Document:

Exhibit
10.1

 

VOTING AGREEMENT

 

This VOTING AGREEMENT (this “Agreement”),
dated as of January 24, 2005 among Mercantile Bankshares Corporation, a
Maryland corporation (“Parent”),
and each of Cyrus Katzen and David A. Dickens (each of the foregoing persons, a
“Shareholder”).

 

WHEREAS, in order to induce Parent to enter into an Agreement and Plan
of Merger, dated as of the date hereof (the “Merger
Agreement”) among Parent, Community Bank of Northern Virginia, a
Virginia bank (the “Bank”), and
Mercantile-Safe Deposit and Trust Company, a Maryland bank and a wholly-owned
subsidiary of Parent (“Merger Bank”),
Parent has requested each Shareholder, and each Shareholder has agreed, to
enter into this Agreement with respect to all shares of common stock, par value
$0.333 per share, of the Bank that such Shareholder beneficially owns (with
respect to each Shareholder, the “Shares”).

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE 1

GRANT OF PROXY; VOTING AGREEMENT

 

Section 1.01.  Voting Agreement.  Each Shareholder hereby agrees to vote or
exercise its right to consent with respect to all Shares that such Shareholder
is entitled to vote at the time of any vote or action by written consent to
approve and adopt the Merger Agreement, the Merger, the Plan of Merger and all
agreements related to the Merger and any actions related thereto at any meeting
of the shareholders of the Bank, and at any adjournment thereof, at which such
Merger Agreement, Plan of Merger and other related agreements (or any amended version
thereof), or such other actions, are submitted for the consideration and vote
of the shareholders of the Bank.  Each
Shareholder hereby agrees that, for so long as this Agreement is in effect, it
will not vote any Shares in favor of, or consent to, and will vote such Shares
against and not consent to, the approval of any (i) Acquisition Proposal, (ii)
reorganization, recapitalization, liquidation or winding-up of the Bank or any
other extraordinary transaction involving the Bank, (iii) corporate action the
consummation of which would frustrate the purposes, or prevent or delay the
consummation of, the transactions contemplated by the Merger Agreement or (iv)
other matter relating to, or in connection with, any of the foregoing matters.

 

Section 1.02.  Irrevocable Proxy.  Each Shareholder hereby revokes any and all
previous proxies granted with respect to such Shareholder’s Shares.  By entering into this Agreement, each
Shareholder hereby grants a proxy appointing

 

 

Parent as such
Shareholder’s attorney-in-fact and proxy, with full power of substitution, for
and in such Shareholder’s name, to vote, express consent or dissent, or
otherwise to utilize such voting power in the manner contemplated by Section 1.01
above as Parent or its proxy or substitute shall, in Parent’s sole discretion,
deem proper with respect to such Shareholder’s Shares.  The proxy granted by each Shareholder
pursuant to this Article 1 is irrevocable and is granted in consideration
of Parent entering into this Agreement and the Merger Agreement and incurring
certain related fees and expenses.  The
proxy granted by each Shareholder shall be revoked upon termination of this
Agreement in accordance with its terms.

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS

 

Each Shareholder severally represents and warrants to Parent that:

 

Section 2.01.  Authorization.  Such Shareholder has duly executed and
delivered this Agreement and the execution, delivery and performance by such
Shareholder of this Agreement and the consummation by such Shareholder of the
transactions contemplated hereby are within the powers and legal capacity of
such Shareholder and have been duly authorized by all necessary action.  This Agreement is a valid and binding agreement
of such Shareholder.  If such Shareholder
is married and the Shares set forth on the signature page hereto opposite such
Shareholder’s name constitute community property under applicable laws, this
Agreement has been duly authorized, executed and delivered by, and constitutes
the valid and binding agreement of, such Shareholder’s spouse.

 

Section 2.02.  Non-Contravention.  The execution, delivery and performance by
such Shareholder of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) violate any applicable law, rule,
regulation, judgment, injunction, order or decree, (ii) require any consent or
other action by any Person under, constitute a default under, or give rise to
any right of termination, cancellation or acceleration or to a loss of any
benefit to which such Shareholder is entitled under any provision of any
agreement or other instrument binding on such Shareholder or (iii) result in
the imposition of any Lien on any asset of such Shareholder.

 

Section 2.03.  Ownership of Shares.  Such Shareholder is the record and beneficial
owner of such Shareholder’s Shares, free and clear of any Lien and any other
limitation or restriction (including any restriction on the right to vote or
otherwise dispose of such Shares).  None
of such Shareholder’s Shares is subject to any voting trust or other agreement
or arrangement with respect to the voting of such Shares.

 

2

 

Section 2.04.  Total Shares. 
Except for the Shares and the options to acquire Shares set
forth on the signature page hereto, such Shareholder does not beneficially own
any (i) shares of capital stock or voting securities of the Bank, (ii)
securities of the Bank convertible into or exchangeable for shares of capital
stock or voting securities of the Bank or (iii) options or other rights to
acquire from the Bank any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Bank.

 

Section 2.05.  Finder’s Fees.  Except as provided in Section 5.15 of
the Merger Agreement, no investment banker, broker, finder or other
intermediary is entitled to a fee or commission from Parent or the Bank in
respect of this Agreement based upon any arrangement or agreement made by or on
behalf of such Shareholder.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF PARENT

 

Parent represents and warrants to each Shareholder:

 

Section 3.01.  Authorization.  The execution, delivery and performance by
Parent of this Agreement and the consummation by Parent of the transactions
contemplated hereby are within the corporate powers of Parent and have been
duly authorized by all necessary corporate action.  This Agreement constitutes a valid and
binding agreement of Parent.

 

ARTICLE 4

COVENANTS OF THE SHAREHOLDERS

 

Each Shareholder hereby severally covenants and agrees that so long as
this Agreement is in effect:

 

Section 4.01.  No Proxies for or Encumbrances on Shares.  Except pursuant to the terms of this
Agreement, such Shareholder shall not, without the prior written consent of
Parent, directly or indirectly, (i) grant any proxies or enter into any voting
trust or other agreement or arrangement with respect to the voting of any of
such Shareholder’s Shares or (ii) acquire, sell, assign, transfer, encumber or
otherwise dispose of, or enter into any contract, option or other arrangement
or understanding with respect to the direct or indirect acquisition or sale,
assignment, transfer, encumbrance or other disposition of, any Shares during
the term of this Agreement.  Such
Shareholder shall not seek or solicit any such acquisition or sale, assignment,
transfer, encumbrance or other disposition or any such contract, option or
other arrangement or understanding and agrees to notify Parent promptly, and to
provide all details requested by Parent, if such

 

3

 

Shareholder
shall be approached or solicited, directly or indirectly, by any Person with
respect to any of the foregoing.  In the
event that pursuant to Section 7.03(b)(i) of the Merger Agreement the
Board of Directors of the Bank engages in negotiations or discussions with a
Third Party that has made a bona fide unsolicited Acquisition Proposal that the
Board of Directors of the Bank reasonably believes will lead to a Superior
Proposal, subject to compliance by the Bank with the terms of the Merger
Agreement, including without limitation Section 7.03 thereof, and subject
to compliance by such Shareholder with the terms of this Agreement, nothing in
the immediately preceding sentence shall prohibit such Shareholder from
engaging in negotiations or discussions with such Third Party regarding such
Shareholder entering into (concurrently with or subsequent to the termination
of the Merger Agreement pursuant to Section 11.01(d)(i) thereof) (i) a
voting agreement, (ii) an agreement with respect to granting a proxy or (iii)
an agreement with respect to the sale of such Shareholder’s Shares, in each
case with respect to such Acquisition Proposal.

 

Section 4.02.  Other Offers.  Subject to Section 5.11, such
Shareholder shall not directly or indirectly take any action that is prohibited
under Section 7.03 of the Merger Agreement with respect to actions to be
taken by the Bank.  Such Shareholder will
promptly advise and update Parent after receipt by such Shareholder of an
Acquisition Proposal in accordance with the notice provisions applicable to the
Bank as set forth in Section 7.03 of the Merger Agreement.

 

ARTICLE 5

MISCELLANEOUS

 

Section 5.01.  Further Assurances.  Parent and each Shareholder will each execute
and deliver, or cause to be executed and delivered, all further documents and
instruments and use its best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations, to consummate and make effective the
transactions contemplated by this Agreement.

 

Section 5.02.  Amendments; Termination.  Any provision of this Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and
is signed, in the case of an amendment, by each party to this Agreement or in
the case of a waiver, by the party against whom the waiver is to be
effective.  This Agreement shall
terminate upon the termination of the Merger Agreement, and all rights or
obligations of the parties under this Agreement shall immediately terminate,
except as provided in Section 5.11 hereof.

 

Section 5.03.  Expenses.  All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.

 

4

 

Section 5.04.  Successors and Assigns; Obligations of
Shareholders.  The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of the other parties hereto, except that Parent may transfer or assign
its rights and obligations to any Affiliate of Parent.

 

Section 5.05.  Governing Law.  This Agreement shall be construed in
accordance with and governed by the laws of the State of Maryland.

 

Section 5.06.  Counterparts; Effectiveness.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective as between Parent, on the one hand, and a Shareholder,
on the other hand, when each such party shall have received counterparts hereof
signed by each such other party.

 

Section 5.07.  Severability.  If any term, provision or covenant of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions and
covenants of this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.

 

Section 5.08.  Specific Performance.  The parties hereto agree that Parent and
Merger Bank would suffer irreparable damage in the event any provision of this
Agreement is not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof in
addition to any other remedy to which they are entitled at law or in equity.

 

Section 5.09.  Capitalized Terms.  Capitalized terms used but not defined herein
shall have the respective meanings set forth in the Merger Agreement.

 

Section 5.10.  Notices. 
All notices, requests, claims, demands and other communications under
this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice): (i) if to Parent, to the appropriate
address for notice thereto set forth in the Merger Agreement and (ii) if to a
Shareholder, to the appropriate address set forth underneath such Shareholder’s
name on the signature pages hereto.

 

Section 5.11.  Shareholder Capacity.  No person executing this Agreement who is or
becomes during the term hereof a director or officer of the Bank makes any
agreement or understanding herein in his capacity as such director or
officer.  Each Shareholder signs solely
in his capacity as the record holder and beneficial

 

5

 

owner of such
Shareholder’s Shares and nothing in this Agreement shall limit or affect any
actions taken by any Shareholder in his capacity as an officer or director of
the Bank.  This Section 5.11 shall
survive termination of this Agreement.

 

6

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

 

	
   

  	
  MERCANTILE
  BANKSHARES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ EDWARD J. KELLY, III

  
	
   

  	
  Name:

  	
  Edward J. Kelly, III

  
	
   

  	
  Title:

  	
  Chairman,
  President and

  Chief Executive Officer

  
				

 

 

	
   

  	
    /s/ CYRUS KATZEN

  
	
   

  	
  Cyrus Katzen

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Number of Shares:

  	
  1,738,032.046

  
	
   

  	
  Number of Options:

  	
  0

  
	
   

  	
  Address:

  c/o Mozel Development

  Corporation

  6031 Leesburg Pike

  Bailey’s Crossroads, VA

  22041

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Acknowledged and Agreed:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
    /s/ MYRTLE S. KATZEN

  
	
   

  	
  Myrtle S. Katzen

  	
   

  

 

8

 

	
   

  	
    /s/
  DAVID A. DICKENS

  
	
   

  	
  David A.
  Dickens

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Number of Shares:

  	
  1,173,323

  
	
   

  	
  Number of Options:

  	
  0

  
	
   

  	
  Address:

  c/o Masterprint, Inc.

  8401-A Terminal Road

  Newington, VA

  22122

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Acknowledged and Agreed:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
    /s/
  SUSAN W. DICKENS

  
	
   

  	
  Susan W. DickensExhibit 10.1

 

 

 

 

$100,000,000

 

SECOND
AMENDED AND RESTATED

CREDIT AGREEMENT

 

dated
as of

 

January 20,
2005

 

among

 

BENCHMARK
ELECTRONICS, INC.,

 

The
Borrowing Subsidiaries

 

The
Lenders Party Hereto,

 

JPMORGAN
CHASE BANK, N.A.

as Administrative Agent,

Collateral Agent and Issuing Lender

and

FLEET
NATIONAL BANK,

WELLS FARGO BANK, N.A.

and

COMERICA BANK

as Co-Documentation Agent

 

 

J.P.
MORGAN SECURITIES INC.,

as Lead Arranger

 

 

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE I Definitions

  	
   

  
	
  Section 1.01

  	
  Defined Terms

  	
   

  
	
  Section 1.02

  	
  Terms Generally

  	
   

  
	
  Section 1.03

  	
  Accounting Terms;
  GAAP

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II The Credits

  	
   

  
	
  Section 2.01

  	
  Commitments

  	
   

  
	
  Section 2.02

  	
  Loans and Borrowings

  	
   

  
	
  Section 2.03

  	
  Requests for
  Borrowings

  	
   

  
	
  Section 2.04

  	
  Letters of Credit

  	
   

  
	
  Section 2.05

  	
  Funding of
  Borrowings

  	
   

  
	
  Section 2.06

  	
  Interest Elections

  	
   

  
	
  Section
  2.07

  	
  Termination
  and Reduction of Commitments

  	
   

  
	
  Section
  2.08

  	
  Repayment
  of Loans; Evidence of Debt

  	
   

  
	
  Section 2.09

  	
  Prepayment of Loans

  	
   

  
	
  Section 2.10

  	
  Fees

  	
   

  
	
  Section 2.11

  	
  Interest

  	
   

  
	
  Section 2.12

  	
  Alternate Rate
  of Interest

  	
   

  
	
  Section 2.13

  	
  Increased Costs

  	
   

  
	
  Section 2.14

  	
  Break Funding
  Payments

  	
   

  
	
  Section
  2.15

  	
  Taxes

  	
   

  
	
  Section
  2.16

  	
  Payments
  Generally; Pro Rata Treatment; Sharing of Set-offs

  	
   

  
	
  Section
  2.17

  	
  Mitigation
  Obligations; Replacement of Lenders

  	
   

  
	
  Section 2.18

  	
  Increase of
  Commitments

  	
   

  
	
  Section 2.19

  	
  Borrowing
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  Representations and Warranties

  	
   

  
	
  Section 3.01

  	
  Organization

  	
   

  
	
  Section 3.02

  	
  Authorization; Enforceability

  	
   

  
	
  Section 3.03

  	
  Governmental Approvals; No Conflicts

  	
   

  
	
  Section 3.04

  	
  Financial Statements; No Material Adverse
  Change

  	
   

  
	
  Section 3.05

  	
  Properties

  	
   

  
	
  Section 3.06

  	
  Litigation and Environmental Matters

  	
   

  
	
  Section 3.07

  	
  Compliance with Laws and Agreements

  	
   

  
	
  Section 3.08

  	
  Intellectual Property

  	
   

  
	
  Section 3.09

  	
  Investment and Holding Company Status

  	
   

  
	
  Section 3.10

  	
  Taxes

  	
   

  
	
  Section 3.11

  	
  ERISA

  	
   

  
	
  Section 3.12

  	
  Labor Matters

  	
   

  
	
  Section 3.13

  	
  Insurance

  	
   

  
	
  Section 3.14

  	
  Solvency

  	
   

  
	
  Section 3.15

  	
  Subsidiaries

  	
   

  
	
  Section 3.16

  	
  Disclosure

  	
   

  

 

i

 

	
  Section 3.17

  	
  Margin Stock

  	
   

  
	
  Section 3.18

  	
  Use of Proceeds

  	
   

  
	
  Section 3.19

  	
  No Undisclosed Liabilities

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV Conditions

  	
   

  
	
  Section 4.01

  	
  Effective Date

  	
   

  
	
  Section 4.02

  	
  Each Credit Event

  	
   

  
	
  Section 4.03

  	
  Initial Credit Event for each Borrowing
  Subsidiary

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V Affirmative
  Covenants

  	
   

  
	
  Section 5.01

  	
  Financial Statements and Other Information

  	
   

  
	
  Section 5.02

  	
  Notices of Material Events

  	
   

  
	
  Section 5.03

  	
  Information Regarding Collateral

  	
   

  
	
  Section 5.04

  	
  Existence; Conduct of Business

  	
   

  
	
  Section 5.05

  	
  Payment of Obligations

  	
   

  
	
  Section 5.06

  	
  Maintenance of Properties; Insurance

  	
   

  
	
  Section 5.07

  	
  Insurance

  	
   

  
	
  Section 5.08

  	
  Books and Records; Inspection and Audit
  Rights

  	
   

  
	
  Section 5.09

  	
  Compliance with Laws

  	
   

  
	
  Section 5.10

  	
  Use of Proceeds and Letters of Credit

  	
   

  
	
  Section 5.11

  	
  Additional Subsidiaries

  	
   

  
	
  Section 5.12

  	
  Ownership of Subsidiaries

  	
   

  
	
  Section 5.13

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI Negative
  Covenants

  	
   

  
	
  Section 6.01

  	
  Indebtedness

  	
   

  
	
  Section 6.02

  	
  Liens

  	
   

  
	
  Section 6.03

  	
  Fundamental Changes

  	
   

  
	
  Section 6.04

  	
  Investments, Loans, Advances, Guarantees
  and Acquisitions

  	
   

  
	
  Section 6.05

  	
  Asset Sales, etc

  	
   

  
	
  Section 6.06

  	
  Sale and Leaseback Transactions

  	
   

  
	
  Section 6.07

  	
  Swap Agreements

  	
   

  
	
  Section 6.08

  	
  Restricted Payments; Certain Payments in
  Respect of Indebtedness

  	
   

  
	
  Section 6.09

  	
  Transactions with Affiliates

  	
   

  
	
  Section 6.10

  	
  Restrictive Agreements

  	
   

  
	
  Section 6.11

  	
  Change in Fiscal Year

  	
   

  
	
  Section 6.12

  	
  Constitutive Documents

  	
   

  
	
  Section 6.13

  	
  Sales and Assignments of Income, Revenues
  and Receivables

  	
   

  
	
  Section 6.14

  	
  Amendment of Material Documents

  	
   

  
	
  Section 6.15

  	
  Adjusted Leverage Ratio; Leverage Ratio

  	
   

  
	
  Section 6.16

  	
  Fixed Charge Coverage Ratio

  	
   

  
	
  Section 6.17

  	
  Current Ratio

  	
   

  
	
  Section 6.18

  	
  Minimum Tangible Net Worth

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  Events of Default and Remedies

  	
   

  
	
  Section 7.01

  	
  Events of Default

  	
   

  
	
  Section 7.02

  	
  Cash Collateral

  	
   

  

 

ii

 

	
  ARTICLE VIII The
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX Miscellaneous

  	
   

  
	
  Section 9.01

  	
  Notices

  	
   

  
	
  Section 9.02

  	
  Waivers; Amendments

  	
   

  
	
  Section 9.03

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  
	
  Section 9.04

  	
  Successors and Assigns

  	
   

  
	
  Section 9.05

  	
  Survival

  	
   

  
	
  Section 9.06

  	
  Counterparts; Integration; Effectiveness

  	
   

  
	
  Section 9.07

  	
  Severability

  	
   

  
	
  Section 9.08

  	
  Right of Setoff

  	
   

  
	
  Section 9.09

  	
  Governing Law; Consent to Service of
  Process

  	
   

  
	
  Section 9.10

  	
  WAIVER OF JURY TRIAL

  	
   

  
	
  Section 9.11

  	
  Headings

  	
   

  
	
  Section 9.12

  	
  Confidentiality

  	
   

  
	
  Section 9.13

  	
  Interest

  	
   

  
	
  Section 9.14

  	
  Release of Liens and Guarantees

  	
   

  
	
  Section 9.15

  	
  No Novation

  	
   

  
	
  Section 9.16

  	
  USA Patriot Act

  	
   

  
	
  Section 9.17

  	
  Release of Benchmark BV Holdings, Inc.

