Document:

Exhibit
10.1

 

STOCK
PURCHASE AGREEMENT

 

by and
among

 

POLYPORE
INC.

 

AND THE
SELLERS NAMED HEREIN,

 

 

and

 

 

PP
ACQUISITION CORPORATION

 

 

dated as of
January 30, 2004

 

 

TABLE OF
CONTENTS

 

	
  1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Basic Transaction

  	
   

  
	
   

  	
  (a)

  	
  Purchase and Sale of
  the Shares

  	
   

  
	
   

  	
  (b)

  	
  The Closing

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Representations
  and Warranties of the Company and the Sellers

  	
   

  
	
   

  	
  (a)

  	
  Authorization of Transaction

  	
   

  
	
   

  	
  (b)

  	
  Noncontravention

  	
   

  
	
   

  	
  (c)

  	
  Brokers’ Fees

  	
   

  
	
   

  	
  (d)

  	
  Title

  	
   

  
	
   

  	
  (e)

  	
  Capitalization

  	
   

  
	
   

  	
  (f)

  	
  Subsidiaries

  	
   

  
	
   

  	
  (g)

  	
  Financial
  Statements

  	
   

  
	
   

  	
  (h)

  	
  Absence of Certain
  Developments

  	
   

  
	
   

  	
  (i)

  	
  Undisclosed Liabilities

  	
   

  
	
   

  	
  (j)

  	
  Legal
  Compliance

  	
   

  
	
   

  	
  (k)

  	
  Tax Matters

  	
   

  
	
   

  	
  (1)

  	
  Real Property and Assets

  	
   

  
	
   

  	
  (m)

  	
  Intellectual
  Property

  	
   

  
	
   

  	
  (n)

  	
  Contracts

  	
   

  
	
   

  	
  (o)

  	
  Insurance

  	
   

  
	
   

  	
  (p)

  	
  Litigation

  	
   

  
	
   

  	
  (q)

  	
  Employees

  	
   

  
	
   

  	
  (r)

  	
  Employee
  Benefits

  	
   

  
	
   

  	
  (s)

  	
  Environmental
  Matters

  	
   

  
	
   

  	
  (t)

  	
  Certain
  Business Relationships with the Company

  	
   

  
	
   

  	
  (u)

  	
  Products
  Liability

  	
   

  
	
   

  	
  (v)

  	
  Customers
  and Suppliers

  	
   

  
	
   

  	
  (w)

  	
  Prohibited
  Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Representations and
  Warranties of the Buyer

  	
   

  
	
   

  	
  (a)

  	
  Organization of the Buyer

  	
   

  
	
   

  	
  (b)

  	
  Authorization of
  Transaction

  	
   

  
	
   

  	
  (c)

  	
  Noncontravention

  	
   

  
	
   

  	
  (d)

  	
  Brokers’ Fees

  	
   

  
	
   

  	
  (e)

  	
  Availability
  of Funds

  	
   

  
	
   

  	
  (f)

  	
  Acquisition of
  the Shares for Investment

  	
   

  
	
   

  	
  (g)

  	
  Other Matters

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Pre-Closing Covenants

  	
   

  
	
   

  	
  (a)

  	
  General

  	
   

  

 

i

 

	
   

  	
  (b)

  	
  Notices
  and Consents

  	
   

  
	
   

  	
  (c)

  	
  Operation
  of Business

  	
   

  
	
   

  	
  (d)

  	
  Equity
  Issuances; Dividends and Distributions

  	
   

  
	
   

  	
  (e)

  	
  Restrictions on Transfer

  	
   

  
	
   

  	
  (f)

  	
  Preservation of Business

  	
   

  
	
   

  	
  (g)

  	
  Access
  to Books and Records and Customers and Suppliers

  	
   

  
	
   

  	
  (h)

  	
  Notice
  of Developments

  	
   

  
	
   

  	
  (i)

  	
  No
  Additional Representations or Warranties

  	
   

  
	
   

  	
  (j)

  	
  Disclaimer
  Regarding Estimates and Projections

  	
   

  
	
   

  	
  (k)

  	
  Financing

  	
   

  
	
   

  	
  (1)

  	
  No
  Solicitation

  	
   

  
	
   

  	
  (m)

  	
  2003 Audited Financial
  Statements

  	
   

  
	
   

  	
  (n)

