of the Company than a similar
          covenant contained in this Agreement, then and in such event the Company shall
          give written notice thereof to each holder of the Notes not later than 10 days
          following the date of execution of such Principal Lending Agreement or amendment
          thereof, as the case may be. Effective on the date of execution of such
          Principal Lending Agreement or amendment thereof, as the case may be, such
          covenant (or covenants) and related definitions that are contained in the
          Principal Lending Agreement (collectively, the “Incorporated
          Covenants”) shall then and thereupon be deemed to have been
          incorporated herein and any event of default in respect of any such Incorporated
          Covenant shall be deemed to be an Event of Default hereunder, subject to all
          applicable terms and provisions of this Agreement, including, without
          limitation, the right of the Required Holders to waive or not waive any breach
          thereof (independent of any right of any other creditor of the Company in
          respect of any such Incorporated Covenants). Without limiting the foregoing, any
          amendment, elimination or termination of any such Incorporated Covenant in
          accordance with the terms of the subject Principal Lending Agreement (including
          as a result of the termination of the Principal Lending Agreement) shall then
          and thereupon constitute an amendment, elimination or termination, as the case
          may be, of such Incorporated Covenant hereunder. 

-34- 

     SECTION 11.    
          EVENTS OF DEFAULT. 

        An
“Event of Default” shall exist if any of the following conditions or
events shall occur and be continuing: 

		    (a)                             the
Company defaults in the payment of any principal, or Prepayment Premium, if
               any, or LIBOR Breakage Amount, if any, on any Note when the same becomes
due and                payable, whether at maturity or at a date fixed for prepayment or
by declaration                or otherwise; or  

		    (b)                             the
Company defaults in the payment of any interest on any Note for more than
               five Business Days after the same becomes due and payable; or  

		    (c)                             the
Company defaults in the performance of or compliance with any term contained
               in Sections 9.9 or 10 or any covenant in a Supplement which
specifically                provides that it shall have the benefit of this paragraph (c)
or any                Subsidiary Guarantor defaults in the performance of or compliance
with any term                of the Subsidiary Guaranty beyond any period of grace or
cure period provided                with respect thereto; or  

		    (d)                             the
Company defaults in the performance of or compliance with any term contained
               herein or in any Supplement (other than those referred to in paragraphs
(a), (b)                and (c) of this Section 11) and such default is not remedied
within 30 days                after the earlier of (i) a Responsible Officer
obtaining actual knowledge                of such default or (ii) the Company
receiving written notice of such                default from any holder of a Note (any
such written notice to be identified as a                “notice of default” and
to refer specifically to this paragraph (d) of                Section 11); or  

		    (e)                             (i)
any Subsidiary Guaranty ceases to be a legally valid, binding and
               enforceable obligation or contract of a Subsidiary Guarantor (other than
upon a                release of any Subsidiary Guarantor from a Subsidiary Guaranty in
accordance                with the terms of Section 2.3(b) or (c) hereof), or any
Subsidiary                Guarantor or any party by, through or on account of any such
Person, challenges                the validity, binding nature or enforceability of any
such Subsidiary Guaranty;                and (ii) the Intercreditor Agreement ceases to
be in full force and effect for                any reason whatsoever (other than in
accordance with the terms thereof),                including without limitation, a
determination by any Governmental Authority or                court that the
Intercreditor Agreement in invalid, void or unenforceable; or  

		    (f)                             any
representation or warranty made in writing by or on behalf of the Company or
               Subsidiary Guarantor in this Agreement or any Subsidiary Guaranty or by
any                officer of the Company or any Subsidiary Guarantor in any writing
furnished in                connection with the transactions contemplated hereby or by
any Subsidiary                Guaranty proves to have been false or incorrect in any
material respect on the                date as of which made; or  

-35- 

		    (g)                             (i) the
Company, any Significant Subsidiary or any Subsidiary Guarantor is                in
default (as principal or as guarantor or other surety) in the payment of any
               principal of or premium or make-whole amount or interest (in the payment
amount                of at least $100,000) on any Debt other than the Notes that is
outstanding in an                aggregate principal amount of at least $50,000,000
beyond any period of grace                provided with respect thereto, or (ii) the
Company, any Significant                Subsidiary or any Subsidiary Guarantor is in
default in the performance of or                compliance with any term of any
instrument, mortgage, indenture or other                agreement relating to any Debt
other than the Notes in an aggregate principal                amount of at least
$50,000,000 or any other condition exists, and as a                consequence of such
default or condition such Debt has become, or has been                declared, due and
payable, or (iii) any event shall occur with respect to                any
Securitization Obligations that results in the holder or holders of such
               obligations, or any trustee or agent for such holder or holders, causing
the                replacement or resignation of the servicer with respect thereto; or  

		    (h)                             the
Company, any Significant Subsidiary or any Subsidiary Guarantor (i) is
               generally not paying, or admits in writing its inability to pay, its debts
as                they become due, (ii) files, or consents by answer or otherwise to
the                filing against it of, a petition for relief or reorganization or
arrangement or                any other petition in bankruptcy, for liquidation or to
take advantage of any                bankruptcy, insolvency, reorganization, moratorium
or other similar law of any                jurisdiction, (iii) makes an assignment
for the benefit of its creditors,                (iv) consents to the appointment of
a custodian, receiver, trustee or other                officer with similar powers with
respect to it or with respect to any                substantial part of its property, (v) is
adjudicated as insolvent or to be                liquidated, or (vi) takes corporate
action for the purpose of any of the                foregoing; or  