  	
   

  
	
  Section 9.18

  	
  FINAL AGREEMENT OF THE PARTIES

  	
   

  

 

 

SCHEDULES:

 

Schedule 1.01 –
Unrestricted Subsidiaries

Schedule 2.01 –
Commitments

Schedule 3.01 –
Organization

Schedule 3.06 –
Disclosed Matters

Schedule 3.13 –
Insurance

Schedule 3.15 –
Subsidiaries of Company

Schedule 3.19 –
Liabilities

Schedule 6.01 –
Existing Indebtedness

Schedule 6.02 –
Existing Liens

Schedule 6.04 –
Existing Investments

Schedule 6.10 –
Restrictive Agreements

 

iii

 

EXHIBITS:

 

Exhibit 1.01A –
Form of Assignment and Assumption

Exhibit 1.01B –
Form of Borrowing Request

Exhibit 1.01C –
Form of Borrowing Subsidiary Agreement

Exhibit 1.01D –
Form of Borrowing Subsidiary Termination

Exhibit 1.01E –
Form of Commitment Increase Agreement

Exhibit 1.01G –
Form of Guarantee Agreement

Exhibit 1.01H –
Form of Indemnity, Subrogation and Contribution Agreement

Exhibit 1.01I  –
Form of New Lender Agreement

Exhibit 1.01K –
Form of Pledge Agreement

Exhibit 1.01L –
Form of Security Agreement

 

iv

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”)
dated as of January 20, 2005 (the “Effective Date”), among
Benchmark Electronics, Inc., a Texas corporation (the “Company”), the
Borrowing Subsidiaries party hereto, the Lenders party hereto, JPMorgan Chase
Bank, N.A., as Administrative Agent, Collateral Agent and Issuing Lender, Fleet
National Bank, Wells Fargo Bank, N.A., and Comerica Bank, as Co-Documentation
Agent.

 

PRELIMINARY
STATEMENT:

 

WHEREAS, on August 24, 1999, the Company, the lenders
party thereto and the Administrative Agent entered into the Credit Agreement
(the “Original Credit Agreement”) whereby, upon the terms and conditions
therein stated, such lenders agreed to make term loans and revolving loans to
the Company up to the aggregate amount of $225,000,000, to be used by the
Company for the purposes set forth in Section 5.10 of the Original
Credit Agreement; and

 

WHEREAS, on June 23, 2000, the Company, the lenders
party thereto and the Agent amended the Original Credit Agreement and entered
into Amended and Restated Credit Agreement (as subsequently amended,
hereinafter called the “Amended and Restated Agreement”) whereby, upon
the terms and conditions therein stated, such lenders agreed to increase the
aggregate amount of the revolving loans to $175,000,000, increasing the
aggregate amount of the credit facility to $268,000,000, to be used by the
Company for the purposes set forth in Section 5.10 of the Amended and
Restated Agreement; and

 

WHEREAS, the Company, the Lenders and the Agent
mutually desire to amend and restate certain aspects of the Amended and
Restated Agreement;

 

NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants set forth herein, the Borrower, the Borrowing
Subsidiaries, the Administrative Agent and the Lenders agree to amend and
restate the Amended and Restated Agreement in its entirety as follows:

 

ARTICLE I

 

Definitions

 

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

 

“ABR”, when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Alternate Base
Rate.

 

“Acquisition” means any acquisition permitted
under Section 6.04(f).

 

“Act” has the meaning set forth in Section 9.16.

 

“Adjusted Leverage Ratio” means, on any date,
the ratio of (a) Total Indebtedness as of such date to (b) Consolidated EBITDA
for the period of four consecutive fiscal quarters of

 

 

the Company and its
Restricted Subsidiaries ended on such date (or, if such date is not the last
day of a fiscal quarter, ended on the last day of the fiscal quarter of the
Company most recently ended prior to such date).

 

“Adjusted LIBO Rate” means, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO
Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means JPMorgan Chase
Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.

 

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

 

“Affiliate” means, with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with
the Person specified.

 

“Alternate Base Rate” means, for any day, a
rate per annum equal to the greatest of (a) the Prime Rate in effect on such
day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal
Funds Effective Rate in effect on such day plus 1⁄2 of 1%.  Any change in the Alternate Base Rate due to
a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.

 

“Amended and Restated Agreement” has the
meaning set forth in the Preliminary Statement.

 

“Applicable Margin” means, for any day, with
respect to any ABR Loan or Eurodollar Loan, or with respect to the commitment
fees payable hereunder, as the case may be, the applicable rate per annum set
forth below under the caption “ABR Spread”, “Eurodollar Spread” or “Commitment
Fee Rate”, as the case may be, based upon the Adjusted Leverage Ratio as of the
end of the most recent fiscal determination date:

 

 

	
  Adjusted Leverage Ratio

  	
   

  	
  ABR Spread

  	
   

  	
  Eurodollar Spread

  	
   

  	
  Commitment Fee Rate

  	
   

  
	
  Category 1 >
  2.00 to 1.00

  	
   

  	
  .25

  	
  %

  	
  1.75

  	
  %

  	
  .35

  	
  %

  
	
  Category 2 >
  1.50 to 1.00

  	
   

  	
  0.0

  	
  %

  	
  1.50

  	
  %

  	
  .30

  	
  %

  
	
  Category 3 >
  1.00 to 1.00

  	
   

  	
  0.0

  	
  %

  	
  1.25

  	
  %

  	
  .25

  	
  %

  
	
  Category 4 £
  1.00 to 1.00

  	
   

  	
  0.0

  	
  %

  	
  1.00

  	
  %

  	
  .20

  	
  %

  

 

For purposes of the foregoing, (i) the Adjusted
Leverage Ratio shall be determined as of the end of each fiscal quarter of the
Company’s fiscal year based upon the Company’s consolidated financial
statements delivered pursuant to Section 5.01(a) or (b) and
(ii) each change in the Applicable Margin resulting from a change in the
Adjusted Leverage

 

2

 

Ratio shall be effective
during the period commencing on and including the date of delivery to the
Administrative Agent of such consolidated financial statements indicating such
change and ending on the date immediately preceding the effective date of the
next such change; provided that the Adjusted Leverage Ratio shall be deemed to
be in Category 1 under each of the above tables at the option of the
Administrative Agent or at the request of the Required Lenders if the Company
fails to deliver the consolidated financial statements or the related
compliance certificate required to be delivered by it pursuant to Sections
5.01(a), (b) or (c) during the period from the expiration of
the time for delivery thereof until such consolidated financial statements are
delivered.

 

“Applicable Percentage” means, with respect to
any Lender, the percentage of the total Commitments represented by such Lender’s
Commitment.  If the Commitments have
terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments.

 

“Approved Fund” has the meaning assigned to
such term in Section 9.04.

 

“Approved Jurisdiction” means any of the
Republic of Ireland, Scotland, the Kingdom of Sweden or the Republic of
Singapore.

 

“Assessment Rate” means, for any day, the
annual assessment rate in effect on such day that is payable by a member of the
Bank Insurance Fund classified as “well-capitalized” and within supervisory
subgroup “B” (or a comparable successor risk classification) within the meaning
of 12 C.F.R. Part 327 (or any successor provision) to the Federal Deposit
Insurance Corporation for insurance by such Corporation of time deposits made
in dollars at the offices of such member in the United States; provided
that if, as a result of any change in any law, rule or regulation, it is no
longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be determined by the
Administrative Agent to be representative of the cost of such insurance to the
Lenders.

 

“Assignment and Assumption” means an assignment
and assumption entered into by a Lender and an assignee (with the consent of
any party whose consent is required by Section 9.04), and accepted
by the Administrative Agent, in the form of Exhibit 1.01A or any other
form approved by the Administrative Agent.

 

“Availability Period” means the period from and
including the Effective Date to but excluding the earlier of the Maturity Date
and the date of termination of the Commitments.

 

“Base CD Rate” means the sum of (a) the
Three-Month Secondary CD Rate multiplied by the Statutory Reserve Rate plus (b)
the Assessment Rate.

 

“Board” means the Board of Governors of the
Federal Reserve System of the United States of America.

 

“Board of Directors” means the Board of
Directors of the Company or any committee thereof duly authorized to act on
behalf of such Board.

 

“Borrower” means the Company or any Borrowing
Subsidiary.

 

3

 

“Borrowing” means Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans,
as to which a single Interest Period is in effect.

 

“Borrowing Request” means a request by the
Borrower for a Borrowing in accordance with Section 2.03, substantially
in the form of Exhibit 1.01B.

 

“Borrowing Subsidiary” means, at any time, each
Restricted Subsidiary incorporated or organized in a State of the United States
of America or an Approved Jurisdiction that has been designated as a Borrowing
Subsidiary by the Company pursuant to Section 2.19 and that has not
ceased to be a Borrowing Subsidiary as provided in such Section.

 

“Borrowing Subsidiary Agreement” means a
Borrowing Subsidiary Agreement substantially in the form of Exhibit 1.01C.

 

“Borrowing Subsidiary Termination” means a
Borrowing Subsidiary Termination substantially in the form of Exhibit 1.01D.

 

“Business Day” means any day that is not a
Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to remain closed; provided that, when used in
connection with a Eurodollar Loan, the term “Business Day” shall also
exclude any day on which banks are not open for dealings in dollar deposits in
the London interbank market.

 

“Capital Expenditures” means, for any period,
all expenditures (whether paid in cash or accrued as a liability, including the
portion of Capital Lease Obligations originally incurred during such period
that are capitalized on the consolidated balance sheet of the Company) by the
Company and its Restricted Subsidiaries during such period, that, in conformity
with GAAP, are included in “capital expenditures”, “additions to property,
plant or equipment” or comparable items in the consolidated financial
statements of the Company, but excluding expenditures for the restoration,
repair or replacement of any fixed or capital asset that was destroyed or
damaged, in whole or in part, in an amount equal to any insurance proceeds
received in connection with such destruction or damage.

 

“Cash Interest Expense” means, for any period,
the sum of all cash payments of interest and prepayment charges, if any,
including, without limitation, all net amounts payable (or receivable) under
interest rate protection agreements and all imputed interest in respect of
Capital Lease Obligations paid by the Company and its Restricted Subsidiaries
on all consolidated basis during such period.

 

“Capital Lease Obligations” of any Person means
the obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal property, or
a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP and any obligations of such Person under any
synthetic lease financing whether or not such obligation is classified as a
capital lease under GAAP.

 

4

 

“Change in Control” means (a) the acquisition
of ownership, directly or indirectly, beneficially or of record, by any Person
or group (within the meaning of the Securities Exchange Act of 1934 and the
rules of the Securities and Exchange Commission thereunder as in effect on the
Effective Date), of Equity Interests representing more than 50% of either the
aggregate ordinary voting power or the aggregate equity value represented by
the issued and outstanding Equity Interests in the Company; (b) occupation of a
majority of the seats (other than vacant seats) on the Board of Directors by
Persons who were neither (i) nominated by the current Board of Directors nor
(ii) appointed by directors so nominated; or (c) a Change of Control or similar
event, however denominated, under any Subordinated Indebtedness or any other
Material Indebtedness.

 

“Change in Law” means (a) the adoption of any
law, rule or regulation after the Effective Date, (b) any change in any law,
rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the Effective Date or (c) compliance by any Lender
or the Issuing Lender (or, for purposes of Section 2.14, by any lending
office of such Lender or by such Lender’s or the Issuing Lender’s holding
company, if any) with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority made or issued after the
Effective Date.

 

“Co-Documentation Agent” means Fleet National
Bank, Wells Fargo Bank, N.A. and Comerica Bank, each in their capacity as
Co-Documentation Agent.

 

“Code” means the Internal Revenue Code of 1986,
as amended from time to time.

 

“Collateral” means any and all “Collateral”, as
defined in any applicable Security Document.

 

“Collateral Agent” means JPMorgan Chase Bank,
N.A. in its capacity as collateral agent for the Lenders hereunder.

 

“Collateral and Guarantee Requirement” means,
at any time, that the following requirements shall be satisfied (to the extent
such requirements are stated to be applicable at the time under clause (a) or
(b) below):

 

(a)           at
all times on and after the Effective Date:

 

(i)            the
Guarantee Agreement (or a supplement thereto) shall have been executed by the
Company and each Domestic Subsidiary existing at such time, shall have been
delivered to the Collateral Agent and shall be in full force and effect;

 

(ii)           one or
more Pledge Agreements (or supplements thereto) shall have been duly executed
and delivered by the Company and each Domestic Subsidiary existing at such time
and directly owning any outstanding Equity Interests or any Indebtedness, and
there shall have been duly and validly pledged to the Collateral Agent
thereunder, for the ratable benefit of the Secured Parties (A) all the
outstanding Equity Interests (other than Equity Interests in any Foreign
Subsidiary) owned

 

5

 

directly by the
Company or any Domestic Subsidiary, (B) 65% of the outstanding voting Equity
Interests, and 100% of the outstanding non-voting Equity Interests (or, in each
case, such lesser percentages as shall be owned by the Company and the Domestic
Subsidiaries) in each Foreign Subsidiary owned in whole or in part directly by
the Company or any Domestic Subsidiary and (C) all Indebtedness that is owed to
the Company or any Domestic Subsidiary; and any certificates, promissory notes
or other instruments representing the Equity Interests or Indebtedness pledged
or subjected to a charge under the Pledge Agreements, accompanied by stock
powers or other instruments of transfer endorsed in blank, shall be in the
actual possession of the Collateral Agent and all other steps required under
applicable law or requested by the Collateral Agent to ensure that the Pledge
Agreements create valid, first priority, perfected Liens (subject to Permitted
Encumbrances) on all the Collateral subject thereto shall have been taken;

 

(iii)          one
or more Security Agreements (or supplements thereto) shall have been duly
executed and delivered by the Company and each Domestic Subsidiary existing at
such time and there shall have been subjected to security interests thereunder
securing the Obligations all the assets of each such Person in which a security
interest can be created under the UCC, and all documents and instruments,
including UCC financing statements, required by law or reasonably requested by
the Collateral Agent to be filed, registered or recorded to create the security
interests intended to be created by the Security Agreements and perfect such
Liens to the extent required by, and with the priority required by, the
Security Agreements, shall have been filed, registered or recorded (or
arrangements satisfactory to the Collateral Agent for such filing, registration
or recording shall have been made);

 

(iv)          the
Indemnity, Subrogation and Contribution Agreement (or a supplement thereto)
shall have been executed by the Company and each Domestic Subsidiary party to
the Guarantee Agreement, any Pledge Agreement or any Security Agreement, shall
have been delivered to the Collateral Agent and shall be in full force and
effect; and

 

(v)           each Loan
Party shall have obtained all consents and approvals required to be obtained by
it in connection with the execution and delivery of all Security Documents to
which it is a party, the performance of its obligations thereunder and the
granting by it of the Liens thereunder; and

 

(b)           at all
times when there shall be one or more Foreign Subsidiaries that are Foreign
Borrowers under this Agreement:

 

(i)            the
Guarantee Agreement (or a supplement thereto) shall have been executed by each
Foreign Subsidiary that is a direct or indirect

 

6

 

parent of any such
Foreign Borrower (a “Foreign Parent”) (it being understood that each
Foreign Parent will guarantee only the Obligations of Foreign Borrowers that
are its subsidiaries), shall have been delivered to the Collateral Agent and
shall be in full force and effect;

 

(ii)           one or
more Pledge Agreements (or supplements thereto) shall have been duly executed
and delivered by each Foreign Borrower and each Foreign Parent of such Foreign
Borrower existing at such time and directly owning any outstanding Equity
Interests or any Indebtedness, and there shall have been duly and validly
pledged to the Collateral Agent under the Pledge Agreement, for the ratable
benefit of the Secured Parties, (A) all the Equity Interests in such Foreign
Borrower, each Foreign Parent of such Foreign Borrower and each Subsidiary
directly owned in whole or in part by such Foreign Borrower or any such Foreign
Parent, including any such Equity Interests owned by the Company and the
Domestic Subsidiaries that are not pledged pursuant to clause (a)(ii) above and
(B) all the Indebtedness that is owed to such Foreign Borrower or a Foreign
Parent (it being understood that the Equity Interests and Indebtedness referred
to in this clause (ii) will secure only the Obligations of such Foreign
Borrower); and any certificates, promissory notes or other instruments
representing such Equity Interests or Indebtedness, accompanied by stock powers
or other instruments of transfer endorsed in blank, shall be in the actual
possession of the Collateral Agent and all other steps required under applicable
law or requested by the Collateral Agent to ensure that the Pledge Agreements
create valid, first priority, perfected Liens (subject to Permitted
Encumbrances) on all the Collateral subject thereto shall have been taken; and

 

(iii)          one
or more Security Agreements (or supplements thereto) shall have been duly
executed and delivered by each Foreign Borrower or Foreign Parent of such
Foreign Borrower existing at such time and there shall have been subjected to
security interests thereunder securing the Obligations of such Foreign Borrower
(but not any obligations of the Company or any Domestic Subsidiary) all the
personal property or fixtures (within the meaning of the UCC) of such Person in
which a security interest can be created under the laws of each applicable
jurisdiction, with such exceptions as the Collateral Agent may approve in its
sole discretion, and without liability to any party hereto, taking into account
the cost and difficulty involved in creating or perfecting any such security
interest and the benefits to the Lenders that would result therefrom, and all
documents and instruments required by law or reasonably requested by the
Collateral Agent to be filed, registered or recorded to create the security
interests intended to be created by the Security Agreements and perfect such
Liens to the extent required by, and with the priority required by, the
Security Agreements, shall have been filed, registered or recorded (or
arrangements satisfactory to the Collateral Agent for such filing, registration
or recording shall have been made).

 

7

 

Notwithstanding any of the foregoing provisions of
this definition, if the Company or any Subsidiary shall be using commercially
reasonable efforts to create or perfect any pledge of Equity Interests in or
Indebtedness of any Foreign Subsidiary, the failure to have created or
perfected such pledge shall not, in and of itself, prevent the Collateral and
Guarantee Requirement from being satisfied until (x) the later of (i) the 90th
day after the Effective Date and (ii) the 90th day after the acquisition of
such Collateral by the Company or a Domestic Subsidiary or (y) if, in the
judgment of the Collateral Agent, the Company is endeavoring in good faith to
satisfy the Collateral and Guarantee Requirement, the 180th day after the
acquisition of such Collateral by the Company or a Domestic Subsidiary.

 

“Commitment” means, with respect to each
Lender, the commitment of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolving Exposure
hereunder, as such commitment may be (a) reduced or increased from time to time
pursuant to Section 2.07 or Section 2.18 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.  The
initial amount of each Lender’s Commitment is set forth on Schedule 2.01,
or in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Commitment, as applicable. 
The initial aggregate amount of the Lenders’ Commitments is
$100,000,000.

 

“Commitment Increase Agreement” means a
Commitment Increase Agreement substantially in the form of Exhibit 1.01E
among the Borrower, the Administrative Agent and a Lender.

 

“Commitment Increase Notice” has the meaning
assigned to such term in Section 2.18.

 

“Company” means Benchmark Electronics, Inc., a
Texas corporation.

 

“Consolidated EBITDA” means, for any period,
the EBITDA of the Company and its Restricted Subsidiaries for such period
determined on a consolidated basis; provided that (i) solely for
purposes of calculating the Leverage Ratio and Adjusted Leverage Ratio, but not
for any other purpose, Consolidated EBITDA for any period of four fiscal
quarters during which an Acquisition shall have occurred shall be computed on a
pro forma consolidated basis to include the EBITDA of such Acquisition and (ii)
solely for purposes of calculating the Leverage Ratio but not for any other
purpose, all references to Restricted Subsidiaries in this definition and in
the definitions referred to herein shall be deemed references to Subsidiaries.