  	
  Selling Expense Schedule

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Post-Closing Covenants

  	
   

  
	
   

  	
  (a)

  	
  General

  	
   

  
	
   

  	
  (b)

  	
  Litigation
  Support

  	
   

  
	
   

  	
  (c)

  	
  Tax Matters

  	
   

  
	
   

  	
  (d)

  	
  Performance of
  Obligations by the Buyer

  	
   

  
	
   

  	
  (e)

  	
  Directors’ and
  Officers’ Indemnification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Conditions to
  Obligation to Close

  	
   

  
	
   

  	
  (a)

  	
  Conditions to Obligation
  of the Buyer

  	
   

  
	
   

  	
  (b)

  	
  Conditions to
  Obligation of the Sellers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Remedies for
  Breaches of this Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Termination

  	
   

  
	
   

  	
  (a)

  	
  Termination of Agreement

  	
   

  
	
   

  	
  (b)

  	
  Effect
  of Termination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Miscellaneous

  	
   

  
	
   

  	
  (a)

  	
  Press Releases
  and Public Announcements

  	
   

  
	
   

  	
  (b)

  	
  Third-Party Beneficiaries

  	
   

  
	
   

  	
  (c)

  	
  Entire
  Agreement

  	
   

  
	
   

  	
  (d)

  	
  Succession and Assignment

  	
   

  
	
   

  	
  (e)

  	
  Counterparts

  	
   

  
	
   

  	
  (f)

  	
  Headings

  	
   

  
	
   

  	
  (g)

  	
  Notices

  	
   

  
	
   

  	
  (h)

  	
  Governing Law; Jurisdiction

  	
   

  
	
   

  	
  (i)

  	
  Amendments
  and Waivers

  	
   

  
	
   

  	
  (j)

  	
  Severability

  	
   

  
	
   

  	
  (k)

  	
  Expenses

  	
   

  
	
   

  	
  (1)

  	
  Construction

  	
   

  
	
   

  	
  (m)

  	
  Incorporation
  of Exhibits and Schedules

  	
   

  
	
   

  	
  (n)

  	
  Disclosure
  Schedule

  	
   

  

 

ii

 

EXHIBITS

 

	
  Exhibit
  A

  	
   

  	
  Historical
  Financial Statements

  
	
  Exhibit
  B

  	
   

  	
  Terms
  of Transition Services Agreement

  
	
   

  	
   

  	
   

  
	
  SCHEDULES

  
	
   

  
	
  Indebtedness Schedule (§2(b)(ii)(B))

  
	
  Seller Disclosure Schedule (§3 and §5(h)(i))

  
	
  Buyer Disclosure Schedule (§4)

  
	
  Notices Schedule (§10(g))

  

 

iii

 

STOCK
PURCHASE AGREEMENT

 

This Stock Purchase Agreement is made as of January 30, 2004, by
and among PP Acquisition Corporation, a Delaware corporation (the “Buyer”),
Polypore Inc., a Delaware corporation (the “Company”), and the persons
listed as Shareholders on the signature pages hereto (collectively referred to
herein as “Sellers” and individually as “Seller”). The Buyer, the
Company and the Sellers are each referred to in this Agreement as a “Party”
and collectively as the “Parties.”

 

The authorized capital stock of the Company consists of 20,000 shares
of Class A Preferred Stock, par value $.01 per share (the “Class A Preferred”),
10,000 shares of Class B-1 Preferred Stock, par value $.01 per share (the “Class
B-1 Preferred”), 5,000 shares of Class B-2 Preferred Stock, par value $.01
per share (the “Class B-2 Preferred”), 40,000 shares of Class C
Preferred Stock, par value $.01 per share (the “Class C Preferred” and
together with the Class A Preferred, Class B-1 Preferred and Class B-2
Preferred, the “Preferred Stock”), 250,000 shares of Class A Common
Stock, par value $.01 per share (the “Class A Common”), 50,000 shares of
Class B Common Stock, par value $.01 per share (the “Class B Common”)
25,000 shares of Class C Common Stock, par value $.01 per share (the “Class
C Common” and together with the Class A Common and Class B Common, the “Common
Stock”). The Class B Common and Class C Common are convertible into shares
of Class A Common.