		    (i)                             a
court or governmental authority of competent jurisdiction enters an order
               appointing, without consent by the Company, any Significant Subsidiary or
any                Subsidiary Guarantor, a custodian, receiver, trustee or other officer
with                similar powers with respect to it or with respect to any substantial
part of its                property, or constituting an order for relief or approving a
petition for relief                or reorganization or any other petition in bankruptcy
or for liquidation or to                take advantage of any bankruptcy or insolvency
law of any jurisdiction, or                ordering the dissolution, winding-up or
liquidation of the Company, any                Significant Subsidiary or any Subsidiary
Guarantor, or any such petition shall                be filed against the Company, any
Significant Subsidiary or any Subsidiary                Guarantor, and such petition
shall not be dismissed within 60 days; or  

		    (j)                             a
final judgment or judgments at any one time outstanding for the payment of
               money aggregating in excess of $40,000,000 are rendered against one or
more of                the Company, any Significant Subsidiary or any Subsidiary
Guarantor and which                judgments are not, within 60 days after entry thereof,
bonded, discharged or                stayed pending appeal, or are not discharged within
60 days after the expiration                of such stay; or  

-36- 

		    (k)                             if
(i) any Plan shall fail to satisfy the minimum funding standards of
               ERISA or the Code for any plan year or part thereof or a waiver of such
               standards or extension of any amortization period is sought or granted
under                Section 412 of the Code, (ii) a notice of intent to
terminate any Plan                shall have been or is reasonably expected to be filed
with the PBGC or the PBGC                shall have instituted proceedings under Section 4042
of ERISA to terminate                or appoint a trustee to administer any Plan or the
PBGC shall have notified the                Company or any ERISA Affiliate that a Plan
may become a subject of any such                proceedings, (iii) the aggregate
“amount of unfunded benefit                liabilities” (within the meaning of
Section 4001(a)(18) of ERISA)                under all Plans, determined in
accordance with Title IV of ERISA, shall                exceed $25,000,000, (iv) the
Company or any ERISA Affiliate shall have                incurred or is reasonably
expected to incur any liability pursuant to Title I or                IV of ERISA or the
penalty or excise tax provisions of the Code relating to                employee benefit
plans, (v) the Company or any ERISA Affiliate withdraws                from any
Multiemployer Plan, or (vi) the Company or any Subsidiary                establishes
or amends any employee welfare benefit plan that provides                post-employment
welfare benefits in a manner that could increase the liability                of the
Company or any Subsidiary thereunder; and any such event or events
               described in clauses (i) through (vi) above, either individually or
together                with any other such event or events, could reasonably be expected
to have a                Material Adverse Effect.  

As used in Section 11(k), the
terms “employee benefit plan” and “employee welfare benefit
plan” shall have the respective meanings assigned to such terms in Section 3
of ERISA. 

     SECTION 12.    
          REMEDIES ON DEFAULT, ETC. 

         Section 12.1.       
          Acceleration. (a) If an Event of Default with respect to the Company
          described in paragraph (h) or (i) of Section 11 (other than an Event of
          Default described in clause (i) of paragraph (h) or described in clause (vi) of
          paragraph (h) by virtue of the fact that such clause encompasses clause (i) of
          paragraph (h)) has occurred, all the Notes of every Series then outstanding
          shall automatically become immediately due and payable. 

         (b)       
          If any other Event of Default has occurred and is continuing, any holder or
          holders of more than 50% in aggregate principal amount of the Notes at the time
          outstanding may at any time at its or their option, by notice or notices to the
          Company, declare all the Notes then outstanding to be immediately due and
          payable. 

         (c)       
          If any Event of Default described in paragraph (a) or (b) of Section 11 has
          occurred and is continuing with respect to any Notes, any holder or holders of
          Notes at the time outstanding affected by such Event of Default may at any time,
          at its or their option, by notice or notices to the Company, declare all the
          Notes held by such holder or holders to be immediately due and payable. 

        Upon
any Note’s becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire unpaid
principal amount of such Note, plus (i) all accrued and unpaid interest thereon
(including, but not limited to, interest accrued thereon at the Default Rate) and
(ii) the LIBOR Breakage Amount and Prepayment Premium, if any, determined in respect
of such principal amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand, protest
or further notice, all of which are hereby waived. The Company acknowledges, and the
parties hereto agree, that each holder of a Note has the right to maintain its investment
in the Notes free from repayment by the Company (except as herein specifically provided
for) and that the provision for payment of the LIBOR Breakage Amount and Prepayment
Premium, if any, by the Company in the event that the Notes are prepaid or are accelerated
as a result of an Event of Default, is intended to provide compensation for the
deprivation of such right under such circumstances. 

-37- 

         Section 12.2.       
          Other Remedies. If any Default or Event of Default has occurred and is
          continuing, and irrespective of whether any Notes have become or have been
          declared immediately due and payable under Section 12.1, the holder of any
          Note at the time outstanding may proceed to protect and enforce the rights of
          such holder by an action at law, suit in equity or other appropriate proceeding,
          whether for the specific performance of any agreement contained herein or in any
          Note, or for an injunction against a violation of any of the terms hereof or
          thereof, or in aid of the exercise of any power granted hereby or thereby or by
          law or otherwise. 