 

“Consolidated Net Income” means, for any Person
for any period, the net income (or loss) of such person and its subsidiaries
during such period, calculated and consolidated or combined in accordance with
GAAP; provided that there shall be excluded from such net income (to the
extent otherwise included therein) the following: (i) any non-cash,
non-recurring charges, (ii) gains or losses attributable to Property sales not
in the ordinary course of business, and (iii) the cumulative effect of a change
in accounting principles and any gains or losses attributable to writeups or
writedowns of assets.

 

8

 

“Consolidated Net Tangible Assets” means the
total assets of the Company and its Restricted Subsidiaries less, without
duplication, (i) intangible assets including, without limitation, goodwill,
research and development costs, trademarks, trade names, patents, franchises,
copyrights, licenses and like general intangibles, experimental or
organizational expense, unamortized debt discount and expense carried as an
asset, all reserves and any write-up in the book of value of assets made after
the Effective Date (other than write-ups of assets of a going concern business
made within 12 months after the acquisition of such business), net of
accumulated amortization and (ii) all reserves for depreciation and other asset
valuation reserves (but excluding reserves for federal, state and other income
taxes).

 

“Consolidated Tangible Net Worth” means, at any
time:

 

(A)          the total
assets of the Company and its Restricted Subsidiaries which would be shown as assets
on a consolidated balance sheet of the Company and its Restricted Subsidiaries
as of such time prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the stock and surplus
of Restricted Subsidiaries, minus

 

(B)           the total
liabilities of the Company and its Restricted Subsidiaries which would be shown
as liabilities on a consolidated balance sheet of the Company and its
Restricted Subsidiaries as of such time prepared in accordance with GAAP, minus

 

(C)           the net
book amount of all assets of the Company and its Restricted Subsidiaries (after
deducting any reserves applicable thereto) that would be shown as intangible
assets on a consolidated balance sheet of the Company and its Restricted Subsidiaries
as of such time prepared in accordance with GAAP.

 

“Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ability to exercise voting power, by
contract or otherwise.  “Controlling”
and “Controlled” have meanings correlative thereto.

 

“Current Assets” means all assets of a Person
which under GAAP would be classified as current assets.

 

“Current Liabilities” means all liabilities of
a Person which under GAAP would be classified as current liabilities, other
than current maturities of Long-Term Indebtedness and the obligation to repay
the Revolving Loans.

 

“Current Ratio” means, on any day, the ratio of
(a) the Current Assets of the Company and its Restricted Subsidiaries to (b)
the Current Liabilities of the Company and its Restricted Subsidiaries, each on
a consolidated basis.

 

“Debt Service” means, for any period, the sum
of (a) Cash Interest Expense for such period and(b) scheduled principal
payments on Total Indebtedness for such period.

 

9

 

“Default” means any event or condition that
constitutes an Event of Default or that upon notice, lapse of time or both
would, unless cured or waived, become an Event of Default.

 

“Disclosed Matters” means the actions, suits
and proceedings and the environmental matters disclosed in Schedule 3.06.

 

“dollars” or “$” refers to lawful money
of the United States of America.

 

“Domestic Subsidiaries” means all Subsidiaries
incorporated or organized under the laws of the United States of America, any
State thereof or the District of Columbia.

 

“EBITDA” means, for any Person for any period,
without duplication, the Consolidated Net Income of such Person for such period
plus, to the extent deducted in determining such Consolidated Net
Income, Cash Interest Expense, depreciation, amortization, other non-cash,
non-recurring charges and income tax (including state franchise taxes based
upon income) expense.

 

“Effective Date” has the meaning in the
preamble of this Agreement.

 

“Environmental Laws” means all laws, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions,
notices or binding agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or threatened release
of any Hazardous Material or to health and safety matters.

 

“Environmental Liability” means any liability,
contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of the Company or
any Subsidiary directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

 

“Equity Interests” means shares of capital
stock, partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a
Person, and any warrants, options or other rights entitling the holder thereof
to purchase or acquire any such equity interest.

 

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

 

“ERISA Affiliate” means any trade or business
(whether or not incorporated) that, together with the Company, is treated as a
single employer under Section 414(b) or (c) of the Code or,
solely for purposes of Section 302 of ERISA and Section 412 of
the Code, is treated as a single employer under Section 414 of the Code.

 

10

 

“ERISA Event” means (a) any “reportable event”,
as defined in Section 4043 of ERISA or the regulations issued thereunder
with respect to a Plan (other than an event for which the 30-day notice period
is waived); (b) the existence with respect to any Plan of an “accumulated
funding deficiency” (as defined in Section 412 of the Code or Section
302 of ERISA), whether or not waived; (c) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Company or any of its ERISA Affiliates of any liability under
Title IV of ERISA with respect to the termination of any Plan; (e) the receipt
by the Company or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the Company or
any of its ERISA Affiliates of any liability with respect to the withdrawal or
partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by
the Company or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Company or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

“Eurodollar”, when used in reference to any
Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to
such term in ARTICLE VII.

 

“Excluded Taxes” means, with respect to the
Administrative Agent, any Lender, the Issuing Lender or any other recipient of
any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America, or by the jurisdiction under the laws
of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the Borrower
is located and (c) in the case of a Foreign Lender (other than an assignee
pursuant to a request by the Borrower under Section 2.17(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender’s failure to
comply with Section 2.15(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.15(a).

 

“Federal Funds Effective Rate” means, for any
day, the weighted average (rounded upwards, if necessary, to the next 1/100 of
1%) of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.

 

11

 

“Fee Letter” means the letter agreement dated
December 15, 2004, between the Borrower and the Administrative Agent.

 

“Fiscal Quarter” means the fiscal quarter of
the Company, ending on the last day of each March, June, September and December
of each year.

 

“Financial Officer” means the chief financial
officer, principal accounting officer, treasurer or controller of the Borrower.

 

“Fixed Charge Coverage Ratio” means, for any
period, the ratio of (i) Consolidated EBITDA plus Lease Expense and less cash
taxes of the Company and its Restricted Subsidiaries for such period to (ii)
the Debt Service plus Capital Expenditures plus Lease Expense of the Company
and its Restricted Subsidiaries for such period.

 

“Foreign Borrower” means any Borrowing
Subsidiary that is a Foreign Subsidiary.

 

“Foreign Lender” means, with respect to any
Borrower, any Lender that is organized under the laws of a jurisdiction other
than that in which such Borrower is located. 
For purposed of the definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.

 

“Foreign Subsidiary” means any Subsidiary that
is organized under the laws of a jurisdiction other than the United States of
America or any State thereof or the District of Columbia.

 

“GAAP” means generally accepted accounting
principles in the United States of America.

 

“Governmental Approval” means (ii) any
authorization, consent, approval, license, waiver, ruling, permit, tariff,
rate, certification, exemption, filing, variance, claim, order, judgment,
decree, sanction or publication of, by or with; (iii)any notice to; (iv) any
declaration of or with; or (v) any registration by or with, or any other action
or deemed action by or on behalf of, any Governmental Authority.

 

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

 

“Guarantee” of or by any Person (the “guarantor”)
means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation
of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct
or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase
(or to advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or

 

12

 

services for the purpose
of assuring the owner of such Indebtedness or other obligation of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or other obligation or (d) as an account
party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation; provided, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

 

“Guarantee Agreement” means the Guarantee
Agreement substantially in the form of Exhibit 1.01G among the Company,
the Guarantors from time to time party thereto and the Collateral Agent for the
benefit of the Secured Parties, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions hereof.

 

“Guarantors” means all the Domestic
Subsidiaries and the Foreign Parent of each Foreign Borrower who is required to
execute a Guarantee Agreement pursuant to paragraph (b)(i) of the definition of
Collateral and Guarantee Requirement.

 

“Hazardous Materials”  means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

 

“Highest Lawful Rate” means, as to any Lender
or the Issuing Lender, the maximum nonusurious rate of interest that, under
applicable law, may be contracted for, taken, reserved, charged or received by
such Lender on the Loans or under the Loan Documents at any time or from time
to time.  If the maximum rate of interest
which, under applicable law, any of such Lenders are permitted to charge the
Borrower on the Loans shall change after the date hereof, to the extent
permitted by applicable law, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, as of the effective time of such
change without notice to the Borrower or any other Person.

 

“Indebtedness” of any Person means, without
duplication, (a) all obligations of such Person for borrowed money or with
respect to deposits or advances of any kind, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments,
(c) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (d) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding accounts payable incurred in the ordinary
course of business), (e) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by such Person,
whether or not the Indebtedness secured thereby has been assumed, (f) all
Guarantees by such Person of Indebtedness of others, (g) all Capital Lease
Obligations of such Person, (h) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (i) all obligations, contingent or otherwise, of such Person in respect
of bankers’ acceptances.  The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such

 

13

 

Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Taxes” means Taxes other than
Excluded Taxes.

 

“Indemnity, Subrogation and Contribution Agreement”
means the Indemnity, Subrogation and Contribution Agreement substantially in
the form of Exhibit 1.01H among the Company, the Domestic Subsidiaries
from time to time party thereto and the Collateral Agent for the benefit of the
Secured Parties, as the same may be amended, modified or supplemented from time
to time in accordance with the provisions hereof.

 

“Intercompany Indebtedness” means any
indebtedness of the Company or any Subsidiary owed to and held by the Company
or any Wholly Owned Subsidiary; provided that any subsequent issuance or
transfer of any Equity Interest which results in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent transfer
of such indebtedness (other than to the Company or another Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute a new incurrence of
Indebtedness other than Intercompany Indebtedness by the issuer thereof.

 

“Interest Election Request” means a request by
the Borrower to convert or continue a Borrowing in accordance with Section
2.06.

 

“Interest Payment Date” means (a) with respect
to any ABR Loan, the last day of each March, June, September and December, and
(b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest
Period.

 

“Interest Period” means with respect to any
Eurodollar Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day in the calendar month that is one,
two, three or six months thereafter, as the Borrower may elect; provided, that
(a) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day
and (b) any Interest Period that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing.

 

“Issuing Lender” means JPMorgan Chase Bank,
N.A. in its capacity as the issuer of Letters of Credit hereunder, and its
successors in such capacity as provided in Section 2.05.  The Issuing Lender may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the
Issuing Lender, in which case the term “Issuing Lender” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.

 

14

 

“Joinder to, Ratification and Amendment of
Guarantee Agreement” means that certain Joinder to, Ratification and
Amendment of Guarantee Agreement dated of even date herewith by and among the
Company and Benchmark Electronics Delaware Corp., Benchmark Electronics
Huntsville, Inc., Avex Constitution, Inc., Benchmark BV Holdings, Inc., Avex
Liberty, Inc., Avex Holdings, Inc., Benchmark Electronics California, Inc.,
Benchmark Electronics Company and Administrative Agent.

 

“Joinder to, Ratification and Amendment of
Indemnity, Subrogation and Contribution Agreement” means that certain
Joinder to, Ratification and Amendment of Indemnity, Subrogation and
Contribution Agreement dated of even date herewith by and among the Company,
Benchmark Electronics Delaware Corp., Benchmark Electronics Huntsville, Inc.,
Avex Constitution, Inc., Avex Liberty, Inc., Benchmark BV Holdings, Inc., Avex
Holdings, Inc., Benchmark Electronics California, Inc., Benchmark Electronics
Company and Administrative Agent.

 

“Joinder to, Ratification and Amendment of Pledge
Agreement” means that certain Joinder to, Ratification and Amendment of
Pledge Agreement dated of even date herewith by and among the Company,
Benchmark Electronics Delaware Corp., Benchmark Electronics Huntsville, Inc.,
Avex Constitution, Inc., Avex Liberty, Inc., Benchmark BV Holdings, Inc., Avex
Holdings, Inc., Benchmark Electronics California, Inc., Benchmark Electronics
Company and Administrative Agent.

 

“Joinder to, Ratification and Amendment of Security
Agreement” means that certain Joinder to, Ratification and Amendment of
Security Agreement dated of even date herewith by and among the Company,
Benchmark Electronics Delaware Corp., Benchmark Electronics Huntsville, Inc.,
Avex Constitution, Inc., Avex Liberty, Inc., Benchmark BV Holdings, Inc., Avex
Holdings, Inc., Benchmark Electronics California, Inc., Benchmark Electronics
Company and Administrative Agent.

 

“Law” means all laws, statutes, treaties,
ordinances, codes, acts, rules, regulations, Government Approvals and Orders of
all Governmental Authorities, whether now or hereafter in effect.

 

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

 

“LC Exposure” means, at any time, the sum of
(a) the aggregate undrawn amount of all outstanding Letters of Credit at such
time plus (b) the aggregate amount of all LC Disbursements that have not
yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender at any time
shall be its Applicable Percentage of the total LC Exposure at such time.

 

“Lease Expense” for any period shall mean gross
operating lease obligations of the Borrower and its Restricted Subsidiaries for
any relevant period for which such calculation is being utilized.

 

15

 

“Lenders” means the Persons listed on Schedule
2.01 and any other Person that shall have become a Lender hereto pursuant
to an Assignment and Assumption, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Assumption.

 

“Letter of Credit” means any letter of credit
issued pursuant to this Agreement.

 

“Leverage Ratio” means, on any date, the ratio
of (a) Total Indebtedness as of such date to (b) Consolidated EBITDA for the
period of four consecutive fiscal quarters of the Company ended on such date
(or, if such date is not the last day of a fiscal quarter, ended on the last
day of the fiscal quarter of the Company most recently ended prior to such
date); provided, that for purposes of determining the Leverage Ratio, all
references in the definitions of Total Indebtedness and Consolidated EBITDA
(and in the definitions used therein) to Restricted Subsidiaries shall be
deemed references to Subsidiaries.

 

“LIBO Rate” means, with respect to any
Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750
of the Dow Jones Market Service (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing rate
quotations comparable to those currently provided on such page of such Service,
as determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available
at such time for any reason, then the “LIBO Rate” with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period
are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

 

“Lien” means, with respect to any asset, (a)
any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge
or security interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party with respect to
such securities.  For the purposes of
this Agreement and the other Loan Documents, the Company or any Subsidiary of
the Company shall be deemed to be the owner of any Property which it has
acquired or holds subject to a conditional sale agreement, financing lease or
other arrangement pursuant to which title to the Property has been retained by
or vested in some other Person for security purposes.

 

“Loan Documents” means this Agreement, each
Borrowing Subsidiary Agreement, each Borrowing Subsidiary Termination, the
Guarantee Agreement, the Indemnity Subrogation and Contribution Agreement, the
Letters of Credit (and any applications therefor and reimbursement agreements relating
thereto), the Security Documents, any promissory note issued pursuant to Section
2.08.

 

16

 

“Loan Parties” means each Borrower and each
Subsidiary that is party to the Guarantee Agreement or any Security Document.

 

“Loans” means the loans made by the Lenders to
the Borrower pursuant to this Agreement.

 

“Long-Term Indebtedness” means any Indebtedness
that, in accordance with GAAP, constitutes (or, when incurred, constituted) a
long-term liability.

 

“Material Adverse Effect” means any event,
development or circumstance that has had or could reasonably be expected to
have a material adverse effect on (a) the business, assets, property or
condition (financial or otherwise) of the Borrower and the Subsidiaries taken
as a whole, or (b) the validity or enforceability of any of the Loan Documents
or the rights or remedies of the Administrative Agent or the Lenders.

 

“Material Indebtedness” means Indebtedness
(other than the Loans and Letters of Credit), or obligations in respect of one
or more Swap Agreements, of any one or more of the Borrower and its
Subsidiaries in an aggregate principal amount exceeding $25,000,000.  For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of the Borrower or any
Subsidiary in respect of any Swap Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Swap Agreement were terminated
at such time.

 

“Maturity Date” means January 20, 2008.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

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

 

“Net Cash Proceeds” means, with respect to any
event, (a) the cash proceeds received in respect of such event net of all
brokerage commissions, reasonable fees and out-of-pocket expenses paid by the
Company to third parties (other than Affiliates) in connection with such event.

 

“Net Worth” means, at any time and from time to
time, the net worth of the Company and its Subsidiaries on a consolidated
basis, determined in accordance with GAAP.

 

“New Lender” has the meaning set forth in Section
2.18(b).

 

“New Lender Agreement” means an agreement among
the Borrower, the Administrative Agent and a New Lender in substantially in the
form of Exhibit 1.01I or a form that is reasonably satisfactory to the
Administrative Agent.

 

“Obligations” means (a) the due and punctual
payment by the Borrowers or the applicable Loan Parties of (i) the principal of
and premium, if any, and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the

 

17

 

Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) each payment required to be made by the Borrowers under this
Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Loan Parties to the Secured Parties under
this Agreement and the other Loan Documents, (b) the due and punctual payment
and performance of all covenants, agreements, obligations and liabilities of
the Loan Parties, monetary or otherwise, under or pursuant to this Agreement
and the other Loan Documents and (c) the due and punctual payment of all
obligations of the Company under each Swap Agreement entered into (i) prior to
the Effective Date with any counterparty that is a Lender (or an Affiliate
thereof) on the date hereof or (ii) on or after the Effective Date with any
counterparty that is a Lender (or an Affiliate thereof) at the time such Swap
Agreement is entered into.

 

“Order” means an order, writ, judgment, award,
injunction, decree, ruling or decision of any Governmental Authority or
arbitrator.

 

“Original Credit Agreement” has the meaning set
forth in the Preliminary Statement.

 

“Other Taxes” means any and all present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement.

 

“Participant” has the meaning set forth in Section
9.04.

 

“PBGC” means the Pension Benefit Guaranty
Corporation referred to and defined in ERISA and any successor entity
performing similar functions.

 

“Permitted Encumbrances” means:

 

(a)           Liens
imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.05;

 

(b)           carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 90 days or are being contested in
compliance with Section 5.05;

 

(c)           pledges
and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations;

 

18

 

(d)           deposits
to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature, in each case in the ordinary course of business;

 

(e)           judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;

 

(f)            easements,
zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Company or any Subsidiary;

 

(g)           any
obligations or duties affecting any of the property of the Company or the
Subsidiaries to any municipality or public authority with respect to any
franchise, grant, license or permit which do not materially impair the use of
such property for the purposes for which it is held;

 

(h)           Liens
arising from precautionary UCC financing statements regarding operating leases;
and

 

(i)            Liens
arising out of consignment or similar arrangements for the sale of goods
entered into by the Company or any of its Subsidiaries in the ordinary course
of business.

 

provided
that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.

 

“Permitted Investments” means:

 

(a)           direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States of America), in each case maturing within one year from
the date of acquisition thereof;

 

(b)           investments in commercial paper maturing within one year
from the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from S&P or from Moody’s;

 

(c)           investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within 364 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United
States of America or any State thereof which (i) has a combined capital and
surplus and undivided profits of not less than $500,000,000 and (ii) has
short-term credit ratings of at least A1 and P1 by S&P and Moody’s,
respectively;

 

(d)           fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and entered
into with a financial institution satisfying the criteria described in clause
(c) above; provided  that the Company shall take possession of all
securities purchased by the Company or any Subsidiary under repurchase

 

19

 

agreements and shall adhere to
customary margin and mark-to-market procedures with respect to fluctuations in
value; and

 

(e)           money
market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii)
are rated AAA by S&P and Aaa by Moody’s or invest solely in the assets
described in clauses (a) through (d) above and (iii) have portfolio
assets of at least $5,000,000,000;

 

(f)            municipal
investments with a rating of AAA by S&P and Aaa by Moody’s and a maximum
maturity of one year (for securities where the interest rate is adjusted
periodically (e.g. floating rate securities), the interest rate reset date will
be used to determine the maturity date); and

 

(g)           variable
rate notes issued by, or guaranteed by, any state agency, municipality or
domestic corporation rated A-1 (or the equivalent thereof) or better by S&P
or P-1 (or the equivalent thereof) or better by Moody’s and maturing within 364
days from the date of acquisition (the interest rate reset date will be used to
determine the maturity date).