         Section 12.3.       
          Rescission. At any time after the Notes have been declared due and
          payable pursuant to clause (b) or (c) of Section 12.1, the holders of
          not less than 51% in aggregate principal amount of the Notes then outstanding,
          by written notice to the Company, may rescind and annul any such declaration and
          its consequences if (a) the Company has paid all overdue interest on the
          Notes, all principal of and the LIBOR Breakage Amount and Prepayment Premium, if
          any, on any Notes that are due and payable and are unpaid other than by reason
          of such declaration, and all interest on such overdue principal and LIBOR
          Breakage Amount and Prepayment Premium, if any, and (to the extent permitted by
          applicable law) any overdue interest in respect of the Notes, at the Default
          Rate, (b) neither the Company nor any other Person shall have paid any
          amounts which have become due solely by reason of such declaration, (c) all
          Events of Default and Defaults, other than non-payment of amounts that have
          become due solely by reason of such declaration, have been cured or have been
          waived pursuant to Section 17, and (d) no judgment or decree has been
          entered for the payment of any monies due pursuant hereto or to any Notes. No
          rescission and annulment under this Section 12.3 will extend to or affect
          any subsequent Event of Default or Default or impair any right consequent
          thereon. 

         Section 12.4.       
          No Waivers or Election of Remedies, Expenses, Etc. No course of dealing
          and no delay on the part of any holder of any Note in exercising any right,
          power or remedy shall operate as a waiver thereof or otherwise prejudice such
          holder’s rights, powers or remedies. No right, power or remedy conferred by
          this Agreement or by any Note upon any holder thereof shall be exclusive of any
          other right, power or remedy referred to herein or therein or now or hereafter
          available at law, in equity, by statute or otherwise. Without limiting the
          obligations of the Company under Section 15, the Company will pay to the
          holder of each Note on demand such further amount as shall be sufficient to
          cover all costs and expenses of such holder incurred in any enforcement or
          collection under this Section 12, including, without limitation, reasonable
          attorneys’ fees, expenses and disbursements. 

-38- 

     SECTION 13.    
          REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. 

         Section 13.1.       
          Registration of Notes. The Company shall keep at its principal executive
          office a register for the registration and registration of transfers of Notes.
          The name and address of each holder of one or more Notes, each transfer thereof
          and the name and address of each transferee of one or more Notes shall be
          registered in such register. Prior to due presentment for registration of
          transfer, the Person in whose name any Note shall be registered shall be deemed
          and treated as the owner and holder thereof for all purposes hereof, and the
          Company shall not be affected by any notice or knowledge to the contrary. The
          Company shall give to any holder of a Note that is an Institutional Investor
          promptly upon request therefor, a complete and correct copy of the names and
          addresses of all registered holders of Notes. 

         Section 13.2.       
          Transfer and Exchange of Notes. Upon surrender of any Note to the Company
          at the address and to the attention of the designated officer (all as specified
          in Section 18(iv)), for registration of transfer or exchange (and in the
          case of a surrender for registration of transfer accompanied by a written
          instrument of transfer duly executed by the registered holder of such Note or
          such holder’s attorney duly authorized in writing and accompanied by the
          relevant name, address and other information for notices of each transferee of
          such Note or part thereof), within ten Business Days thereafter, the Company
          shall execute and deliver, at the Company’s expense (except as provided
          below), one or more new Notes (as requested by the holder thereof) of the same
          Series (and of the same tranche if such Series has separate tranches) in
          exchange therefor, in an aggregate principal amount equal to the unpaid
          principal amount of the surrendered Note. Each such new Note shall be payable to
          such Person as such holder may request and shall be substantially in the form of
          the Note of such Series originally issued hereunder or pursuant to any
          Supplement. Each such new Note shall be dated and bear interest from the date to
          which interest shall have been paid on the surrendered Note or dated the date of
          the surrendered Note if no interest shall have been paid thereon. The Company
          may require payment of a sum sufficient to cover any stamp tax or governmental
          charge imposed in respect of any such transfer of Notes. Notes shall not be
          transferred in denominations of less than $500,000, provided that if
          necessary to enable the registration of transfer by a holder of its entire
          holding of Notes, one Note may be in a denomination of less than $500,000. Any
          transferee, by its acceptance of a Note registered in its name (or the name of
          its nominee), shall be deemed to have made the representation set forth in
          Sections 6.1 and 6.3, provided, that in lieu of Section 6.3
          such holder may (in reliance upon information provided by the Company, which
          shall not be unreasonably withheld) make a representation to the effect that the
          purchase by any holder of any Note will not constitute a non-exempt prohibited
          transaction under section 406(a) of ERISA. 

        The
Notes have not been registered under the Securities Act or under the securities laws of
any state and may not be transferred or resold unless registered under the Securities Act
and all applicable state securities laws or unless an exemption from the requirement for
such registration is available. 

         Section 13.3.       
          Replacement of Notes. Upon receipt by the Company at the address and to
          the attention of the designated officer (all as specified in
          Section 18(iv)) of evidence reasonably satisfactory to it of the ownership
          of and the loss, theft, destruction or mutilation of any Note (which evidence
          shall be, in the case of an Institutional Investor, notice from such
          Institutional Investor of such ownership and such loss, theft, destruction or
          mutilation), and 

-39- 

		    (a)                             in
the case of loss, theft or destruction, of indemnity reasonably satisfactory
               to it (provided that if the holder of such Note is, or is a nominee
for,                an original Purchaser or another holder of a Note with a minimum net
worth of at                least $50,000,000 or a Qualified Institutional Buyer, such
Person’s own                unsecured agreement of indemnity shall be deemed to be
satisfactory), or  

		    (b)                        in
the case of mutilation, upon surrender and cancellation thereof,  

the Company at its own expense shall
execute and deliver not more than ten (10) Business Days following satisfaction of such
conditions, in lieu thereof, a new Note of the same Series (and of the same tranche if
such Series has separate tranches), dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been
paid thereon. 

     SECTION 14.    
          PAYMENTS ON NOTES. 

         Section 14.1.       
          Place of Payment. Subject to Section 14.2, payments of principal,
          Prepayment Premium, if any, and interest becoming due and payable on the Notes
          shall be made in New York, New York at the principal office of Banc of
          America Securities LLC in such jurisdiction. The Company may at any time, by
          notice to each holder of a Note, change the place of payment of the Notes so
          long as such place of payment shall be either the principal office of the
          Company in such jurisdiction or the principal office of a bank or trust company
          in such jurisdiction. 

         Section 14.2.       
          Home Office Payment. So long as any Purchaser or Additional Purchaser or
          such Purchaser’s nominee or such Additional Purchaser’s nominee shall
          be the holder of any Note, and notwithstanding anything contained in
          Section 14.1 or in such Note to the contrary, the Company will pay all sums
          becoming due on such Note for principal, Prepayment Premium, if any, and
          interest by the method and at the address specified for such purpose for such
          Purchaser on Schedule A hereto or, in the case of any Additional Purchaser,
          Schedule A attached to any Supplement pursuant to which such Additional
          Purchaser is a party, or by such other method or at such other address as such
          Purchaser or Additional Purchaser shall have from time to time specified to the
          Company in writing for such purpose, without the presentation or surrender of
          such Note or the making of any notation thereon, except that upon written
          request of the Company made concurrently with or reasonably promptly after
          payment or prepayment in full of any Note, such Purchaser or Additional
          Purchaser shall surrender such Note for cancellation, reasonably promptly after
          any such request, to the Company at its principal executive office or at the
          place of payment most recently designated by the Company pursuant to
          Section 14.1. Prior to any sale or other disposition of any Note held by
          any Purchaser or Additional Purchaser or such Person’s nominee, such Person
          will, at its election, either endorse thereon the amount of principal paid
          thereon and the last date to which interest has been paid thereon or surrender
          such Note to the Company in exchange for a new Note or Notes pursuant to
          Section 13.2. The Company will afford the benefits of this
          Section 14.2 to any Institutional Investor that is the direct or indirect
          transferee of any Note. 

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     SECTION 15.    
          EXPENSES, ETC. 

         Section 15.1.       
          Transaction Expenses. Whether or not the transactions contemplated hereby
          are consummated, the Company will pay all costs and expenses (but limited to
          reasonable attorneys’ fees of one special counsel for all of the
          Purchasers) incurred by each Purchaser in connection with such transactions. The
          Company further agree to pay all costs and expenses (including reasonable
          attorneys’ fees of a special counsel for the Purchasers or any Additional
          Purchasers and, if reasonably required by the Required Holders, local or other
          counsel) incurred by each Purchaser and each Additional Purchaser and each other
          holder of a Note in connection with such transactions and in connection with any
          amendments, waivers or consents under or in respect of this Agreement (including
          any Supplement), the Subsidiary Guaranty, the Intercreditor Agreement or the
          Notes (whether or not such amendment, waiver or consent becomes effective),
          which shall be limited to one counsel for all holders of the Notes so long as no
          Default or Event of Default shall have occurred and be continuing, including,
          without limitation: (a) the costs and expenses incurred in enforcing or
          defending (or determining whether or how to enforce or defend) any rights under
          this Agreement (including any Supplement), the Subsidiary Guaranty, the
          Intercreditor Agreement or the Notes or in responding to any subpoena or other
          legal process or informal investigative demand issued in connection with this
          Agreement (including any Supplement), the Subsidiary Guaranty, the Intercreditor
          Agreement or the Notes, or by reason of being a holder of any Note, and
          (b) the costs and expenses, including financial advisors’ fees,
          incurred in connection with the insolvency or bankruptcy of the Company or any
          Subsidiary or in connection with any work-out or restructuring of the
          transactions contemplated hereby and by the Notes. The Company will pay, and
          will save each Purchaser, each Additional Purchaser and each other holder of a
          Note harmless from, all claims in respect of any fees, costs or expenses if any,
          of brokers and finders (other than those, if any, retained by a Purchaser or
          other holder in connection with its purchase of the Notes). 

         Section 15.2.       
          Survival. The obligations of the Company under this Section 15 will
          survive the payment or transfer of any Note, the enforcement, amendment or
          waiver of any provision of this Agreement, the Subsidiary Guaranty, the
          Intercreditor Agreement, any Supplement or the Notes, and the termination of
          this Agreement, the Subsidiary Guaranty, the Intercreditor Agreement or any
          Supplement. 

     SECTION 16.    
          SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. 

        All
representations and warranties contained herein, in any Supplement, in the Subsidiary
Guaranty or in the Intercreditor Agreement shall survive the execution and delivery of
this Agreement, such Supplement and the Notes, the purchase or transfer by any Purchaser
or any Additional Purchaser of any such Note or portion thereof or interest therein and
the payment of any Note and may be relied upon by any subsequent holder of any such Note,
regardless of any investigation made at any time by or on behalf of any Purchaser or any
Additional Purchaser or any other holder of any such Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company pursuant to this
Agreement or any Supplement shall be deemed representations and warranties of the Company
under this Agreement; provided, that the representations and warranties contained
in any Supplement shall only be made for the benefit of the Additional Purchasers which
are party to such Supplement and the holders of the Notes issued pursuant to such
Supplement, including subsequent holders of any Note issued pursuant to such Supplement,
and shall not require the consent of the holders of existing Notes. Subject to the
preceding sentence, this Agreement (including every Supplement) and the Notes embody the
entire agreement and understanding between the Purchasers and the Additional Purchasers
and the Company and supersede all prior agreements and understandings relating to the
subject matter hereof. 