 

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

 

“Plan”  means any employee pension benefit
plan (other than a Multiemployer Plan) subject to the provisions of Title IV of
ERISA or Section 412 of the Code or Section 302 of ERISA, and in
respect of which the Company or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an “employer”
as defined in Section 3(5) of ERISA.

 

“Pledge Agreements” means (a) a Pledge Agreement
substantially in the form of Exhibit 1.01K among the Company, the
Subsidiaries from time to time party thereto and the Collateral Agent and (b)
in connection with pledges of shares of or other equity interests in Foreign
Subsidiaries, other pledge agreements or similar agreements in form and
substance satisfactory to the Collateral Agent, as the same may be amended,
modified or supplemented from time to time in accordance with the provisions
hereof.

 

“Prime Rate” means the rate of interest per
annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.

 

“Qualified Foreign Subsidiary Holding Company”
means a Domestic Subsidiary that does not own any assets other than, or engage
in any business or activity other than the ownership of, Equity Interests of
one or more Domestic or Foreign Subsidiaries and that does not have any
Indebtedness or liabilities other than (a) liabilities incidental to its
ownership of such Equity Interests and (b) liabilities as a Guarantor of the
Obligations.

 

“Quarterly Dates” means the last day of each
March, June, September and December in each year.

 

20

 

“Re-Allocation Date” has the meaning set forth
in Section 2.18(e).

 

“Register” has the meaning set forth in Section
9.04(b).

 

“Related Parties” means, with respect to any
specified Person, such Person’s Affiliates and the respective directors,
officers, employees, agents and advisors of such Person and such Person’s
Affiliates.

 

“Required Lenders” means, at any time, Lenders
having Revolving Exposures and unused Commitments representing at least 51% of
the sum of the total Revolving Exposures and unused Commitments at such time.

 

“Restricted Payment” means any dividend or
other distribution (whether in cash, securities or other property) with respect
to any Equity Interests in the Company or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests in the
Company or any option, warrant or other right to acquire any such Equity
Interests in the Company.

 

“Restricted Subsidiary” means (a) any Domestic
Subsidiary and (b) any Foreign Subsidiary that is not an Unrestricted
Subsidiary.

 

“Revolving Exposure” means, with respect to any
Lender at any time, the sum of the (a) outstanding principal amount of such
Lender’s Revolving Loans and (b) such Lender’s LC Exposure, in each case at
such time.

 

“Revolving Loan” means a Loan made pursuant to Section
2.01.

 

“Rolling Period” means any period of four
consecutive Fiscal Quarters (or, if less, the number of full Fiscal Quarters
subsequent to the Effective Date).

 

“S&P” means Standard & Poor’s Rating
Services, a division of The McGraw-Hill Companies, Inc. and any successor
thereto.

 

“Secured Parties” means the Administrative
Agent, the Collateral Agent, each Lender, the Issuing Lender and each other
person to which any of the Obligations is owed.

 

“Security Agreements” means (a) a Security
Agreement substantially in the form of Exhibit 1.01L among the Company,
the Domestic Subsidiaries from time to time party thereto and the Collateral
Agent for the benefit of the Secured Parties and (b) in connection with the
creation of security interests in the assets of Foreign Subsidiaries, other
security agreements or similar agreements in form and substance satisfactory to
the Collateral Agent, as the same may be amended, modified or supplemented from
time to time in accordance with the provisions hereof.

 

“Security Documents” means the Security
Agreements, the Pledge Agreements, the Guarantee Agreements, the Joinder to,
Ratification and Amendment of Guarantee Agreements, the Joinder to,
Ratification and Amendment of Pledge Agreement, the Joinder to,

 

21

 

Ratification and
Amendment of Security Agreement, the Joinder to, Ratification and Amendment of
the Indemnity Subrogation and Contribution Agreement and each other security
document or pledge agreement delivered pursuant to Section 5.11 or Section
5.13 to secure any of the Obligations or in accordance with applicable
local or foreign law to grant a valid, perfected security interest in any
property, and all UCC or other financing statements or instruments of perfection
required by this Agreement or any security agreement to be filed with respect
to the security interests in property and fixtures created pursuant to the
Security Agreement and any other document or instrument utilized to pledge as
collateral for the Obligations any property of whatever kind or nature.

 

“Statutory Reserve Rate” means a fraction
(expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board to which the
Administrative Agent is subject (a) with respect to the Base CD Rate, for new
negotiable nonpersonal time deposits in dollars of over $100,000 with
maturities approximately equal to three months and (b) with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). 
Such reserve percentages shall include those imposed pursuant to such
Regulation D.  Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve percentage.

 

“Subordinated Indebtedness” means subordinated
debt securities issued by the Company that (a) are subordinated to the
Obligations pursuant to subordination provisions approved by Administrative
Agent, (b) contain covenants, events of default and mandatory redemption,
repayment, prepayment or repurchase requirements approved by Administrative
Agent, (c) do not mature, and are not subject to any scheduled amortization,
redemption, repayment, prepayment or repurchase requirement, prior to the date
one year after the Maturity Date and (d) are not Guaranteed by any of the
Subsidiaries.

 

“subsidiary” means, with respect to any Person
(the “parent”) at any date, any corporation, limited liability company,
partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP
as of such date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which Equity Interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power or, in the case of a partnership, more than 50% of the general
partnership interests are, as of such date, owned, controlled or held, or (b)
that is, as of such date, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.

 

“Subsidiary” means any subsidiary of the
Company.

 

22

 

“Swap Agreement” means any agreement with
respect to any swap, forward, future or derivative transaction or option or
similar agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these transactions; provided
that no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

 

“Taxes” means any and all present or future
taxes, levies, imposts, duties, deductions, charges or withholdings imposed by
any Governmental Authority.

 

“Three-Month Secondary CD Rate” means, for any
day, the secondary market rate for three-month certificates of deposit reported
as being in effect on such day (or, if such day is not a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day) or, if such rate is not
so reported on such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00 a.m., New
York City time, on such day (or, if such day is not a Business Day, on the next
preceding Business Day) by the Administrative Agent from three negotiable
certificate of deposit dealers of recognized standing selected by it.

 

“Total Indebtedness” means, as of any date, the
sum of (a) the aggregate principal amount of Indebtedness of the Company and
its Restricted Subsidiaries outstanding as of such date, in the amount that
would be reflected on a balance sheet prepared as of such date on a
consolidated basis in accordance with GAAP, plus (b) the aggregate principal
amount of Indebtedness of the Company and its Restricted Subsidiaries
outstanding as of such date that is not required to be reflected on a balance
sheet in accordance with GAAP, determined on a consolidated basis; provided
that, (i) for purposes of clause (b) above, the term “Indebtedness” shall not
include contingent obligations of the Company or any Restricted Subsidiary as
an account party in respect of any letter of credit or letter of guaranty
unless such letter of credit or letter of guaranty supports an obligation that
constitutes Indebtedness and (ii) solely for purposes of calculating the Leverage Ratio but not for
any other purpose, all references to Restricted Subsidiaries in this definition
and in the definitions referred to herein shall be deemed references to
Subsidiaries.

 

“Transactions” means the execution, delivery
and performance by the Borrower of this Agreement and the other Loan Documents,
the borrowing of Loans, the use of the proceeds thereof and the issuance of
Letters of Credit hereunder.

 

“Type”, when used in reference to any Loan or
Borrowing, refers to whether the rate of interest on such Loan, or on the Loans
comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate
or the Alternate Base Rate.

 

23

 

“UCC” means the Uniform Commercial Code as from
time to time in effect in the State of Texas or, where applicable as to
specific Collateral, any other relevant state.

 

“Unrestricted Subsidiary” means (i) any Foreign
Subsidiary of the Company that at the time of determination shall have been
designated as an Unrestricted Subsidiary by the Company in the manner provided
below (and shall not subsequently have been designated as a Restricted
Subsidiary), (ii) any subsidiary of an Unrestricted Subsidiary and
(iii) Avex International Corporation. 
The Company may from time to time designate any Foreign Subsidiary (other
than a Foreign Subsidiary that, immediately after such designation, shall hold
any Indebtedness of or Equity Interest in the Company or any Restricted
Subsidiary) as an Unrestricted Subsidiary, and may designate any Unrestricted
Subsidiary as a Restricted Subsidiary so long as, immediately after giving
effect to such designation, no Default shall have occurred and be
continuing.  Any designation by the
Company pursuant to this definition shall be made in an officer’s certificate
delivered to the Administrative Agent and containing a certification that such
designation is in compliance with the terms of this definition.  Notwithstanding the foregoing, no Borrowing
Subsidiary shall at any time be an Unrestricted Subsidiary.  Schedule 1.01 contains a list of the
Foreign Subsidiaries that have been designated by the Company as Unrestricted
Subsidiaries as of the Effective Date.

 

“Wholly Owned Subsidiary” means any Subsidiary
of the Company all the Equity Interests of which (other than directors’
qualifying shares and Equity Interests held by other than the Persons to the
extent such Equity Interests are required by applicable law to be held by a
Person other than the Company or one of its Subsidiaries) is owned by the
Company or one or more Wholly Owned Subsidiaries.

 

“Withdrawal Liability” means liability
to a Multiemployer Plan as a result of a complete or partial withdrawal from
such Multiemployer Plan, as such terms are defined in Part I of Subtitle
E of Title IV of ERISA.

 

Section 1.02           Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall
be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

 

24

 

Section 1.03           Accounting
Terms; GAAP.  Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided that, if the Company notifies the Administrative Agent
that the Company requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Company that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice
is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.

 

ARTICLE II

 

The Credits

 

Section 2.01           Commitments.  Subject to the terms and conditions set forth
herein each Lender agrees to make Revolving Loans to any Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (i) such Lender’s Revolving Exposure exceeding such Lender’s
Commitment or (ii) in the case of any Foreign Borrower, the sum of the
aggregate outstanding principal amount of the Loans of all Foreign Borrowers
exceeding $20,000,000.  Within the
foregoing limits and subject to the terms and conditions set forth herein, any
Borrower may borrow, prepay and reborrow Revolving Loans.

 

Section 2.02           Loans
and Borrowings.  (a) Each Loan
made pursuant to Section 2.01 shall be made as part of a Borrowing
consisting of Loans of the same Type made by the Lenders ratably in accordance
with their respective Commitments.  The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required.

 

(b)           Subject to
Section 2.12, each Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request in accordance herewith.  Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement.

 

(c)           At the
commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $1,000,000. 
At the time that each ABR Borrowing is made, such Borrowing shall be in
an aggregate amount that is an integral multiple of $500,000; provided that an
ABR Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments. 
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of eight Eurodollar
Borrowings outstanding.

 

25

 

(d)           Notwithstanding
any other provision of this Agreement, no Borrower shall be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.

 

Section 2.03           Requests
for Borrowings.  To request a
Borrowing, the applicable Borrower shall notify the Administrative Agent of
such request by telephone (a) in the case of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 10:00
a.m., New York City time, on the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the Borrower.  Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section
2.02:

 

(i)            the aggregate amount of the requested Borrowing;

 

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

 

(iii)          whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;

 

(iv)          in the case
of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term “Interest
Period”;

 

(v)           the Borrower requesting such Borrowing; and

 

(vi)          the location and number of the Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.05(a).

 

If no election as to the Type of Borrowing is
specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative Agent shall advise
each Lender of the details thereof and of the amount of such Lender’s Loan to
be made as part of the requested Borrowing.

 

Section 2.04           Letters of Credit.  (a) General.  Subject to the terms and conditions set forth
herein, the Company may request the issuance of Letters of Credit for its own
account or for the joint and several account of the Company and a Borrowing
Subsidiary in a form reasonably acceptable to the Administrative Agent and the
Issuing Lender, at any time and from time to time during the Availability
Period.  Such Letters of Credit may be
used for the benefit of any Subsidiary and may identify such Subsidiary in the
text thereof so long as either the Company or any Borrowing Subsidiary is the
account party thereon.  In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Company to, or entered into by the Company with, the
Issuing Lender relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.

 

26

 

(b)           Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit
(or the amendment, renewal or extension of an outstanding Letter of Credit),
the Company shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Lender) to the Issuing Lender and the Administrative Agent (reasonably in
advance of the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Lender, the
Company also shall submit a letter of credit application on the Issuing Lender’s
standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Company shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension
(i) the LC Exposure shall not exceed $20,000,000 and (ii) the total Revolving
Exposures shall not exceed the total Commitments.

 

(c)           Expiration
Date.  Each Letter of Credit shall
expire at or prior to the close of business on the earlier of (i) the date one
year after the date of the issuance of such Letter of Credit (or, in the case
of any renewal or extension thereof, one year after such renewal or extension)
and (ii) the date that is five Business Days prior to the Maturity Date; provided,
however, that any Letter of Credit with a one-year tenor may provide for
the renewal thereof for additional one-year periods (which shall in no event
extend beyond the date referred to in clause (ii) above).

 

(d)           Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Lender or the Lenders, the Issuing
Lender hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Lender, a participation in such Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit.  In consideration and
in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Lender, such Lender’s Applicable Percentage of each LC Disbursement
made by the Issuing Lender and not reimbursed by the Company on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Company for any reason.  Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.

 

(e)           Reimbursement.  If the Issuing Lender shall make any LC
Disbursement in respect of a Letter of Credit, the Company shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such
LC Disbursement not later than 12:00

 

27

 

noon, New York City time, on the date that such LC
Disbursement is made, if the Company shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Company prior to such time on such date,
then not later than 12:00 noon, New York City time, on (i) the Business Day
that the Company receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Company receives such notice, if such
notice is not received prior to such time on the day of receipt.  If the Company fails to make such payment
when due, the Administrative Agent shall notify each Lender of the applicable
LC Disbursement, the payment then due from the Company in respect thereof and
such Lender’s Applicable Percentage thereof. 
Promptly following receipt of such notice, each Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Company, in the same manner as provided in Section 2.05 with respect to
Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Lender the amounts so received by it from the Lenders.  Promptly following receipt by the
Administrative Agent of any payment from the Company pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the
Issuing Lender or, to the extent that Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Lender, then to such Lenders and the
Issuing Lender as their interests may appear. 
Any payment made by a Lender pursuant to this paragraph to reimburse the
Issuing Lender for any LC Disbursement shall not constitute a Loan and shall
not relieve the Company of its obligation to reimburse such LC Disbursement.

 

(f)            Obligations
Absolute.  The Company’s obligation
to reimburse LC Disbursements as provided in paragraph (e) of this Section
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability
of any Letter of Credit or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Lender under
a Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Company’s obligations
hereunder.  Neither the Administrative
Agent, the Lenders nor the Issuing Lender, nor any of their Related Parties,
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Lender; provided
that the foregoing shall not be construed to excuse the Issuing Lender from
liability to the Company to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Company to the extent permitted by applicable law) suffered by the Company that
are caused by the Issuing Lender’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of

 

28

 

Credit comply with the terms
thereof.  The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the
part of the Issuing Lender (as finally determined by a court of competent
jurisdiction), the Issuing Lender shall be deemed to have exercised care in
each such determination.  In furtherance
of the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Lender
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

 

(g)           Disbursement
Procedures.  The Issuing Lender shall
promptly notify the Administrative Agent and the Company by telephone
(confirmed by telecopy) of any demand for payment under a Letter of Credit and
whether the Issuing Lender has made or will make an LC Disbursement thereunder;
provided that any failure to give or delay in giving such notice shall
not relieve the Company of its obligation to reimburse the Issuing Lender and
the Lenders with respect to any such LC Disbursement.

 

(h)           Interim
Interest.  If the Issuing Lender
shall make any LC Disbursement, then, unless the Company shall reimburse such
LC Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Company
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Revolving Loans; provided that, if the Company fails to reimburse such
LC Disbursement when due pursuant to paragraph (e) of this Section, then Section
2.11(c) shall apply.  Interest
accrued pursuant to this paragraph shall be for the account of the Issuing
Lender, except that interest accrued on and after the date of payment by any
Lender pursuant to paragraph (e) of this Section to reimburse the Issuing
Lender shall be for the account of such Lender to the extent of such payment.

 

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

 

(j)            Cash
Collateralization.  If any Event of
Default shall occur and be continuing, on the Business Day that the Company
receives notice from the Administrative

 

29

 

Agent or the Required Lenders demanding the deposit of
cash collateral pursuant to this paragraph, the Company shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to the LC Exposure
as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
described in clause (h) or (i) of ARTICLE VII.  The Company also shall deposit cash
collateral pursuant to this paragraph as and to the extent required by Section
2.09(b).  Each such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the obligations of the Company under this Agreement.  The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account.  Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Company’s
risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Lender for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Company for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated
(but subject to the consent of Lenders with LC Exposure representing greater
than 50% of the total LC Exposure), be applied to satisfy other obligations of
the Company under this Agreement.  If the
Company is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Company within three Business
Days after all Events of Default have been cured or waived.  If the Company is required to provide an
amount of cash collateral hereunder pursuant to Section 2.09(b), such
amount (to the extent not applied as aforesaid) shall be returned to the
Company as and to the extent that, after giving effect to such return, the
Company would remain in compliance with Section 2.09(b) and no Default
shall have occurred and be continuing.

 

Section 2.05           Funding
of Borrowings.  (a)
Each Lender shall make each Loan to be made by it hereunder on the proposed
date thereof by wire transfer of immediately available funds by 12:00 noon, New
York City time, to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders.  The Administrative Agent will make such Loans
available to the applicable Borrower by promptly crediting the amounts so
received, in like funds, to an account of the Borrower maintained with the
Administrative Agent in New York City and designated by such Borrower in the
applicable Borrowing Request.

 

(b)           Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with paragraph (a) of this Section and may, in reliance upon such
assumption, make available to the applicable Borrower a corresponding
amount.  In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment
to the

 

30

 

Administrative Agent, at (i) in the case of such
Lender, the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans.  If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.

 

Section 2.06           Interest Elections.  (a) Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request.  Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section.  The Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.

 

(b)           To make an
election pursuant to this Section, the applicable Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. 
Each such telephonic Interest Election Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.

 

(c)           Each
telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:

 

(i)            the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);

 

(ii)           the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;

 

(iii)          whether the resulting Borrowing is to be an ABR Borrowing or
a Eurodollar Borrowing; and

 

(iv)          if the
resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a
Eurodollar Borrowing but does not specify an Interest Period, then the Borrower
shall be deemed to have selected an Interest Period of one month’s duration.

 

31

 

(d)           Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender’s portion of
each resulting Borrowing.

 

(e)           If the
applicable Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein,
at the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing.  Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of the Interest Period applicable thereto.

 

Section 2.07           Termination
and Reduction of Commitments.

 

(a)           Unless
previously terminated, the Commitments shall terminate on the Maturity Date.

 

(b)           The
Company may at any time terminate or from time to time reduce the Commitments;
provided that (A) each reduction of the Commitments shall be in an amount that
is an integral multiple of $5,000,000 and (B) the Company shall not terminate
or reduce the Commitments if, after giving effect to any concurrent prepayment
of the Loans in accordance with Section 2.09, the sum of the Revolving Exposures
would exceed the total Commitments.

 

(c)           The
Company shall notify the Administrative Agent of any election to terminate or
reduce the Commitments under paragraph (b) of this Section at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Company pursuant
to this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Company may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Company (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied.  Any
termination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be
made ratably among the Lenders in accordance with their respective Commitments.

 

Section 2.08           Repayment
of Loans; Evidence of Debt. 
(a) Each Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan of such Lender on the Maturity Date.

 

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

 

32

 

(c)           The
Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrowers to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.

 

(d)           The
entries made in the accounts maintained pursuant to paragraph (b) or (c) of
this Section shall be prima  facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure
of any Lender or the Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligation of any Borrower to
repay the Loans in accordance with the terms of this Agreement.