-41- 

     SECTION 17.    
          AMENDMENT AND WAIVER. 

         Section 17.1.       
          Requirements. (a) Subject to Section 17.1(c), this Agreement
          (including any Supplement) and the Notes may be amended, and the observance of
          any term hereof or of the Notes may be waived (either retroactively or
          prospectively), with (and only with) the written consent of the Company and the
          Required Holders, except that (i) no amendment or waiver of any of the
          provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof or the corresponding
          provision of any Supplement, or any defined term (as it is used in any such
          Section or such corresponding provision of any Supplement), will be effective as
          to any holder of Notes unless consented to by such holder of Notes in writing,
          and (ii) no such amendment or waiver may, without the written consent of
          all of the holders of Notes at the time outstanding affected thereby,
          (A) subject to the provisions of Section 12 relating to acceleration
          or rescission, change the amount or time of any prepayment or payment of
          principal of, or reduce the rate or change the time of payment or method of
          computation of the Prepayment Premium, if any, or of interest on, the Notes,
          (B) change the percentage of the principal amount of the Notes the holders
          of which are required to consent to any such amendment or waiver, or
          (C) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20. 

         (b)       
          Supplements. Notwithstanding anything to the contrary contained herein,
          the Company may enter into any Supplement providing for the issuance of one or
          more Series of Additional Notes consistent with Sections 2.2 hereof without
          obtaining the consent of any holder of any other Series of Notes. 

         (c)       
          Reduction to Interest Rates. Notwithstanding anything to the contrary
          contained in Section 17.1(a) or 2.2, the interest rate (including the time
          of payment) and Prepayment Premium (or method of computation thereof) associated
          with any Series of Notes or any separate tranche of any Series of Notes (if any
          Series of Notes has more than one separate tranche) may be reduced with the
          prior written consent of all holders of the Notes of such Series (if such Series
          of Notes does not have more than one tranche) or all holders of such separate
          tranche of a Series of Notes, and without any requirements to obtain the prior
          written consent of the holders of any other Series of Notes or any other tranche
          of any Series of Notes (if any Series of Notes has more than one separate
          tranche). 

-42- 

         Section 17.2.       
          Solicitation of Holders of Notes. 

         (a)       
          Solicitation. The Company will provide each holder of the Notes
          (irrespective of the amount of Notes then owned by it) with sufficient
          information, sufficiently far in advance of the date a decision is required, to
          enable such holder to make an informed and considered decision with respect to
          any proposed amendment, waiver or consent in respect of any of the provisions
          hereof, any Supplement, of the Notes, the Subsidiary Guaranty or the
          Intercreditor Agreement. The Company will deliver executed or true and correct
          copies of each amendment, waiver or consent effected pursuant to the provisions
          of this Section 17 to each holder of outstanding Notes promptly following
          the date on which it is executed and delivered by, or receives the consent or
          approval of, the requisite holders of Notes. 

         (b)       
          Payment. The Company will not directly or indirectly pay or cause to be
          paid any remuneration, whether by way of supplemental or additional interest,
          fee or otherwise, or grant any security or provide other credit support, to any
          holder of Notes as consideration for or as an inducement to the entering into by
          any holder of Notes of any waiver or amendment of any of the terms and
          provisions hereof, any Supplement, the Notes, the Subsidiary Guaranty or the
          Intercreditor Agreement unless such remuneration is concurrently paid, or
          security is concurrently granted or other credit support is concurrently
          provided, on the same terms, ratably to each holder of Notes then outstanding
          even if such holder did not consent to such waiver or amendment. 

         (c)       
          Consent in Contemplation of Transfer. Any consent made pursuant to this
          Section 17 by a holder of Notes that has transferred or has agreed to
          transfer its Notes to the Company, any Subsidiary or any Affiliate of the
          Company and has provided or has agreed to provide such written consent as a
          condition to such transfer shall be void and of no force or effect except solely
          as to such holder, and any amendments effected or waivers granted or to be
          effected or granted that would not have been or would not be so effected or
          granted but for such consent (and the consents of all other holders of Notes
          that were acquired under the same or similar conditions) shall be void and of no
          force or effect except solely as to such holder. 

         Section 17.3.       
          Binding Effect, Etc. Any amendment or waiver consented to as provided in
          this Section 17, other than amendments or waivers effected in accordance
          with Section 17.1(c), applies equally to all holders of Notes and is binding
          upon them and upon each future holder of any Note and upon the Company without
          regard to whether such Note has been marked to indicate such amendment or
          waiver. No such amendment or waiver will extend to or affect any obligation,
          covenant, agreement, Default or Event of Default not expressly amended or waived
          or impair any right consequent thereon. No course of dealing between the Company
          and the holder of any Note nor any delay in exercising any rights hereunder or
          under any Note shall operate as a waiver of any rights of any holder of such
          Note. As used herein, the term “this Agreement” and references thereto
          shall mean this Agreement as it may from time to time be amended or
          supplemented. 

         Section 17.4.       
          Notes Held by Company, Etc. Solely for the purpose of determining whether
          the holders of the requisite percentage of the aggregate principal amount of
          Notes then outstanding approved or consented to any amendment, waiver or consent
          to be given under this Agreement or the Notes, or have directed the taking of
          any action provided herein or in the Notes to be taken upon the direction of the
          holders of a specified percentage of the aggregate principal amount of Notes
          then outstanding, Notes directly or indirectly owned by the Company or any of
          its Affiliates shall be deemed not to be outstanding. 

-43- 

     SECTION 18.    
          NOTICES. 

        Except
as otherwise specifically provided herein, all notices and communications provided for
hereunder shall be in writing and sent (a) by telecopy or electronic mail if the
sender on the same day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), or (b) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent: 

		    (i)                             if
to a Purchaser or such Purchaser’s nominee, to such Purchaser or such
               Purchaser’s nominee at the address specified for such communications
in                Schedule A to this Agreement, or at such other address as such
Purchaser or                such Purchaser’s nominee shall have specified to the
Company in writing                pursuant to this Section 18;  

		    (ii)                             if
to an Additional Purchaser or such Additional Purchaser’s nominee, to
               such Additional Purchaser or such Additional Purchaser’s nominee at
the                address specified for such communications in Schedule A to any
Supplement,                or at such other address as such Additional Purchaser or such
Additional                Purchaser’s nominee shall have specified to the Company in
writing,  

		    (iii)                             if
to any other holder of any Note, to such holder at such address as such other
               holder shall have specified to the Company in writing pursuant to this
               Section 18, or  

		    (iv)                             if
to the Company, to the Company at its address set forth at the beginning
               hereof to the attention of Chief Financial Officer, with a copy to the
General                Counsel, or at such other address as the Company shall have
specified to the                holder of each Note in writing.  

Notices under this Section 18
will be deemed given only when actually received. 

     SECTION 19.    
          REPRODUCTION OF DOCUMENTS. 

        This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications that may hereafter be executed,
(b) documents received by any Purchaser at the Closing or by any Additional Purchaser
(except the Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser or any Additional
Purchaser, may be reproduced by such Purchaser or such Additional Purchaser by any
photographic, photostatic, electronic, digital, or other similar process and such
Purchaser or such Additional Purchaser may destroy any original document so reproduced.
The Company agrees and stipulates that, to the extent permitted by applicable law, any
such reproduction shall be admissible in evidence as the original itself in any judicial
or administrative proceeding (whether or not the original is in existence and whether or
not such reproduction was made by such Purchaser or such Additional Purchaser in the
regular course of business) and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence. This Section 19 shall not
prohibit the Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence to
demonstrate the inaccuracy of any such reproduction. 

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     SECTION 20.    
          CONFIDENTIAL INFORMATION. 

        For
the purposes of this Section 20, “Confidential Information” means
information delivered to any Purchaser or any Additional Purchaser by or on behalf of the
Company or any Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement, provided that such term does not include information
that (a) was publicly known or otherwise known to such Purchaser or such Additional
Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly
known through no act or omission by such Purchaser or such Additional Purchaser or any
Person acting on such Purchaser’s or such Additional Purchaser’s behalf,
(c) otherwise becomes known to such Purchaser or such Additional Purchaser other than
through disclosure by the Company or any Subsidiary or (d) constitutes financial
statements delivered to such Purchaser or such Additional Purchaser under Section 7.1
that are otherwise publicly available. Each Purchaser and each Additional Purchaser will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by such Purchaser or such Additional Purchaser in good faith to protect
confidential information of third parties delivered to such Purchaser or such Additional
Purchaser, provided that such Purchaser or such Additional Purchaser may deliver or
disclose Confidential Information to (i) such Purchaser’s or such Additional
Purchaser’s directors, trustees, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the administration of the
investment represented by such Purchaser’s or such Additional Purchaser’s
Notes), (ii) such Purchaser’s or such Additional Purchaser’s financial
advisors and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note, (iv) any Institutional Investor to which
such Purchaser or such Additional Purchaser sells or offers to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this
Section 20), (v) any Person from which such Purchaser or such Additional
Purchaser offers to purchase any security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (vi) any federal or state regulatory authority
having jurisdiction over such Purchaser or such Additional Purchaser, (vii) the
National Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about such
Purchaser’s or such Additional Purchaser’s investment portfolio, or
(viii) any other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser or such Additional Purchaser, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which such
Purchaser or such Additional Purchaser is a party or (z) if an Event of Default has
occurred and is continuing, to the extent such Purchaser or such Additional Purchaser may
reasonably determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under such Purchaser’s
or such Additional Purchaser’s Notes, the Subsidiary Guaranty, the Intercreditor
Agreement and this Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request by the
Company in connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder (other than a
holder that is a party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 20. 

-45- 

     SECTION 21.    
          SUBSTITUTION OF PURCHASER. 

        Each
Purchaser and each Additional Purchaser shall have the right to substitute any one of its
Affiliates as the purchaser of the Notes that it has agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both such Purchaser or such
Additional Purchaser and such Affiliate, shall contain such Affiliate’s agreement to
be bound by this Agreement and shall contain a confirmation by such Affiliate of the
accuracy with respect to it of the representations set forth in Section 6. Upon receipt of
such notice, any reference to such Purchaser or such Additional Purchaser in this
Agreement (other than in this Section 21), shall be deemed to refer to such Affiliate in
lieu of such original Purchaser or such original Additional Purchaser. In the event that
such Affiliate is so substituted as a Purchaser or an Additional Purchaser hereunder and
such Affiliate thereafter transfers to such original Purchaser or such original Additional
Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, any reference to such Affiliate as a “Purchaser” or an
“Additional Purchaser” in this Agreement (other than in this Section 21), shall
no longer be deemed to refer to such Affiliate, but shall refer to such original Purchaser
or such original Additional Purchaser, and such original Purchaser or such original
Additional Purchaser shall again have all the rights of an original holder of the Notes
under this Agreement. 