 

(e)           Any Lender
may request that Loans made by it be evidenced by a promissory note.  In such event, the applicable Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the order
of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent and the
Company.  Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including
after assignment pursuant to Section 9.04) be represented by one or more
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).

 

Section 2.09           Prepayment
of Loans.  (a) Each Borrower shall have the right at any
time and from time to time to prepay any Borrowing in
whole or in part, subject to prior notice in accordance with paragraph (c) of
this Section.

 

(b)           In the
event and on each occasion that the sum of the Revolving Exposures exceeds the
total Commitments, the Borrowers shall prepay Borrowings (or, if no such
Borrowings are outstanding, deposit cash collateral in an account with the
Administrative Agent pursuant to Section 2.04(j)) in an aggregate amount
equal to such excess.

 

(c)           The
Company shall notify the Administrative Agent by telephone (confirmed by
telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment or (ii) in the case of prepayment
of an ABR Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of prepayment. 
Each such notice shall be irrevocable and shall specify the prepayment
date and the principal amount of each Borrowing or portion thereof to be
prepaid; provided that, if a notice of optional prepayment is given in
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.07, then such notice of prepayment may be
revoked if such notice of termination is revoked in accordance with Section
2.07.  Promptly following receipt of
any such notice relating to a Borrowing, the Administrative Agent shall advise
the Lenders of the contents thereof. 
Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02. 
Each prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. 
Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.11.

 

33

 

Section 2.10           Fees.  (a) The Company shall pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Margin on the daily amount of the unused
Commitment of such Lender during the period from and including the Effective
Date to but excluding the date on which such Commitment terminates.  Accrued commitment fees shall be payable in
arrears on the last day of March, June, September and December of each year and
on the date on which the Commitments terminate, commencing on the first such
date to occur after the Effective Date. 
All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).

 

(b)           The
Company shall pay (i) to the Administrative Agent for the account of each
Lender a participation fee with respect to its participations in Letters of
Credit, which shall accrue at the same Applicable Margin used to determine the
interest rate applicable to Eurodollar Loans on the average daily amount of
such Lender’s LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender’s
Commitment terminates and the date on which it ceases to have any LC Exposure,
and (ii) to the Issuing Lender a fronting fee, which shall accrue at the rate
of 0.125% per annum on the average daily amount of the LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of the
date of termination of the Commitments and the date on which there ceases to be
any LC Exposure, as well as the Issuing Lender’s standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. 
Participation fees and fronting fees accrued through and including the
last day of March, June, September and December of each year shall be payable
on the third Business Day following such last day, commencing on the first such
date to occur after the Effective Date; provided that all such fees shall be
payable on the date on which the Commitments terminate and any such fees
accruing after the date on which the Commitments terminate shall be payable on
demand.  Any other fees payable to the
Issuing Lender pursuant to this paragraph shall be payable within 10 days after
demand.  All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

 

(c)           The
Company shall pay to the Administrative Agent, for its own account, fees
payable in the amounts and at the times set forth in the Fee Letter.

 

(d)           All fees
payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent (or to the Issuing Lender, in the case of
fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders.  Fees
paid shall not be refundable under any circumstances.

 

Section 2.11           Interest.  (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Margin.

 

(b)           The Loans
comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable
Margin.

 

34

 

(c)           Notwithstanding
the foregoing, if any principal of or interest on any Loan or any fee or other
amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR
Loans as provided in paragraph (a) of this Section.

 

(d)           Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and, in the case of Loans, upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

 

(e)           All
interest hereunder shall be computed on the basis of a year of 360 days, except
that interest computed by reference to the Alternate Base Rate at times when
the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).  The
applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.

 

Section 2.12           Alternate
Rate of Interest.  If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:

 

(i)            the
Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period; or

 

(ii)           the
Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or maintaining
their Loans included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice
thereof to the Company and the Lenders by telephone or telecopy as promptly as
practicable thereafter and, until the Administrative Agent notifies the Company
and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall
be ineffective, and (ii) if any Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing; provided
that if the circumstances giving rise to such notice affect only one Type of
Borrowings, then the other Type of Borrowings shall be permitted.

 

35

 

Section 2.13           Increased Costs.  (a)  If
any Change in Law shall:

 

(i)            impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate) or the Issuing Lender; or

 

(ii)           impose on any Lender or the Issuing Lender or the London
interbank market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan
(or of maintaining its obligation to make any such Loan) or to increase the
cost to such Lender or the Issuing Lender of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Lender hereunder (whether of
principal, interest or otherwise), then the Company will pay to such Lender or
the Issuing Lender, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Lender, as the case may be, for such
additional costs incurred or reduction suffered.

 

(b)           If any
Lender or the Issuing Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender’s or the Issuing Lender’s capital or on the capital of
such Lender’s or the Issuing Lender’s holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Lender, to
a level below that which such Lender or the Issuing Lender or such Lender’s or
the Issuing Lender’s holding company could have achieved but for such Change in
Law (taking into consideration such Lender’s or the Issuing Lender’s policies
and the policies of such Lender’s or the Issuing Lender’s holding company with
respect to capital adequacy), then from time to time the Company will pay to
such Lender or the Issuing Lender, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Lender or such Lender’s
or the Issuing Lender’s holding company for any such reduction suffered.

 

(c)           A
certificate of a Lender or the Issuing Lender setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Lender or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Company and shall be conclusive absent
manifest error.  The Company shall pay
such Lender or the Issuing Lender, as the case may be, the amount shown as due
on any such certificate within 10 days after receipt thereof.

 

(d)           Failure or
delay on the part of any Lender or the Issuing Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the
Issuing Lender’s right to demand such compensation; provided that the
Company shall not be required to compensate a Lender or the Issuing Lender
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or the Issuing Lender, as the
case may be, notifies the Company of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the Issuing Lender’s
intention to claim

 

36

 

compensation therefor; provided
further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 270-day period referred to above shall
be extended to include the period of retroactive effect thereof.

 

Section 2.14           Break
Funding Payments.  In
the event of (a) the payment of any principal of any Eurodollar Loan other than
on the last day of an Interest Period applicable thereto (including as a result
of an Event of Default), (b) the conversion of any Eurodollar Loan other than
on the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Revolving Loan on the date specified in
any notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.09(c) and is revoked in accordance therewith),
or (d) the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by the applicable
Borrower pursuant to Section 2.17, then, in any such event, the
applicable Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event.  In the case
of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed
to include an amount determined by such Lender to be the excess, if any, of (i)
the amount of interest that would have accrued on the principal amount of such
Loan had such event not occurred, at the Adjusted LIBO Rate that would have
been applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest that would
accrue on such principal amount for such period at the interest rate that such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market.  A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error.  The
applicable Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

Section 2.15           Taxes.  (a)              Any and all payments
by or on account of any obligation of any Loan Party hereunder or under any
other Loan Documents shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if such Loan Party
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Lender (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Loan Party
shall make such deductions and (iii) such Loan Party shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.

 

(b)           In
addition, the Company shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

 

(c)           The
Company shall indemnify the Administrative Agent, each Lender and the Issuing
Lender, within 10 Business Days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative
Agent, such Lender or the Issuing Lender, as the case may be, on or with
respect to any payment by or on account of any obligation of any Loan Party
hereunder or under any other Loan Documents (including

 

37

 

Indemnified Taxes or Other Taxes imposed or asserted
on or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Company by a Lender or the Issuing
Lender, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Lender, shall be conclusive absent manifest error.

 

(d)           As soon as
practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Company shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

 

(e)           Any
Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which a Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.

 

(f)            If the
Administrative Agent, a Lender or the Issuing Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Company or with respect to which any Loan
Party has paid additional amounts pursuant to this Section 2.15, it
shall pay over such refund to the Company (but only to the extent of indemnity
payments made, or additional amounts paid, by the Company under this Section
2.15 with respect to the Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses of the Administrative Agent, such Lender or the
Issuing Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that
the Company, upon the request of the Administrative Agent, such Lender or the
Issuing Lender agrees to repay the amount paid over to the Company (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or the Issuing Lender in
the event the Administrative Agent, such Lender or the Issuing Lender is
required to repay such refund to such Governmental Authority. This Section
shall not be construed to require the Administrative Agent, any Lender or the
Issuing Lender to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Company or any other
Person.

 

Section 2.16           Payments
Generally; Pro Rata Treatment; Sharing of Set-offs.  (a) 
Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.13, 2.14 or 2.15,
or otherwise) prior to 12:00 noon, Houston time, on the date when due, in
immediately available funds, without set-off or counterclaim.  Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments
shall be made to the Administrative Agent at its offices at 712 Main

 

38

 

Street, Houston, Texas, except payments to be made directly to the
Issuing Lender as expressly provided herein and except that payments pursuant
to Section 2.13, 2.14, 2.15 and 9.03 shall be made
directly to the Persons entitled thereto. 
The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof.  If any
payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for
the period of such extension.  All
payments hereunder shall be made in dollars.

 

(b)           If at any
time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed
LC Disbursements then due to such parties.

 

(c)           If any
Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans,
or participations in LC Disbursements resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Revolving Loans,
and participations in LC Disbursements, and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans,
and participations in LC Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans, and participations in LC Disbursements; provided
that (i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by a Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply).  Each Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect
to such participation as fully as if such Lender were a direct creditor of such
Borrower in the amount of such participation.

 

(d)           Unless the
Administrative Agent shall have received notice from a Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the Issuing Lender hereunder that such Borrower will not make
such payment, the Administrative Agent may assume that such Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Lender, as the case may
be, the amount due.  In such event, if
such

 

39

 

Borrower has not in fact made such payment, then each
of the Lenders or the Issuing Lender, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender or Issuing Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date
of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

 

(e)           If any
Lender shall fail to make any payment required to be made by it pursuant to Section
2.04(d), or (e), 2.05(b), 2.16(d) or 9.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are
fully paid.

 

Section 2.17           Mitigation
Obligations; Replacement of Lenders.  (a) If any Lender requests compensation under
Section 2.13, or if a Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.15, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.13 or 2.15, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender.  The Borrowers shall pay all reasonable costs
and expenses incurred by any Lender in connection with any such designation or
assignment.

 

(b)           If any
Lender requests compensation under Section 2.13, or if a Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15, or if
any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in Section
9.04), all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and
if a Commitment is being assigned, the Issuing Lender), which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.13 or payments required to be
made pursuant to Section 2.15, such assignment will result in a reduction in
such compensation or payments.  A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to
apply.

 

40

 

Section 2.18           Increase
of Commitments.  (a)            If no Default, Event
of Default or Material Adverse Effect shall have occurred and be continuing,
the Company may at any time and from time to time request an increase of the
aggregate Commitments by notice to the Administrative Agent in writing of the
amount of such proposed increase (such notice, a “Commitment Increase Notice”);
provided, however, that (i) each such increase shall be at least $10,000,000,
(ii) the cumulative increase in Commitments pursuant to this Section 2.18
shall not exceed $100,000,000, (iii) the Commitment of any Lender may not be
increased without such Lender’s consent, and (iv) the aggregate amount of the
Lenders’ Commitments shall not exceed $200,000,000.  Any such Commitment Increase Notice must
offer each Lender the opportunity to subscribe for its
pro rata share of the increased Commitments. 
If any portion of the increased Commitments is not subscribed for by
such Lenders, the Company may, in its sole discretion, but with the consent of
the Administrative Agent as to any Person that is not at such time a Lender
(which consent shall not be unreasonably withheld or delayed), offer to any
existing Lender or to one or more additional banks or financial institutions
the opportunity to participate in all or a portion of such unsubscribed portion
of the increased Commitments pursuant to paragraph (b) or (c) below, as
applicable.

 

(b)           Any
additional bank or financial institution that the Company selects to offer
participation in the increased Commitments shall become a party to this
Agreement by executing and delivering to the Administrative Agent a New Lender
Agreement setting forth its Commitment, whereupon such bank or financial
institution (a “New Lender”) shall become a Lender for all purposes and
to the same extent as if originally a party hereto and shall be bound by and
entitled to the benefits of this Agreement, and the signature pages hereof shall
be deemed to be amended to add the name of such New Lender and the definition
of Commitment in Section 1.01 hereof shall be deemed amended to increase
the aggregate Commitments of the Lenders by the Commitment of such New Lender, provided
that the Commitment of any New Lender shall be an amount not less than
$5,000,000 (or any remaining portion of the increased Commitments not
subscribed to by the Lenders).

 

(c)           Any Lender
that accepts an offer to it by the Borrower to increase its Commitment pursuant
to this Section 2.18 shall, in each case, execute a Commitment Increase
Agreement with the Company and the Administrative Agent, whereupon such Lender
shall be bound by and entitled to the benefits of this Agreement with respect
to the full amount of its Commitment as so increased, and the definition of
Commitment in Section 1.01 hereof shall be deemed to be amended to
reflect such increase.

 

(d)           The
effectiveness of any New Lender Agreement or Commitment Increase Agreement
shall be contingent upon receipt by the Administrative Agent of such corporate
resolutions of the Company and legal opinions of counsel to the Company as the
Administrative Agent shall reasonably request with respect thereto, in each
case in form and substance reasonably satisfactory to the Administrative Agent.

 

(e)           If any
bank or financial institution becomes a New Lender pursuant to Section
2.18(b) or any Lender’s Commitment is increased pursuant to Section
2.18(c), additional Loans made on or after the effectiveness thereof (the “Re-Allocation
Date”) shall be made pro rata based on their respective Commitments in
effect on or after such Re-Allocation Date (except to the extent that any such
pro rata borrowings would result in any Lender making an aggregate

 

41

 

principal amount of Loans in excess of its Commitment,
in which case such excess amount will be allocated to, and made by, such New
Lender and/or Lenders with such increased Commitments to the extent of, and pro
rata based on, their respective Commitments), and continuations of Loans
outstanding on such Re-Allocation Date shall be effected by repayment of such
Loans on the last day of the Interest Period applicable thereto and the making
of new Loans pro rata based on the respective Commitments in effect on and
after such Re-Allocation Date.

 

(f)            If on any
Re-Allocation Date there is an unpaid principal amount of Eurodollar Loans or
ABR Loans, such Eurodollar Loans or ABR Loans shall remain outstanding with the
respective holders thereof until the expiration of their respective Interest
Periods (unless the Company elects to prepay any thereof in accordance with the
applicable provisions of this Agreement), and interest on and repayments of
such Eurodollar Loans or ABR Loans will be paid thereon to the respective
Lenders holding such Eurodollar Loans or ABR Loans pro rata based on the
respective principal amounts thereof outstanding.

 

Section 2.19           Borrowing
Subsidiaries.  On or after the
Effective Date, the Company may designate any Restricted Subsidiary of the
Company as a Borrowing Subsidiary by delivery to the Administrative Agent of a
Borrowing Subsidiary Agreement executed by such Restricted Subsidiary and the
Company, and upon such delivery such Restricted Subsidiary shall for all purposes
of this Agreement be a Borrowing Subsidiary and a party to this Agreement until
the Company shall have executed and delivered to the Administrative Agent a
Borrowing Subsidiary Termination with respect to such Restricted Subsidiary,
whereupon such Restricted Subsidiary shall cease to be a Borrowing Subsidiary
and a party to this Agreement. 
Notwithstanding the preceding sentence, no Borrowing Subsidiary
Termination will become effective as to any Borrowing Subsidiary at a time when
any principal of or interest on any Revolving Loan to such Borrowing Subsidiary
or any Letter of Credit issued for the account of such Borrowing Subsidiary
shall be outstanding hereunder; provided that such Borrowing Subsidiary
Termination shall be effective to terminate such Borrowing Subsidiary’s right
to make further Borrowings or to request Letters of Credit under this
Agreement.  As soon as practicable upon
receipt of a Borrowing Subsidiary Agreement, the Administrative Agent shall
send a copy thereof to each Lender.

 

ARTICLE III

 

Representations
and Warranties

 

Each Borrower represents and warrants to the Lenders
that:

 

Section 3.01           Organization.  As of the Effective Date, each of the
Borrower and its Subsidiaries, except Avex International Corporation (i) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the requisite power and authority to
conduct its business as it is presently being conducted, and (iii) is duly
qualified or licensed to conduct business and is in good standing in each
jurisdiction listed in Schedule 3.01. 
Each Borrower and its Subsidiaries are qualified and licensed in all
jurisdictions where they are required to be so qualified or licensed to operate
their business and where the failure to so qualify or be in good standing,
individually or in the aggregate, could not reasonably be

 

42

 

expected
to have a Material Adverse Effect.  No
proceeding to dissolve any Loan Party is pending or, to the Borrower’s
knowledge, threatened.

 

Section 3.02           Authorization; Enforceability.  The Transactions to be entered into by each
Loan Party are within such Loan Party’s corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder
action.  This Agreement has been duly
executed and delivered by the Borrowers and constitutes, and each other Loan
Document to which any Loan Party is to be a party, when executed and delivered
by such Loan Party, will constitute, a legal, valid and binding obligation of
the Borrowers or such Loan Party (as the case may be), enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

 

Section 3.03           Governmental Approvals; No Conflicts.  The Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by,
any Governmental Authority, except (i) such as have been obtained or made and
are in full force and effect, (ii) filings necessary to perfect Liens created
under the Loan Documents and (iii) those the failure to obtain or make which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of the
Company or any of its Subsidiaries or any order of any Governmental Authority,
(c) will not violate or result in a default under any indenture, material
agreement or other material instrument binding upon the Company  or any of its Subsidiaries or its assets, or
give rise to a right thereunder to require any payment to be made by the
Company or any of its Subsidiaries and (d) will not result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries,
except Liens created under the Loan Documents.

 

Section 3.04           Financial Statements; No Material Adverse Change.  (a)             The
Company has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the fiscal year ended December 31, 2003, reported on by KPMG LLP,
independent certified public accountants, and (ii) as of and for the fiscal
quarter and the portion of the current fiscal year ended September 30, 2004,
certified by its chief financial officer. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Company and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.

 

(b)           Except
as disclosed in the financial statements referred to above or the notes thereto
and except for the Disclosed Matters, after giving effect to the Transactions,
none of the Company or its Subsidiaries has, as of the Effective Date, any
material contingent liabilities, unusual long-term commitments or unrealized
losses.

 

(c)           Since
December 31, 2003, there has been no material adverse change in the business,
assets, property, condition (financial or otherwise), of the Borrower and its
Subsidiaries taken as a whole.

 

43

 

Section 3.05           Properties.  (a)      Each of the Company and its Subsidiaries
has good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that (i)
do not interfere with its ability to conduct its business as currently
conducted or to utilize such properties for their intended purposes and (ii)
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

(b)           Each
of the Company and its Subsidiaries owns, or is licensed to use, all
trademarks, trade names, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Company and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

Section 3.06           Litigation and Environmental Matters. (a)       There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined,
could reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
any of the Loan Documents or the Transactions.

 

(b)           Except
for the Disclosed Matters and except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, neither the Company nor any of its Subsidiaries (i)
has failed to comply with any Environmental Law or to obtain, maintain or
comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability.

 

(c)           Since
the Effective Date, there has been no change in the status of the Disclosed
Matters that, individually or in the aggregate, has resulted in, or materially
increased the likelihood of, a Material Adverse Effect.

 

Section 3.07           Compliance with Laws and Agreements. Each of the
Company and its Subsidiaries is in compliance with all Laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, material agreements and other material instruments binding upon it
or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.  No Default has occurred and is
continuing.

 

Section 3.08           Intellectual Property.  The Company and each of its Subsidiary owns,
or is licensed to use, all patents, trademarks, trade names, service marks,
copyrights, technology, know-how and processes (together with all applications
therefor and licenses granting rights therein, “Intellectual Property”)
reasonably necessary for the conduct of its business as currently conducted,
except for those the failure to own or be licensed to use which could not
reasonably be expected to result in a Material Adverse Effect.  To the knowledge of the Company, (i) the use
of Intellectual Property by the Company and its Subsidiaries does not infringe
on the rights of any person, (ii) no Intellectual Property of the Company or
any of its

 

44

 

Subsidiaries is being infringed upon by any person, and (iii) no claim
is pending or threatened in writing challenging the use or the validity of any
Intellectual Property of the Company or any Subsidiary, except for
infringements and claims referred to in the foregoing clauses (a), (b) and (c)
that, in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.

 

Section 3.09           Investment and Holding Company Status.  Neither the Company nor any of its
Subsidiaries is (a) an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, or (b) a “holding
company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.

 

Section 3.10           Taxes.  Each
of the Company and its Subsidiaries has timely filed or caused to be filed all
Tax returns and reports required to have been filed and has paid or caused to
be paid all Taxes required to have been paid by it, except (a) any Taxes that
are being contested in good faith by appropriate proceedings and for which the
Company or such Subsidiary, as applicable, has set aside on its books adequate
reserves or (b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.

 

Section 3.11           ERISA.  No
ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse
Effect.  The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed by more than $10,000,000 (inclusive of fees and penalties) the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $25,000,000 (inclusive of fees and
penalties) the fair market value of the assets of all such underfunded Plans.

 

Section 3.12           Labor Matters. 
As of the Effective Date, there are no strikes, lockouts or slowdowns
against the Company or any of its Subsidiaries pending or, to the knowledge of
the Company, threatened.  The hours
worked by and payments made to employees of the Company and its Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other Law
dealing with such matters in any manner that could reasonably be expected to
have a Material Adverse Effect.  All
payments due from the Company or any Subsidiary, or for which any claim may be
made against any of them, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of the Company and its Subsidiaries. 
The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Company or any of its Subsidiaries
is bound.

 

Section 3.13           Insurance.  Schedule
3.13  lists all policies or binders
of fire, liability, worker’s compensation, vehicular or other insurance held by
or for the benefit of the Company or any of its Subsidiaries (specifying the
insurer, the policy number or covering note number with respect to binders) as
of the Effective Date.  As of the
Effective Date, all premiums in respect of such insurance have been paid.  All insurance is in full force and effect, is
with

 

45

 

financially sound and reputable insurers and is in amounts and provides
coverage that are reasonable and customary for Persons engaged in businesses
similar to those conducted by the Company and its Subsidiaries.

 

Section 3.14           Solvency. 
Immediately after the consummation of the Transactions to occur on the
Effective Date, and immediately following the making of each Loan made on the
Effective Date and after giving effect to the application of the proceeds of
such Loans, (a) the fair market value of the assets of each Loan Party
(individually and on a consolidated basis with its subsidiaries) will exceed
its debts and liabilities, subordinate, contingent or otherwise; (b) the
present fair saleable value of the property of each Loan Party (individually
and on a consolidated basis with its subsidiaries) will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities; (c) each Loan Party (individually and on a consolidated
basis with its subsidiaries) will be able to pay its debts and liabilities,
subordinate, contingent or otherwise as they become absolute and mature; and
(d) each Loan Party (individually and on a consolidated basis with its
subsidiaries) will not have unreasonably small capital with which to conduct
its business as such business is now conducted and is proposed to be conducted
following the Effective Date.

 

Section 3.15           Subsidiaries. 
Schedule 3.15 sets forth the name of, and the ownership interest
of the Company in, each Subsidiary of the Company and identifies each
Subsidiary that is a Loan Party and each that is a Foreign Borrower, in each
case as of the Effective Date.  As of
Effective Date, there are no Borrowing Subsidiaries and no Person has executed
a Borrower Supplement or a Foreign Borrower Supplement (as defined in the
Amended and Restated Agreement) or obtained a Loan under Section 2.01 of
the Original Credit Agreement or the Amended and Restated Agreement.

 

Section 3.16           Disclosure. 
The Company has disclosed to the Lenders all agreements, instruments and
corporate or other restrictions to which it or any of its Subsidiaries is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.  None of the reports, financial
statements, certificates or other information furnished by or on behalf of the
Company to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any Loan Document or delivered hereunder (as
modified or supplemented by other information so furnished) contain any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, taken as a whole in the light of the circumstances
under which they were made, not misleading; provided that, with respect
to projected financial information, the Borrowers represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.

 

Section 3.17           Margin Stock. 
Neither the Company nor any Subsidiary is engaged principally, or as one
of its important activities, in the business of extending credit for the
purpose of buying or carrying margin stock (within the meaning of Regulation U
of the Board).  The proceeds of the Loans
and the Letters of Credit will not be used, directly or indirectly,
immediately, incidentally or ultimately, for the purpose of purchasing or
carrying any margin stock or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry margin stock or
for any other purpose which might cause any of the 

 

46

 

Loans or the Letters of Credit under this Agreement to be “purpose
credit” within the meaning of Regulation U or Regulation X of the Board.

 

Section 3.18           Use of Proceeds. 
The proceeds of the Loans shall be used only for working capital and
other general corporate purposes, including without limitation,
Acquisitions.  Each Borrower represents
and warrants to the Lenders and the Administrative Agent that all Loans will be
for business, commercial, investment or other similar purpose and not primarily
for personal, family, household or agricultural use, as such terms are used in
the Texas Finance Code.

 

Section 3.19           No Undisclosed Liabilities.  Except as set forth in Schedule 3.19,
the Company and its Subsidiaries have no liabilities or obligations of any
nature (whether known or unknown, and whether absolute, accrued, contingent or
otherwise) except for (i) liabilities or obligations reflected or reserved
against in the Financial Statements or in the financial statements most
recently delivered by the Borrower pursuant to Section 5.01, (ii)
current liabilities incurred in the ordinary course of business since the date
of such financial statements, (iii) liabilities or obligations that are not
required to be included in financial statements prepared in accordance with
GAAP, and (iv) liabilities or obligations arising under Governmental Approvals
or contracts to which the Company or any of its Subsidiaries is a party or
otherwise subject.

 

ARTICLE IV

 

Conditions

 

Section 4.01           Effective Date. 
The obligations of the Lenders to make Loans and of the Issuing Lender
to issue Letters of Credit hereunder shall not become effective until the date
on which each of the following conditions is satisfied (or waived in accordance
with Section 9.02):

 

(a)           The
Administrative Agent (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent (which
may include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement.

 

(b)           The
Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent, the Collateral Agent, the Issuing Lender and the
Lenders and dated the Effective Date) of Bracewell & Patterson, L.L.P.,
counsel for the Company, in form and substance reasonably satisfactory to the
Administrative Agent and Required Lenders, and covering such other matters relating
to the Loan Parties, the Loan Documents or the Transactions as the Required
Lenders shall reasonably request.  The
Company hereby requests such counsel to deliver such opinion.

 

(c)           The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each Loan Party, the authorization
of the Transactions and any other legal matters relating to the Loan Parties,
this Agreement or the

 

47

 

Transactions, all in form and substance reasonably
satisfactory to the Administrative Agent and its counsel.

 

(d)           The
Administrative Agent shall have received a certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer of the
Company, confirming compliance with the conditions set forth in paragraphs (a)
and (d) of Section 4.02.

 

(e)           The
Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses (including reasonable
legal fees) required to be reimbursed or paid by any Loan Party hereunder or
under any Loan Documents.

 

(f)            All
material governmental and third party approvals necessary or, in the discretion
of the Administrative Agent, advisable in connection with the financing
contemplated hereby and the continuing operations of the Borrowers and its
Subsidiaries shall have been obtained and be in full force and effect.

 

(g)           The
Lenders shall have received (i) audited consolidated financial statements of
the Company and its Subsidiaries for the two most recent fiscal years ended
prior to the Effective Date as to which such financial statements are available
and (ii) satisfactory unaudited interim consolidated financial statements of
the Borrower and its Subsidiaries for each fiscal quarterly period ended
subsequent to the date of the latest financial statements delivered pursuant to
clause (i) of this paragraph as to which such financial statements are
available which financial statements shall not be materially inconsistent with
the financial statements or forecasts previously provided.

 

(h)           The
Administrative Agent shall have received each of the Security Documents and
they shall constitute satisfactory security documentation to create first
priority security interests in the Collateral (free and clear of all Liens,
other than Liens permitted by Section 6.02).

 

(i)            The
Collateral and Guarantee Requirement shall have been satisfied.

 

The Administrative Agent shall notify the Company and
the Lenders of the Effective Date, and such notice shall be conclusive and
binding.  Notwithstanding the foregoing,
the obligations of the Lenders to make Loans and of the Issuing Lender to issue
Letters of Credit hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 9.02)
at or prior to 3:00 p.m., Houston time, on January 20, 2005 (and, in the
event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).

 

Section 4.02           Each Credit Event. 
The obligation of each Lender to make a Loan on the occasion of any
Borrowing, and of the Issuing Lender to issue, amend, renew or extend any
Letter of Credit, is subject to the satisfaction of the following conditions:

 

(a)           The
representations and warranties of each Loan Party set forth in this Agreement
or any other Loan Document shall be deemed to have been made as a part of said
request for a Borrowing and shall be true and correct in all material respects
on and as of the date

 

48

 

of such Borrowing or the date of issuance, amendment,
renewal or extension of such Letter of Credit, as applicable except to the
extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such earlier
date.

 

(b)           No
Material Adverse Effect shall have occurred since the date of the most recent
Borrowing by the Company.

 

(c)           The
Administrative Agent shall have received a request for a Borrowing as required
by Section 2.03 or the Issuing Lender and the Administrative Agent shall
have received a request for the issuance of a Letter of Credit as required by Section
2.04(b);

 

(d)           At
the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

 

Each Borrowing and each issuance, amendment, renewal
or extension of a Letter of Credit shall be deemed to constitute a
representation and warranty by the Borrowers on the date thereof as to the
matters specified in paragraphs (a), (b), (c) and (d) of this Section.

 

Section 4.03           Initial Credit Event for each Borrowing Subsidiary.
 The obligation of the Lenders to make
Loans to any Borrowing Subsidiary and the obligations of the Issuing Lender to
issue Letters of Credit for the account of any Borrowing Subsidiary are subject
to the satisfaction of the following conditions:

 

(a)           The
Administrative Agent (or its counsel) shall have received a Borrowing
Subsidiary Agreement duly executed by such Borrowing Subsidiary and the other
parties thereto.

 

(b)           The
Administrative Agent shall have received a favorable written opinion of counsel
for such Borrowing Subsidiary, in form and substance reasonably satisfactory to
Administrative Agent and Required Lenders, and covering such other matters
relating to such Borrowing Subsidiary and its Borrowing Subsidiary Agreement as
the Administrative Agent shall reasonably request.

 

(c)           The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of such Borrowing Subsidiary, the
authorization of the Transactions insofar as they relate to such Borrowing
Subsidiary, the satisfaction of the Collateral and Guarantee Requirement
insofar as it relates to the assets of such Borrowing Subsidiary and any other
legal matters relating to such Borrowing Subsidiary, its Borrowing Subsidiary
Agreement or such Transactions, all in form and substance reasonably satisfactory
to the Administrative Agent and its counsel.

 

 

ARTICLE V

 

Affirmative
Covenants

 

Until the Commitments have expired or been terminated
and the principal of and interest on each Loan and all fees payable hereunder
shall have been paid in full and all Letters

 

49

 

of Credit shall have
expired or terminated and all LC Disbursements shall have been reimbursed, the
Borrower covenants and agrees with the Lenders that:

 

Section 5.01           Financial Statements and Other Information.  The Company will furnish to the
Administrative Agent and each Lender:

 

(a)           within
90 days after the end of each fiscal year of the Company, the audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, of the
Company and the consolidated Subsidiaries as of such year, all reported on by
KPMG LLP or other independent public accountants of recognized national
standing (without a “going concern” or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the
Company and the consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied;

 

(b)           within
45 days after the end of each of the first three fiscal quarters of each fiscal
year of the Company, the consolidated balance sheets and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth
in each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, of the Company and the consolidated Subsidiaries and
Company and the Restricted Subsidiaries as of such year, all certified by one
of the Company’s Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of the Company and
its consolidated Subsidiaries or the Company on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;

 

(c)           concurrently
with any delivery of financial statements under clause (a) or (b) above, a
certificate of a Financial Officer of the Company (i) certifying as to whether
a Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations demonstrating compliance with Section
6.15, 6.16, 6.17, and 6.18, (iii) setting forth
in a reasonably detailed schedule, a comparison of the consolidated results
under clause (a) or (b) above with the financial condition and results of
operations of the Company and its consolidated Restricted Subsidiaries, and
(iv) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in Section
3.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;

 

(d)           concurrently
with any delivery of financial statements under clause (a) above, any
management letter delivered to the management of the Company by the accounting
firm that reported on such financial statements;

 

(e)           promptly
after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Company or any
Subsidiary

 

50

 

with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Company to its shareholders generally, as the case may be;

 

(f)            promptly
following any request therefor, such other information regarding the
operations, business affairs and financial condition of the Company or any
Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender may reasonably request;

 

(g)           within
120 days after the end of each fiscal year, a summary description of the
insurance policies of the Company and its Subsidiaries; and

 

(h)           promptly
following any request thereof, all information and/or documentation necessary
to comply with the Act or for Administrative Agent to confirm compliance with
the Act.

 

Section 5.02           Notices of Material Events.  The Company will furnish to the
Administrative Agent and each Lender prompt and, in any event, within five
Business Days, written notice of the following:

 

(a)           the
occurrence of any Default;

 

(b)           the
filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Company or any
Affiliate thereof that, if adversely determined, could reasonably be expected
to result in a Material Adverse Effect or that in any manner questions the
validity of the Loan Documents;

 

(c)           the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
$25,000,000 (inclusive of fees and penalties);

 

(d)           the
occurrence of any event or any other development by which the Company or any of
its Subsidiaries (i) fails to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives notice of any claim with respect to any
Environmental Liability or (iv) becomes aware of any basis for any
Environmental Liability and in each of the preceding clauses, which
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect; and

 

(e)           any
other development (including the termination of any material contract) that
results in, or could reasonably be expected to result in, a Material Adverse
Effect.

 

Each notice delivered under this Section shall be
accompanied by a statement of a Financial Officer or other executive officer of
the Company setting forth the details of the event or development requiring
such notice and any action taken or proposed to be taken with respect thereto.

 

51

 

Section 5.03           Information Regarding Collateral.  The Company will furnish to the
Administrative Agent prompt written notice of any change (i) in any Loan Party’s
corporate name or in any trade name used to identify it in the conduct of its
business or in the ownership of its properties, (ii) in any Loan Party’s
identity or corporate structure or (iii) in any Loan Party’s Federal Taxpayer
Identification Number and, at the time of the delivery of the financial
statements required under Section 5.01(a), the Company will furnish to
the Administrative Agent written notice of (i) any change in the location of
any office in which any Loan Party maintains books or records relating to
Collateral owned by it and (ii) any new office or facility at which Collateral
owned by a Loan Party is located.  The
Company agrees not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the UCC or otherwise that are
required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral.  The Company also
agrees promptly to notify the Administrative Agent if any material portion of
the Collateral is damaged or destroyed.

 

Section 5.04           Existence; Conduct of Business.  The Company will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and trade
names material to the conduct of its business, except where the failure to do
so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect; provided that the foregoing shall
not prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 6.03.

 

Section 5.05           Payment of Obligations.  The Company will, and will cause each of its
Subsidiaries to, pay its Indebtedness and other obligations, including Tax
liabilities, before the same shall become delinquent or in default, except
where (a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Company or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP, (c)
such contest effectively suspends collection of the contested obligation and
enforcement of any Lien securing such obligation and (d) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.

 

Section 5.06           Maintenance of Properties; Insurance.  The Company will, and will cause each of its
Subsidiaries to keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

Section 5.07           Insurance. 
The Company will, and will cause each of its Subsidiaries to, maintain,
with financially sound and reputable insurance companies (a) insurance in such
amounts (with no greater risk retention) and against such risks as are
customarily maintained by companies of established repute engaged in the same
or similar businesses operating in the same or similar locations and (b) all
insurance required to be maintained pursuant to the Security Documents.  The Company will furnish to the Lenders, upon
request of the Administrative Agent, information in reasonable detail as to the
insurance so maintained.

 

52

 

Section 5.08           Books and Records; Inspection and Audit Rights.  The Company will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which full, true
and correct entries are made of all material dealings and transactions in
relation to its business and activities. 
The Company will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.

 

Section 5.09           Compliance with Laws.  The Company will, and will cause each of its
Subsidiaries to, comply with all Laws (including Environmental Laws) and Orders
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

Section 5.10           Use of Proceeds and Letters of Credit.  The proceeds of the Loans will be used only
for working capital and other general corporate purposes, including, without
limitation, Acquisitions.  No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.

 

Section 5.11           Additional Subsidiaries.  If any additional Subsidiary is formed or
acquired after the Effective Date, the Company will, no more than thirty days
after such Subsidiary is formed or acquired, notify the Administrative Agent
and the Lenders thereof and cause the Collateral and Guarantee Requirement to
be satisfied (to the extent applicable) with respect to such Subsidiary and
with respect to any Equity Interest in or Indebtedness of such Subsidiary owned
or to be owned by or on behalf of the Company or any other Subsidiary.

 

Section 5.12           Ownership of Subsidiaries.  (a)          The
Company will, and will cause each of the Subsidiaries to, ensure that all
Equity Interests in Domestic Subsidiaries are owned directly or indirectly at
all times only by the Company or one or more other Domestic Subsidiaries and
that all the Equity Interests of such latter Domestic Subsidiaries are pledged
to secure the Obligations.

 

(b)           As
promptly as practicable, and in any event within 30 days after the Effective
Date, the Company will, and will cause each of its Subsidiaries to, ensure that
any Foreign Subsidiary (including each Foreign Subsidiary acquired in
connection with an Acquisition), is owned directly or indirectly at all times
by a Qualified Foreign Subsidiary Holding Company and that all the Equity
Interests of such Qualified Foreign Subsidiary Holding Company are pledged to
secure the Obligations.

 

Section 5.13           Further Assurances. 
The Company will, and will cause each Subsidiary to, at its own cost and
expense, execute, acknowledge and deliver any and all further documents,
financing statements, agreements and instruments and take all such further
actions,  (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust,
and other documents) which may be required under any applicable Law, or which
may from time to time be reasonably necessary or as the Required Lenders may
from time to time reasonably request in order to carry out the intent and
purpose of the Loan Documents and the

 

53

 

Transactions, including all such actions to establish, preserve, protect
and perfect the estate, right, title and interest of the Lenders, or the
Administrative Agent for the benefit of the Lenders, to the Collateral
(including Collateral acquired after the date hereof) and preserve, protect and
perfect first priority Liens (subject to Liens permitted by Section 6.02)
in favor of the Lenders, or the Administrative Agent for the benefit of the
Lenders, on any and all assets of the Company and the Subsidiaries, now owned
or hereafter acquired, that are not Collateral on the date hereof.

 

ARTICLE VI

 

Negative Covenants

 

Until the Commitments have expired or terminated and
the principal of and interest on each Loan and all fees  payable hereunder shall have been paid in
full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each Borrower covenants and agrees
with the Lenders that:

 

Section 6.01           Indebtedness. 
The Company will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Indebtedness, except:

 

(a)           the
Obligations;

 

(b)           Subordinated
Indebtedness;

 

(c)           Indebtedness
existing on the Effective Date and set forth in Schedule 6.01 and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof or shorten the maturity or
the weighted average life thereof;

 

(d)           Intercompany
Indebtedness (to the extent permitted by Section 6.04);

 

(e)           Guarantees
by the Company or any Subsidiary of Indebtedness of any Restricted Subsidiary
which Indebtedness is permitted under this Section 6.01, provided, in no event
shall the Company or any Subsidiary guarantee the Indebtedness of any
Unrestricted Subsidiary or any Subsidiary that is not a Loan Party hereunder.