     SECTION 22.    
          MISCELLANEOUS. 

         Section 22.1.       
          Successors and Assigns. All covenants and other agreements contained in
          this Agreement (including all covenants and other agreements contained in any
          Supplement) by or on behalf of any of the parties hereto bind and inure to the
          benefit of their respective successors and assigns (including, without
          limitation, any subsequent holder of a Note) whether so expressed or not. 

         Section 22.2.       
          Payments Due on Non-Business Days. Anything in this Agreement or the
          Notes to the contrary notwithstanding (but without limiting the requirement in
          Section 8.4 that the notice of any optional prepayment specify a Business
          Day as the date fixed for such prepayment), any payment of principal of or
          Prepayment Premium or interest on any Note that is due on a date other than a
          Business Day shall be made on the next succeeding Business Day without including
          the additional days elapsed in the computation of the interest payable on such
          next succeeding Business Day; provided that if the maturity date of any Note is
          a date other than a Business Day, the payment otherwise due on such maturity
          date shall be made on the next succeeding Business Day and shall include the
          additional days elapsed in the computation of interest payable on such next
          succeeding Business Day. 

-46- 

         Section 22.3.       
          Accounting Terms. All accounting terms used herein which are not
          expressly defined in this Agreement have the meanings respectively given to them
          in accordance with GAAP. Except as otherwise specifically provided herein,
          (i) all computations made pursuant to this Agreement shall be made in
          accordance with GAAP, and (ii) all financial statements shall be prepared
          in accordance with GAAP. 

         Section 22.4.       
          Severability. Any provision of this Agreement that is prohibited or
          unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
          to the extent of such prohibition or unenforceability without invalidating the
          remaining provisions hereof, and any such prohibition or unenforceability in any
          jurisdiction shall (to the full extent permitted by law) not invalidate or
          render unenforceable such provision in any other jurisdiction. 

         Section 22.5.       
          Construction. Each covenant contained herein shall be construed (absent
          express provision to the contrary) as being independent of each other covenant
          contained herein, so that compliance with any one covenant shall not (absent
          such an express contrary provision) be deemed to excuse compliance with any
          other covenant. 

        For
the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be
deemed to be a part hereof. 

         Section 22.6.       
          Counterparts. This Agreement may be executed in any number of
          counterparts, each of which shall be an original but all of which together shall
          constitute one instrument. Each counterpart may consist of a number of copies
          hereof, each signed by less than all, but together signed by all, of the parties
          hereto. 

         Section 22.7.       
          Governing Law. This Agreement shall be construed and enforced in
          accordance with, and the rights of the parties shall be governed by, the law of
          the State of New York excluding choice-of-law principles of the law of such
          State that would permit the application of the laws of a jurisdiction other than
          such State. 

         Section 22.8.       
          Jurisdiction and Process; Waiver of Jury Trial. (a) The Company
          irrevocably submits to the non-exclusive jurisdiction of any New York State
          or federal court sitting in the Borough of Manhattan, The City of New York,
          over any suit, action or proceeding arising out of or relating to this Agreement
          or the Notes. To the fullest extent permitted by applicable law, the Company
          irrevocably waives and agrees not to assert, by way of motion, as a defense or
          otherwise, any claim that it is not subject to the jurisdiction of any such
          court, any objection that it may now or hereafter have to the laying of the
          venue of any such suit, action or proceeding brought in any such court and any
          claim that any such suit, action or proceeding brought in any such court has
          been brought in an inconvenient forum. 

         (b)       
          The Company consents to process being served by or on behalf of any holder of
          Notes in any suit, action or proceeding of the nature referred to in
          Section 22.8(a) by mailing a copy thereof by registered or certified mail
          (or any substantially similar form of mail), postage prepaid, return receipt
          requested, to it at its address specified in Section 18 or at such other
          address of which such holder shall then have been notified pursuant to said
          Section. The Company agrees that such service upon receipt (i) shall be
          deemed in every respect effective service of process upon it in any such suit,
          action or proceeding and (ii) shall, to the fullest extent permitted by
          applicable law, be taken and held to be valid personal service upon and personal
          delivery to it. Notices hereunder shall be conclusively presumed received as
          evidenced by a delivery receipt furnished by the United States Postal Service or
          any reputable commercial delivery service. 

-47- 

         (c)       
          Nothing in this Section 22.8 shall affect the right of any holder of a Note
          to serve process in any manner permitted by law, or limit any right that the
          holders of any of the Notes may have to bring proceedings against the Company in
          the courts of any appropriate jurisdiction or to enforce in any lawful manner a
          judgment obtained in one jurisdiction in any other jurisdiction. 

         (d)       
          THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH
          RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN
          CONNECTION HEREWITH OR THEREWITH. 

         Section 22.9.       
          Subordination of Indenture. The obligations of the Company under this
          Agreement, any Supplement and the Notes shall constitute, and be entitled to all
          the benefits of “Designated Senior Debt” as defined by, and for
          purposes of, the Indenture dated as of April 5, 2004, between the Company and
          U.S. Bank National Association, as trustee, pursuant to which the Company’s
          2.75% Convertible Senior Subordinated Notes due 2024 were issued. 

     _________________ 

-48- 

        The
execution hereof by the Purchasers shall constitute a contract among the Company and the
Purchasers for the uses and purposes hereinabove set forth. This Agreement may be executed
in any number of counterparts, each executed counterpart constituting an original but all
together only one agreement. 

		
	 	Very truly yours,
	 	
REGAL-BELOIT CORPORATION
	 	

By: /s/ David A. Barta          
	 	      Name: David A. Barta
	 	      Title: Vice President and Chief Financial Officer

-49- 

Accepted as of the date first written
above. 

		
	 	ALLSTATE INSURANCE COMPANY
	 	

By: /s/ Robert B. Bodett           
	 	      Name: Robert B. Bodett
	 	

By: /s/ Jerry D. Zinkula           
	 	      Name: Jerry D. Zinkula
	 	      Authorized Signatories

-50- 

Accepted as of the date first written
above. 

		
	 	ALLSTATE LIFE INSURANCE COMPANY
	 	

By: /s/ Robert B. Bodett           
	 	      Name: Robert B. Bodett
	 	

By: /s/ Jerry D. Zinkula           
	 	      Name: Jerry D. Zinkula
	 	      Authorized Signatories

-51- 

Accepted as of the date first written
above. 

		
	 	C.M. LIFE INSURANCE COMPANY
	 	

By: Babson Capital Management LLC as 
	 	       Investment Sub-Adviser
	 	

     By: /s/ Elisabeth A. Perenick           
	 	           
Name: Elisabeth A. Perenick
	 	           
Title:  Managing Director

-52- 

Accepted as of the date first written
above. 

		
	 	CUNA MUTUAL LIFE INSURANCE COMPANY

CUNA MUTUAL INSURANCE SOCIETY
CUMIS INSURANCE SOCIETY, INC.
	 	

By: MEMBERS Capital Advisors, Inc., 
	 	       acting as Investment Advisor
	 	

      By: /s/ David Patch           
	 	      Name: David Patch
	 	      Title:  Director, Private Placements

-53- 

Accepted as of the date first written
above. 

		
	 	GENWORTH LIFE AND ANNUITY INSURANCE COMPANY
	 	

By: /s/ Morian C. Mooers           
	 	      Name: Morian C. Mooers
	 	      Title:  Investment Officer

-54- 

Accepted as of the date first written
above. 

		
	 	GENWORTH LIFE INSURANCE COMPANY
	 	

By: /s/ Morian C. Mooers           
	 	      Name: Morian C. Mooers
	 	      Title:  Investment Officer

-55- 

Accepted as of the date first written
above. 

		
	 	HAKONE FUND II LLC
	 	

By: Babson Capital Management LLC as 
	 	       Investment Manager
	 	

     By: /s/ Elisabeth A. Perenick           
	 	           
Name: Elisabeth A. Perenick
	 	           
Title:  Managing Director

-56- 

Accepted as of the date first written
above. 

		
	 	HARTFORD LIFE INSURANCE COMPANY
	 	

By: Hartford Investment Management Company 
	 	Its: Agent and Attorney-in-Fact 
	 	

     By: /s/ Daniel C. Leimbach           
	 	           
Name: Daniel C. Leimbach
	 	           
Title:  Senior Vice President

-57- 

Accepted as of the date first written
above. 

		
	 	MASSMUTUAL ASIA LIMITED
	 	

By: Babson Capital Management LLC as 
	 	       Investment Adviser
	 	

     By: /s/ Elisabeth A. Perenick           
	 	           
Name: Elisabeth A. Perenick
	 	           
Title:  Managing Director

-58- 

Accepted as of the date first written
above. 

		
	 	MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
	 	

By: Babson Capital Management LLC as 
	 	       Investment Adviser
	 	

     By: /s/ Elisabeth A. Perenick           
	 	           
Name: Elisabeth A. Perenick
	 	           
Title:  Managing Director

-59- 

Accepted as of the date first written
above. 

		
	 	METROPOLITAN LIFE INSURANCE COMPANY
	 	
METLIFE INSURANCE COMPANY OF CONNECTICUT
	 	

By: Metropolitan Life Insurance Company, its 
	 	       Investment Manager
	 	

     By: /s/ Scott Inglis           
	 	           
Name: Scott Inglis
	 	           
Title: Managing Director

            
(executed by Metropolitan Life Insurance Company (i) as

            to itself as a Purchaser and (ii) as investment manager to 

            MetLife Insurance Company of Connecticut as a Purchaser) 

-60- 

Accepted as of the date first written
above. 

		
	 	MML BAY STATE LIFE INSURANCE COMPANY
	 	

By: Babson Capital Management LLC as 
	 	       Investment Sub-Adviser
	 	

     By: /s/ Elisabeth A. Perenick           
	 	           
Name: Elisabeth A. Perenick
	 	           
Title:  Managing Director

-61- 

Accepted as of the date first written
above. 

		
	 	NEW YORK LIFE INSURANCE COMPANY
	 	

By: /s/ Trinh Nguyen           
	 	      Name: Trinh Nguyen
	 	      Title:  Corporate Vice President

-62- 

Accepted as of the date first written
above. 

		
	 	PRINCIPAL LIFE INSURANCE COMPANY
	 	

By: Principal Global Investors, LLC, a 
	 	       Delaware limited liability company, its
	 	       authorized signatory
	 	

     By: /s/ Colin Pennycooke           
	 	           
Name: Colin Pennycooke
	 	           
Title:  Counsel
	 	

     By: /s/ James C. Fifield           
	 	           
Name: James C. Fifield
	 	           
Title:  Assistant General Counsel

-63-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]