 

(f)            Indebtedness
of the Company or any Domestic Subsidiary or any Foreign Borrower incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations, and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof or result in an earlier maturity date or decreased
weighted average life thereof; provided that (i) such Indebtedness is
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (f) shall not exceed $100,000,000 at any
time outstanding;

 

(g)           Indebtedness
of any Person that becomes a Domestic Subsidiary or a Foreign Borrower after
the Effective Date; provided that (i) such Indebtedness exists at the
time such Person becomes a Domestic Subsidiary or a Foreign Borrower, as the
case may be, and is

 

54

 

not created in contemplation of or in connection with
such Person becoming a Domestic Subsidiary or a Foreign Borrower and (ii) the
aggregate principal amount of Indebtedness permitted by this clause (g) shall
not exceed $25,000,000 at any time outstanding;

 

(h)           Indebtedness
of Unrestricted Subsidiaries for which neither the Company nor any Restricted
Subsidiary shall be liable as obligor, under any Guarantee or otherwise;

 

(i)            other
unsecured Indebtedness in an aggregate principal amount not exceeding
$50,000,000 at any time outstanding; and

 

(j)            other
secured Indebtedness incurred by Foreign Subsidiaries that are Restricted
Subsidiaries for working capital purposes in an aggregate principal amount not
exceeding $25,000,000 at any time outstanding.

 

Section 6.02           Liens.  The
Company will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:

 

(a)           Liens
created under the Loan Documents;

 

(b)           Permitted
Encumbrances;

 

(c)           any
Lien on any property or asset of the Company or any Subsidiary existing on the
Effective Date and set forth in Schedule 6.02; provided that (i)
such Lien shall not apply to any other property or asset of the Company or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the Effective Date, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;

 

(d)           any
Lien existing on any property or asset prior to the acquisition thereof by the
Company or any Subsidiary or existing on any property or asset of any Person
that is merged or consolidated with or into the Company or any of its
Subsidiaries or becomes a Subsidiary after the Effective Date prior to the time
such Person is so merged or consolidated or becomes a Subsidiary; provided that
(i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such
Lien shall not apply to any other property or assets of the Company or any
Subsidiary and (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;

 

(e)           Liens
on fixed or capital assets acquired, constructed or improved by the Company or
any Subsidiary, including Liens deemed to exist in respect of assets subject to
Capital Lease Obligations; provided that (i) such security interests
secure Indebtedness permitted by clause (f) of Section 6.01, (ii) such
security interests and the Indebtedness secured thereby are incurred prior to
or within 90 days after such acquisition or the completion of such construction
or improvement, (iii) the Indebtedness secured thereby does not exceed the cost
of acquiring, constructing or improving such fixed or capital assets and (iv)
such security interests shall not apply to any other property or assets of the
Company or any Subsidiary;

 

55

 

(f)            Liens
securing Intercompany Indebtedness permitted under Section 6.01(d);

 

(g)           Extensions,
renewals or replacements of any Lien referred to in clauses (c), (d) and
(e); provided that the principal amount of the Indebtedness or
obligations secured thereby is not increased and that any such extension,
renewal or replacement is limited to the assets originally encumbered thereby;

 

(h)           Liens
on the assets of Unrestricted Subsidiaries securing Indebtedness permitted
under Section 6.01(h);

 

(i)            Liens
securing Indebtedness permitted under Section 6.01(j); and

 

(j)            additional
Liens incurred by the Company and its Subsidiaries so long as the value of the
property subject to such Liens, and the Indebtedness and other obligations
secured thereby do not exceed $3,000,000 at any time.

 

Section 6.03           Fundamental Changes.  (a) The
Company will not, and will not permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all of its
assets, or all or substantially all of the Equity Interests of any of its
Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default shall have occurred and be continuing

 

(i)            any
Person may merge into the Company in a transaction in which the Company is the
surviving corporation,

 

(ii)           any
Person may merge with or into any Subsidiary in a transaction in which the
surviving entity is a Subsidiary; provided that (A) if any party to such
merger is a Loan Party the surviving Person must also be a Loan Party and must
succeed to all the obligations of such Loan Party under the Loan Documents and
(B) if any party to such merger is a Restricted Subsidiary the surviving Person
shall also be a Restricted Subsidiary unless designated as an Unrestricted
Subsidiary pursuant to the definition of such term; and

 

(iii)          any
Subsidiary (other than a Loan Party) may liquidate or dissolve if the Company
determines in good faith that such liquidation or dissolution is in the best
interests of the Company and is not materially disadvantageous to the Lenders;

 

provided that any such merger
involving a Person that is not a Wholly Owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.04.

 

(b)           The
Company will not, and will not permit any of its Subsidiaries to, engage to any
material extent in any business other than businesses of the type conducted by
the Company and its Subsidiaries on the Effective Date and businesses
reasonably related thereto.

 

56

 

Section 6.04           Investments, Loans, Advances, Guarantees and
Acquisitions.  The Company will not,
and will not permit any of its Subsidiaries to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a Wholly Owned
Subsidiary prior to such merger) any Equity Interests in or evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person (all of the foregoing
being collectively called “Investments”), or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any
other Person (other than inventory acquired in the ordinary course of business)
constituting a business unit or are substantial in relation to the consolidated
assets of the Company, except:

 

(a)           Permitted
Investments;

 

(b)           Investments
existing on the Effective Date and set forth on Schedule 6.04;

 

(c)           Investments
existing on the Effective Date in Subsidiaries;

 

(d)           additional
Investments in Persons that, immediately prior to such investments, are
Restricted Subsidiaries;

 

(e)           Investments
by Unrestricted Subsidiaries in Persons that, immediately prior to such
investments, are Unrestricted Subsidiaries;

 

(f)            Investments
consisting of all the issued and outstanding capital stock, or all or
substantially all the assets, of Persons engaged in lines of business permitted
under Section 6.03(b); provided that (A) no Default shall
have occurred and be continuing at the time any such Investment is made or would
occur as a result thereof and (B) the cash consideration payable for all such
Investments made under this clause (g) after the Effective Date in the capital
stock or assets of other Persons shall not exceed $100,000,000 in the
aggregate;

 

(g)           Guarantees
constituting Indebtedness permitted by Section 6.01; provided
that a Subsidiary shall not Guarantee any Subordinated Indebtedness;

 

(h)           investments
received in connection with the bankruptcy or reorganization of, or settlement
of delinquent accounts and disputes with, customers and suppliers, in each case
in the ordinary course of business;

 

(i)            accounts
receivable arising in the ordinary course of business;

 

(j)            investments
and loans held by any Subsidiary at the time it becomes a Subsidiary in a
transaction permitted by this Section;

 

(k)           reasonable
advances to officers and employees of the Company and any Subsidiary for travel
arising in the ordinary course of business;

 

(l)            loans
to officers and employees of the Company or any Subsidiary, not to exceed
$100,000 in the aggregate at any one time outstanding;

 

57

 

(m)          promissory
notes and other noncash consideration received by the Company and its
Subsidiaries in connection with any asset sale permitted hereunder;

 

(n)           advances
in the form of prepayments of expenses, so long as such expenses were incurred
in the ordinary course of business and are paid in accordance with customary
trade terms of the Company or any of its Subsidiaries;

 

(o)           Guarantees
by the Company of obligations of Restricted Subsidiaries incurred in the
ordinary course of business and not constituting Indebtedness; and

 

(p)           other
investments, loans or advances made by the Company, any Domestic Subsidiary or
any Foreign Borrower at times when no Default or Event of Default shall have
occurred and be continuing or would occur as a result thereof and that, taken
together with all other investments made after the Effective Date under this
clause (p) would not exceed $10,000,000.

 

Section 6.05           Asset Sales, etc. 
The Company will not, and will not permit any of its Restricted
Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest, except:

 

(a)           sales
of inventory, used or surplus equipment and Permitted Investments in the
ordinary course of business or as expressly permitted elsewhere in this
Agreement;

 

(b)           sales,
transfers and dispositions to the Company or a Restricted Subsidiary; and

 

(c)           sales,
transfers and other dispositions of other assets (other than Equity Interests
in Subsidiaries); provided that (x) the aggregate proceeds from such sales,
transfers and other dispositions during any fiscal year shall not exceed the
greater of (A) 10% of Consolidated Net Tangible Assets as of the beginning of such
fiscal year and (B) 10% of Consolidated Net Income of the Company (excluding
Unrestricted Subsidiaries) for such fiscal year and (y) not more than
$2,000,000 of noncash proceeds shall be received from such sales, transfers and
other dispositions during any fiscal year.

 

Section 6.06           Sale and Leaseback Transactions.  The Company will not, and will not permit any
of its Restricted Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred.

 

Section 6.07           Swap Agreements. 
The Company will not, and will not permit any of its Subsidiaries to,
enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge
or mitigate risks to which the Company or any Subsidiary has actual exposure (other
than those in respect of Equity Interests of the Company or any of its
Subsidiaries), and (b) Swap Agreements entered into in order to effectively
cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Company or any Subsidiary.

 

58

 

Section 6.08           Restricted Payments; Certain Payments in Respect of
Indebtedness.  (a)      The
Company will not, and will not permit any Restricted Subsidiary to, declare or
make, or agree to make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except that (i)
Restricted Subsidiaries may declare and pay dividends ratably with respect to
their capital stock and (ii) if no Default or Event of Default has occurred and
is continuing or would occur as a result thereof, the Company may make any
Restricted Payment that, taken together with all other Restricted Payments made
after the Effective Date, would not exceed the sum of $100,000,000 and 50% of
Consolidated Net Income of the Company for the period (treated as one
accounting period) commencing January 1, 2005, and ending at the most recent
fiscal quarter end for which financial statements shall have been delivered
under Section 5.01(a) or (b).

 

(b)           The
Company will not, and will not permit any Restricted Subsidiary to, make or
agree to make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of the
principal of or interest on any Subordinated Indebtedness, or any payment or
other distribution (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, defeasance, cancellation or termination of any Subordinated
Indebtedness, except scheduled and other mandatory payments of interest and
principal in respect of Subordinated Indebtedness; provided that no payment
shall be made in respect of Subordinated Indebtedness that is prohibited by the
subordination provisions applicable to such Subordinated Indebtedness.

 

Section 6.09           Transactions with Affiliates.  The Company will not, and will not permit any
of its Subsidiaries to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates, except
(a) in the ordinary course of business at prices and on terms and conditions
not less favorable to the Company or such Subsidiary than could be obtained on
an arm’s-length basis from unrelated third parties, (b) transactions between or
among the Company and its Restricted Subsidiaries not involving any other
Affiliate, (c) transactions among or between Unrestricted Subsidiaries and (d)
any Restricted Payment permitted by Section 6.08.

 

Section 6.10           Restrictive Agreements.  The Company will not, and will not permit any
Restricted Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Company or any Restricted
Subsidiary to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Restricted Subsidiary (i) to pay
dividends or other distributions with respect to any shares of its capital
stock, (ii) to make or repay loans or advances to the Company or any other
Restricted Subsidiary, (iii) to Guarantee Indebtedness of the Company or any
other Subsidiary, or (iv) sell, lease or transfer any of its Property to the
Company or any other Restricted Subsidiary; provided that (i) the foregoing
shall not apply to restrictions and conditions imposed by law or by this
Agreement, (ii) the foregoing shall not apply to restrictions and conditions
existing on the Effective Date identified on Schedule 6.10 (but shall
apply to any extension or renewal of, or any amendment or modification
expanding the scope of, any such restriction or condition), (iii) the foregoing
shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Restricted Subsidiary pending such sale,
provided such restrictions and conditions apply only to the

 

59

 

Restricted Subsidiary that is to be sold and such sale is permitted
hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.

 

Section 6.11           Change in Fiscal Year.  The Company will not change the end if its
fiscal year to a date other than December 31.

 

Section 6.12           Constitutive Documents.  The Company will not, and will not permit any
Subsidiary to, amend it charter or by-laws or other constitutive documents in
any manner which could adversely and materially affect the rights of the
Lenders under this Agreement or their ability to enforce the same, except as
otherwise permitted pursuant to Sections 6.03 or 6.04.

 

Section 6.13           Sales and Assignments of Income, Revenues and
Receivables.  The Company will not,
and will not permit any Restricted Subsidiary to, sell or assign, with or without
recourse, for discount or otherwise, any income or revenues, including notes
and accounts receivable.

 

Section 6.14           Amendment of Material Documents.  The Company will not, and will not permit any
Subsidiary to, amend, modify or waive in any respect materially adverse to the
Company or to the rights or interests of the Lenders any of its rights under
any document evidencing or governing Subordinated Indebtedness.

 

Section 6.15           Adjusted Leverage Ratio; Leverage Ratio.  (a)  The Company will not permit
the Adjusted Leverage Ratio as of any date to exceed the ratio of 2.50 to 1.00.

 

(b)           The
Company will not permit the Leverage Ratio as of any date to exceed the ratio
of 2.50 to 1.00.

 

Section 6.16           Fixed Charge Coverage Ratio.  The Company will not permit the Fixed Charge
Coverage Ratio for any Rolling Period ending after the Effective Date to be
less than the ratio of 1.20 to 1.00.

 

Section 6.17           Current Ratio. 
The Company will not permit the Current Ratio at any time to be less
than 1.50 to 1.00.

 

Section 6.18           Minimum Tangible Net Worth.  The Company will not permit Consolidated
Tangible Net Worth (excluding Unrestricted Subsidiaries) as of any date to be
less than the sum of (a) $400,000,000 plus (b) 50% of Consolidated Net Income
of the Company and its Restricted Subsidiaries (but only to the extent such
amount is positive) for fiscal quarters ended after September 30, 2004
plus (z) 75% of the aggregate Net Cash Proceeds (cash or non-cash) from the
issuance by the Company or any Restricted Subsidiary of Equity Interests
subsequent to the Effective Date.

 

60

 

ARTICLE VII

 

Events of Default
and Remedies

 

Section 7.01           Events of Default. 
If any of the following events (“Events of Default”) shall occur:

 

(a)           any
Borrower shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any LC Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

 

(b)           any
Borrower shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Section 7.01)
payable under this Agreement or the other Loan Documents, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of five days;

 

(c)           any
representation or warranty made or deemed made by or on behalf of the Company
or any Subsidiary in or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder, or in any report, certificate,
financial statement, Loan Document or other document furnished pursuant to or
in connection with this Agreement or any amendment or modification hereof or
waiver hereunder, shall prove to have been incorrect in any material respect
when made or deemed made;

 

(d)           the
Company or any Subsidiary shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.04 (with
respect to the existence of any Borrower) or 5.10 or in Article VI;

 

(e)           any
Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in clause
(a), (b) or (d) of this Article) or in any other Loan Document, and such failure
shall continue unremedied for a period of 30 days after the earlier of (i) the
Company’s obtaining knowledge thereof or (ii) written notice thereof from the
Administrative Agent to the Company (which notice will be given at the request
of any Lender);

 

(f)            the
Company or any Subsidiary shall fail to make any payment (whether of principal
or interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable after giving effect to any
applicable grace period;

 

(g)           any
event or condition occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits (with or without
the giving of notice, the lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity; provided
that this clause (g) shall not apply to secured Indebtedness that becomes due
as a result of the voluntary sale or transfer of the property or assets
securing such Indebtedness;

 

61

 

(h)           an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Company or any Subsidiary or its debts, or of a substantial part of its assets,
under any  Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

 

(i)            the
Company or any Subsidiary shall (i) voluntarily commence any proceeding or file
any petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;

 

(j)            the
Company or any Subsidiary shall become unable, admit in writing its inability
or fail generally to pay its debts as they become due;

 

(k)           one
or more judgments for the payment of money in an aggregate amount in excess of
$25,000,000 shall be rendered against the Company, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of the Company or any Subsidiary to enforce any such judgment;

 

(l)            an
ERISA Event shall have occurred that, in the opinion of the Required Lenders,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Company and its
Subsidiaries in an aggregate amount exceeding (i) $10,000,000 (inclusive of
fees and penalties) in any year or (ii) $25,000,000 (inclusive of fees and
penalties) for all periods;

 

(m)          any
Loan Document or any material provision thereof shall at any time cease to be
in full force and effect, or a proceeding shall be commenced by any Loan Party
or any other Person seeking to establish the invalidity or unenforceability
thereof (exclusive of questions of interpretation thereof), or any Loan Party
shall repudiate or deny that it has any liability or obligation for the payment
of principal or interest or other obligations purported to be created under any
Loan Document;

 

(n)           any
Lien created by any of the Security Documents shall at any time fail to
constitute a valid and (to the extent required by the Security Documents)
perfected Lien on any material portion of the Collateral purported to be
subject thereto, securing the obligations

 

62

 

purported to be secured thereby, with the priority
required by the Loan Documents, or any Loan Party shall so assert in writing;
or

 

(o)           a
Change in Control shall occur;

 

then, and in every such event (other than an event
with respect to the Company described in clause (h) or (i) of this Article),
and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Company, take any or all of the following actions, at the same or
different times:  (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrowers accrued hereunder,
shall become  due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers; and in case of any event with
respect to the Company described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers, and (iii) exercise any or all
of the remedies available to it under the Security Documents, at law or in
equity.

 

Section 7.02           Cash Collateral. 
Upon the occurrence and during the continuance of any Event of Default,
the Company shall, if requested by the Administrative Agent or the Required
Lenders, pay to the Administrative Agent an amount in immediately available
funds (which funds shall be held as collateral pursuant to arrangements
satisfactory to the Administrative Agent) equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon under all Letters of Credit
then outstanding at such time; provided that, upon the occurrence of any Event
of Default specified in Section 7.01(h) or (i), the Company shall
pay such amount forthwith without any notice or demand or any other act by the
Administrative Agent or the Lenders.

 

ARTICLE VIII

 

The Administrative
Agent

 

Each of the Lenders and the Issuing Lender hereby
irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof,
together with such actions and powers as are reasonably incidental thereto.

 

The bank serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative
Agent, and such bank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Company or any Subsidiary
or other Affiliate thereof as if it were not the Administrative Agent
hereunder.

 

63

 

The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein.  Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent
is required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the Company or any of its Subsidiaries that is communicated to or obtained by
the bank serving as Administrative Agent or any of its Affiliates in any
capacity.  The Administrative Agent shall
not be liable for any action taken or not taken by it with the consent or at
the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or willful
misconduct.  The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until written
notice thereof is given to the Administrative Agent by the Company or a Lender,
and the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement, (ii) the contents of any certificate,
report or other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness
or genuineness of this Agreement or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV
or elsewhere herein, other than to confirm receipt of items expressly required
to be delivered to the Administrative Agent.

 

The Administrative Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon
any statement made to it orally or by telephone and believed by it to be made
by the proper Person, and shall not incur any liability for relying
thereon.  The Administrative Agent may
consult with legal counsel (who may be counsel for the Company), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.

 

The Administrative Agent may perform any and all its
duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. 
The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the Administrative Agent and
any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.

 

64

 

Subject to the appointment and acceptance of a
successor Administrative Agent as provided in this paragraph, the
Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Lender and the Company.  Upon any
such resignation, the Required Lenders shall have the right, in consultation
with the Company, to appoint a successor. 
If no successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Lender,
appoint a successor Administrative Agent which shall be a bank with an office
in New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder.  The fees payable by the Company to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Company and such
successor.  After the Administrative
Agent’s resignation hereunder, the provisions of this Article and Section
9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.

 

Each Lender acknowledges that it has, independently
and without reliance upon the Administrative Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.

 

It is expressly understood that the Co-Documentation
Agent shall not have any duties or responsibilities under this Agreement.

 

ARTICLE IX

 

Miscellaneous

 

Section 9.01           Notices.  (a)
 Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as
follows:

 

65

 

(i)            if
to the Company or any Borrowing Subsidiary, to it, or to it in care of the
Company:

 

Benchmark
Electronics, Inc.

3000 Technology
Drive

Angleton, Texas

Attention:  Gayla J. Delly

Telecopy No.: [                       ]

Telephone No.:
979-849-6550 (ext. 1304)

 

(ii)           if
to the Administrative Agent, to

 

JPMorgan Chase
Bank, N.A.

712 Main Street

Houston, Texas
77002

Attention:  Robert Mendoza

Telecopy No.:
713-216-6004

Telephone No.:
713-216-5831

 

with a copy to:

 

JPMorgan Chase,
N.A.

1111 Fannin, 10th
Floor

Houston,
Texas  77002

Attention:  Angelynn Johnson

Telecopy No.:
713-750-2892

Telephone No.:
713-750-2351

 

with a copy to:

 

Andrews Kurth LLP

600 Travis, Suite
4200

Houston, Texas
77002

Attention:  Thomas J. Perich

Telecopy No.:  713-220-4285

Telephone No.:
713-220-4268

 

(iii)          if
to the Issuing Lender, to

 

JPMorgan Chase
Bank, N.A.

Loan and Agency
Services Group

712 Main Street

Houston, Texas
77002

Attention:  Robert Mendoza

Telecopy No.:
713-216-6004

Telephone No.:
713-216-5831

 

66

 

with
a copy to:

 

JPMorgan Chase
Bank, N.A.

1111 Fannin, 10th
Floor

Houston,
Texas  77002

Attention:  Angelynn Johnson

Telecopy No.:
713-750-2892

Telephone No.:
713-750-2351

 

(iv)          if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.

 

(b)           Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative
Agent and the applicable Lender.  The
Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such
procedures may be limited to particular notices or communications.

 

(c)           Any
party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto.  All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt.

 

Section 9.02           Waivers; Amendments.  (a)               No
failure or delay by the Administrative Agent, the Issuing Lender or any Lender
in exercising any right or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies
of the Administrative Agent, the Issuing Lender and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have.  No waiver of any
provision of this Agreement or consent to any departure by the Loan Parties
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which
given.  Without limiting the generality
of the foregoing, the making of a Loan or issuance of a Letter of Credit shall
not be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Lender may have had notice or
knowledge of such Default at the time.

 

(b)           Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Company and the Required Lenders or, in the case of any other Loan Documents,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; provided that
no such agreement shall (i) increase  the
Commitment of any Lender without the

 

67

 

written consent of such Lender, (ii) reduce the
principal amount of any Loan or LC Disbursement or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iii) postpone the scheduled date of payment of
the principal amount of any Loan or LC Disbursement, or any interest thereon,
or any fees payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby, (iv) change Section
2.16(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender,
(v) change any of the provisions of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender, (vi) release all or substantially all the Guarantors from their
Guarantees under the Guarantee Agreement except as expressly provided in the
Guarantee Agreement or Section 9.14, or limit the liability of the
Guarantors in respect of their Guarantee, without the written consent of each
Lender or (vii) release all or substantially all of the Collateral without the
written consent of each Lender, provided, that nothing herein shall prohibit
the Administrative Agent from releasing any Collateral, or require the consent
of the other Lenders for such release, in respect of items sold to the extent
such sale is permitted or not prohibited hereunder; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent or the Issuing Lender hereunder without the prior
written consent of the Administrative Agent or the Issuing Lender, as the case
may be.  Notwithstanding the foregoing,
any provision of this Agreement may be amended by an agreement in writing
entered into by the Company, the Required Lenders and the Administrative Agent
(and, if their rights or obligations are affected thereby the Issuing Lender)
if (i) by the terms of such agreement the Commitment of each Lender not
consenting to the amendment provided for therein shall terminate upon the
effectiveness of such amendment and (ii) at the time such amendment becomes
effective, each Lender not consenting thereto receives payment in full of the
principal of and interest accrued on each Loan made by it and all other amounts
owing to it or accrued for its account under this Agreement.

 

Section 9.03           Expenses; Indemnity; Damage Waiver.  (a)     The
Company shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel and consultants for the Administrative Agent and
such Affiliates, in connection with the syndication of the credit facilities
provided for herein, due diligence undertaken by the Administrative Agent with
respect to the financing contemplated by this Agreement, the preparation and
administration of this Agreement or any amendments, modifications or waivers of
the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Lender in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the Administrative
Agent, the Issuing Lender or, after the occurrence and during the continuance
of any Default, any Lender, including the fees, charges and disbursements of
any counsel and consultant for the Administrative Agent, the Issuing Lender or
any Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out-of-pocket expenses

 

68

 

incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.

 

(b)           The
Company shall indemnify the Administrative Agent, the Issuing Lender and each
Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, the Commitment Letter dated December 15, 2004, among the Borrower,
the Administrative Agent and JP Morgan Securities, Inc., or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit or
the use of the proceeds therefrom (including any refusal by the Issuing Lender to
honor a demand for payment under a Letter of Credit if the documents presented
in connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property currently or formerly owned or operated by
the Company or any of its Subsidiaries, or any Environmental Liability related
in any way to the Company or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto and whether or not caused by the ordinary, sole or
contributory negligence of any Indemnitee; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee.

 

(c)           To
the extent that the Company fails to pay any amount required to be paid by it
to the Administrative Agent or the Issuing Lender under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Administrative Agent
or the Issuing Lender, as the case may be, such Lender’s pro rata share (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred
by or asserted against the Administrative Agent or the Issuing Lender in its
capacity as such.  For purposes hereof, a
Lender’s “pro rata share” shall
be determined based upon its share of the sum of the total Revolving Exposure
and unused Commitments at the time.

 

(d)           To
the extent permitted by applicable Law, the Borrower shall not assert, and
hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.

 

69

 

(e)           All
amounts due under this Section shall be payable promptly after written demand
therefor.

 

Section 9.04           Successors and Assigns.  (a)            The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Lender that issues any Letter of
Credit), except that (i) a Borrower may not assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by a Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person any legal or
equitable right, remedy or claim under or by reason of this Agreement, other
than rights, remedies or claims in favor of the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Lender that issues any Letter of Credit), Participants (to the
extent provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Lender and the Lenders.

 

(b)           (i)
Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld) of:

 

(A)          the
Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default under clause (a), (b), (h) or (i) of Article VII has
occurred and is continuing, any other assignee; and

 

(B)           the
Administrative Agent and the Issuing Lender, provided that no such
consent shall be required for an assignment of any Commitment to an assignee
that is a Lender with a Commitment immediately prior to giving effect to such
assignment;

 

(ii)           Assignments
shall be subject to the following additional conditions:

 

(A)          except
in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment,
the amount of the Commitment or Loans of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Company and the Administrative Agent
otherwise consent, provided that no such consent of the Company shall be
required if an Event of Default under clause (a), (b), (h) or (i) of Article
VII has occurred and is continuing;

 

70

 

(B)           each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement;

 

(C)           the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500;

 

(D)          the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire; and

 

(E)           in
the case of an assignment to 
CLO (as defined below), the assignment Lender shall retain the
sole right to approve any amendment, modification or waiver of any provisions
of this Agreement, provided that the Assignment and Assumption between such
Lender and such CLO may provide that such Lender will not, without the consent
of such CLO, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such CLO.

 

For the purposes
of this Section 9.04(b), the terms “Approved Fund” “CLO”
have the following meanings:

 

“Approved Fund”
means (a) a CLO and (b) with respect to any Lender that is a fund which invests
in bank loans and similar extensions of credit, any other fund that invests in
bank loans and similar extensions of credit and is managed by the same
investment advisor as such lender or by an Affiliate of such investment
advisor.

 

“CLO” means
any entity (whether a corporation, partnership, trust or otherwise) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.

 

(iii)          Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Assumption
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Section
2.13, 2.14, 2.15 and 10.03).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section
9.04 shall be

 

71

 

treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (c) of this Section.

 

(iv)          The
Administrative Agent, acting for this purpose as an agent of the Borrowers,
shall maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent, the Issuing Lender and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by any Borrower, the Issuing Lender and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

 

(v)           Upon
its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this Section,
the Administrative Agent shall accept such Assignment and Assumption and record
the information contained therein in the Register.  No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.

 

(c)           (i)
Any Lender may, without the consent of the Company, the Administrative Agent or
the Issuing Lender, sell participations to one or more banks or other entities
(a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided that (A) such Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (C) the Borrower, the Administrative Agent, the Issuing Lender
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver described in the first proviso to Section 9.02(b) that affects
such Participant.  Subject to paragraph
(c)(ii) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Section 2.13, 2.14
and 2.15 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject to Section
2.16(c) as though it were a Lender.

 

72

 

(ii)           A
Participant shall not be entitled to receive any greater payment under Section
2.13 or 2.15 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Company’s prior
written consent.  A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.15 unless the Company is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Company, to comply with Section 2.15(e) as though it were
a Lender.

 

(d)           Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

 

Section 9.05           Survival.  All covenants, agreements, representations
and warranties made by the Loan Parties herein and in the certificates or other
instruments  delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by
the other parties hereto and shall survive the execution and delivery of this
Agreement and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Lender or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated.  The provisions of Section 2.13, 2.14,
2.15 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.

 

Section 9.06           Counterparts; Integration; Effectiveness.  This Agreement may be executed in
counterparts and may be delivered in original or facsimile form (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Agreement, the
other Loan Documents and the Fee Letter constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof.  Except as
provided in Section 4.01, this Agreement shall become effective when it
shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. 
Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.

 

73

 

Section 9.07           Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

Section 9.08           Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of any Borrower
against any and all of the obligations of any Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured.  The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.

 

Section 9.09           Governing Law; Consent to Service of Process.  (a)      This
Agreement and the Loan Documents shall be construed in accordance with and
governed by the law of the State of Texas.

 

(b)           The
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the court of the State of Texas
sitting in Harris County and of the United States District Court of the
Southern District of Texas, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such Texas State or,
to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Agreement
shall affect any right that the Administrative Agent, the Issuing Lender or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement against any Borrower or its properties in the courts of any
jurisdiction.

 

(c)           Each
Borrower hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement in any court referred to in paragraph (b)
of this Section.  Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

Without limitation of the foregoing, nothing in this
Agreement, or in the Notes or in any other Loan Document shall be deemed to
constitute a waiver of any rights which any Lender, or the holder of any Note
may have under applicable federal legislation relating to the amount of interest
which such Lender or holder may contract for, take, receive or charge in
respect of the Loan and the Loan Documents, including any right to take,
receive, reserve and

 

74

 

charge
interest at the rate allowed by the law of the state where any Lender is
located.  The Administrative Agent, each
Lender and the Borrower further agree that insofar as the provisions of Chapter
303 of the Texas Finance Code, as amended, are applicable to the determination
of the Highest Lawful Rate with respect to the Notes and the Obligations
hereunder and under the other Loan Documents, the indicated rate ceiling of
such Article shall be applicable; provided, however, that to the extent
permitted by such Article, the Administrative Agent may from time to time by
notice to the Borrower revise the election of such interest rate ceiling as
such ceiling affects the then current or future balances of the Loans.  The provisions of Chapter 346 of the Texas
Finance Code, as amended, do not apply to this Agreement, any Note issued
hereunder or the other Loan Documents.

 

Section 9.10           WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). 
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

Section 9.11           Headings. 
Article and Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting,
this Agreement.

 

Section 9.12           Confidentiality.  Each of the Administrative Agent, the Issuing
Lender and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii)  any actual
or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to any Borrower and its obligations, (g) with the consent
of the Company or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, the Issuing Lender or any Lender on a
nonconfidential basis from a source other than the Borrower.  For the purposes of this Section, “Information”
means all information received from the Company relating to the Company or its
business, other than any such information that is

 

75

 

available to the Administrative
Agent, the Issuing Lender or any Lender on a nonconfidential basis prior to
disclosure by the Company; provided that, in the case of information
received from the Company after the date hereof, such information is clearly
identified at the time of delivery as confidential.  Any Person required to
maintain the confidentiality of Information as provided in this Section
shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of
such Information as such Person would accord to its own confidential
information.

 

Section 9.13           Interest.  Each provision in this Agreement and each
other Loan Document is expressly limited so that in no event whatsoever shall
the amount paid, or otherwise agreed to be paid, to the Administrative Agent or
any Lender or charged, contracted for, reserved, taken or received by the
Administrative Agent or any such Lender, for the use, forbearance or detention
of the money to be loaned under this Agreement or any Loan Document or
otherwise (including any sums paid as required by any covenant or obligation
contained herein or in any other Loan Document which is for the use,
forbearance or detention of such money), exceed that amount of money which
would cause the effective rate of interest to exceed the Highest Lawful Rate,
and all amounts owed under this Agreement and each other Loan Document shall be
held to be subject to reduction to the effect that such amounts so paid or
agreed to be paid, charged, contracted for, reserved, taken or received which
are for the use, forbearance or detention of money under this Agreement or such
Loan Document shall in no event exceed that amount of money which would cause
the effective rate of interest to exceed the Highest Lawful Rate.  Anything in any Note or any other Loan
Document to the contrary notwithstanding, the Borrowers shall not be required
to pay unearned interest on any Note and the Borrowers shall not be required to
pay interest on the Obligations at a rate in excess of the Highest Lawful Rate,
and if the effective rate of interest which would otherwise be payable under
such Note and such Loan Documents would exceed the Highest Lawful Rate, or if
the holder of such Note shall receive any unearned interest or shall receive
monies that are deemed to constitute interest which would increase the
effective rate of interest payable by the Borrowers under such Note and the
other Loan Documents to a rate in excess of the Highest Lawful Rate, then (a)
the amount of interest which would otherwise be payable by the Borrowers shall
be reduced to the amount allowed under applicable law and (b) any unearned
interest paid by the Borrowers or any interest paid by the Borrowers in excess
of the Highest Lawful Rate shall in the first instance be credited on the
principal of the obligations of the Borrowers (or if all such obligations shall
have been paid in full, refunded to the Borrowers).  It is further agreed that, without the
limitation of the foregoing, all calculations of the rate of interest
contracted for, reserved, taken, charged or received by any Lender under the
Notes and the Obligations and under the other Loan Documents are made for the
purpose of determining whether such rate exceeds the Highest Lawful Rate, and
shall be made, to the extent permitted by usury laws applicable to such Lender,
by amortizing, prorating and spreading in equal parts during the period of the
full stated term of the Notes and this Agreement and all interest at any time
contracted for, charged or received by such Lender in connection therewith.

 

Section 9.14           Release of Liens and Guarantees.  In the event that the Company or any
Subsidiary sells, transfers or otherwise disposes of all or any portion of any
of the Equity Interests, assets or property owned by the Company or such
Subsidiary in a transaction not prohibited by this Agreement, the
Administrative Agent and the Collateral Agent shall promptly (and the Lenders
hereby authorize and instruct the Administrative Agent and the Collateral

 

76

 

Agent to) take such action and execute any such documents as may be
reasonably requested by the Company and at the Borrower’s expense to release
any Liens created by any Loan Document in respect of such Equity Interests,
assets or property, including the release and satisfaction of record of any
mortgage or deed of trust granted in connection herewith, and, in the case of a
disposition of all or substantially all the Equity Interests or assets of any
Subsidiary that is a Loan Party, terminate such Subsidiary’s obligations under
the Guarantee Agreement and each other Loan Document. In addition, the
Administrative Agent and the Collateral Agent agree to take such actions as are
reasonably requested by the Company and at the Borrower’s expense to terminate
the Liens and security interests created by the Loan Documents when all the
Obligations have been paid in full and all Letters of Credit and Commitments
terminated.

 

Section 9.15           No Novation. 
The execution, delivery and effectiveness of this Agreement shall not
extinguish the obligations for the payment of money outstanding under the
Amended and Restated Agreement or discharge or release the Lien or priority of
any Security Document or any other security therefor. Nothing herein contained
shall be construed as a substitution or novation of the obligations outstanding
under the Amended and Restated Agreement or any agreements securing the same,
which shall remain in full force and effect, except as modified hereby or by
agreements executed concurrently herewith. Nothing expressed or implied in this
Agreement or any other document contemplated hereby shall be construed as a
release or other discharge of Company under the Amended and Restated Agreement
or any Guarantor under any Loan Document from any of its obligations and
liabilities thereunder. Each of the Amended and Restated Agreement and the
other Loan Documents shall remain in full force and effect until and except as
expressly modified hereby.

 

Section 9.16           USA Patriot Act.  Each Lender hereby notifies the Borrowers
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001) (the “Act”), it is
required to obtain, verify and record information that identifies the
Borrowers, which information includes the name and address of any Borrower and
other information that will allow such Lender to identify any Borrower in
accordance with the Act.

 

Section 9.17           Release of Benchmark BV Holdings,
Inc.  Notwithstanding anything
in this Agreement to the contrary, the Lenders hereby acknowledge and agree
that, so long as no Default or Event of Default exists hereunder, upon delivery
to the Administrative Agent of (a) a written request by the Company that
Benchmark BV Holdings, Inc., a Delaware corporation (“Benchmark BV”) be
released as a Guarantor and (b) written evidence satisfactory to
Administrative Agent that Benchmark BV has no assets and that proceedings have
been commenced to dissolve Benchmark BV, Benchmark BV shall be released as a
Guarantor and upon the request of Company, the Administrative Agent shall
provide evidence of such release to the Company.

 

Section 9.18           FINAL AGREEMENT OF THE PARTIES.  THIS AGREEMENT (INCLUDING THE SCHEDULES AND
EXHIBITS HERETO), THE NOTES AND OTHER LOAN DOCUMENTS CONSTITUTE A “LOAN
AGREEMENT” AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS AND COMMERCIAL
CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF

 

77

 

PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

78

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

 

	
   

  	
  BENCHMARK ELECTRONICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gayla. J. Delly

  	
   

  
	
   

  	
  Name:
   Gayla J. Delly

  
	
   

  	
  Title:    Chief
  Financial Officer

  

 

79

 

	
   

  	
  JPMORGAN CHASE BANK, N.A., individually

  and as Administrative Agent and Issuing Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert L. Mendoza

  	
   

  
	
   

  	
  Name:
   Robert L. Mendoza

  
	
   

  	
  Title:    Vice
  President

  

 

80

 

	
   

  	
  FLEET NATIONAL BANK, individually and as

  Co-Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Richard E. Anderson

  	
   

  
	
   

  	
  Name:
   Richard E. Anderson

  
	
   

  	
  Title:    Managing Director

  

 

81

 

	
   

  	
  COMERICA BANK, individually and as Co-

  Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenyatta Gibbs

  	
   

  
	
   

  	
  Name:
   Kenyatta Gibbs

  
	
   

  	
  Title:    Vice
  President – Texas Division

  

 

82

 

	
   

  	
  WELLS FARGO BANK, N.A., individually and

  as Co-Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Warren R. Ross

  	
   

  
	
   

  	
  Name:
   Warren R. Ross

  
	
   

  	
  Title:    Vice
  President

  

 

83

 

	
   

  	
  THE BANK OF TOKYO-MITSUBISHI, LTD.,

  HOUSTON AGENCY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John W. McGhee

  	
   

  
	
   

  	
  Name:
   John W. McGhee

  
	
   

  	
  Title:   Vice President & Manager

  

 

84

 

	
   

  	
  CITICORP USA INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Avrum Spiegel

  	
   

  
	
   

  	
  Name:
   Avrum Spiegel

  
	
   

  	
  Title:    Vice
  President

  

 

85

 

	
   

  	
  CREDIT SUISSE FIRST BOSTON, acting

  through its Cayman Islands Branch

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Alain Daoust

  	
   

  
	
   

  	
  Name:
   Alain Daoust

  
	
   

  	
  Title:    Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter Chauvin

  	
   

  
	
   

  	
  Name:
   Peter Chauvin

  
	
   

  	
  Title:    Vice
  President

  
					

 

86

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