 

As of the date of this
Agreement, there are 14,000 outstanding shares of Class A Preferred (the “Preferred
Shares”), 141,292 outstanding shares of Class A Common (the “Class A
Shares”), 6,040 outstanding shares of Class B Common (the “Class B
Shares”) and 7,754 outstanding shares of Class C Common (the “Class C
Shares”). The Preferred Shares, Class A Shares, Class B Shares and the
Class C Shares are collectively referred to in this Agreement as the “Shares.”
There are no shares of Class B-1 Preferred, Class B-2 Preferred, or Class C
Preferred outstanding as of the date of this Agreement.

 

The persons listed as
Shareholders on the signature pages hereto (collectively referred to herein as
“Shareholders” and individually as a “Shareholder”) own
beneficially and of record all of the issued and outstanding Shares. The Buyer
desires to purchase from each of the Shareholders, and each of the Shareholders
desires to sell to the Buyer, all of the Shares owned by such Shareholder as of
the Closing Date, subject to the terms and conditions set forth in this
Agreement.

 

NOW, THEREFORE, in
consideration of the premises and the mutual promises herein made, and in
consideration of the representations, warranties and covenants contained
herein, the Parties agree as follows.

 

1.            Definitions.

 

“2003 Audited Financial
Statements” means the Company’s audited balance sheet and statements of income,
stockholders’ equity and cash flows as of and for the fiscal year ended
January 3, 2004.

 

 

“Affiliate”
has the meaning set forth in Rule 12b-2 of the regulations promulgated under
the Securities Exchange Act.

 

“Asbestos”
includes chrysotile, amosite, crocidolite, tremolite asbestos, anthophyllite
asbestos, actinolite asbestos, asbestos winchite, asbestos richterite, and any
of these minerals that have been chemically treated and/or altered and any asbestiform
variety, type or component thereof and any Asbestos-Containing Material.

 

“Asbestos-Containing
Material” means any material containing Asbestos, including, without
limitation, any Asbestos-containing products, automotive or industrial parts or
components, equipment, improvements to real property and any other material
that contains asbestos in any chemical or physical form.

 

“Buyer”
has the meaning set forth in the preface above.

 

“Cash”
means cash and cash equivalents (including marketable securities and short term
investments and checks received by the Company prior to the Closing Date)
calculated in accordance with GAAP applied on a basis consistent with the
preparation of the Financial Statements.

 

“Class A
Common” has the meaning set forth in the preface above.

 

“Class A
Preferred” has the meaning set forth in the preface above.

 

“Class A
Shares” has the meaning set forth in the preface above.

 

“Class B
Common” has the meaning set forth in the preface above.

 

“Class B
Shares” has the meaning set forth in the preface above.

 

“Class B-l
Preferred” has the meaning set forth in the preface above.

 

“Class B-2
Preferred” has the meaning set forth in the preface above.

 

“Class C
Common” has the meaning set forth in the preface above.

 

“Class C
Preferred” has the meaning set forth in the preface above.

 

“Class C
Shares” has the meaning set forth in the preface above.

 

“Closing”
has the meaning set forth in §2(b)(i) below.

 

“Closing
Cash Consideration” has the meaning set forth in §2(a) below.

 

“Closing Date”
has the meaning set forth in §2(b)(i) below.

 

“Closing Transactions” has the meaning set
forth in §2(b)(ii) below.

 

2

 

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

 

“Commitments”
has the meaning set forth in §4(e) below. 

 

“Common
Stock” has the meaning set forth in the preface above.

 

“Company”
has the meaning set forth in the preface above. 

 

“Company
Representative” has the meaning set forth in §5(k) below.

 

“Competition
Laws” means United States or foreign statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines and other laws that are designed
or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade, including without limitation
the Hart-Scott-Rodino Act and the EC Merger Regulation.

 

“Confidentiality
Agreement” has the meaning set forth in §5(g) below.

 

“Constitutive
Documents” means, with respect to any Person, such Person’s articles or certificate
of incorporation and by-laws, certificate of formation and limited liability
company agreement or operating agreement, trust agreement or other constitutive
documents, as applicable.

 

“Credit
Agreement” means that certain Credit Agreement, dated as of
December 15, 1999, as amended from time to time, among the Company,
Daramic Holdings S.A., Daramic S.A., certain Subsidiaries of the Company, the
lenders party thereto and The Chase Manhattan Bank, as Administrative Agent.

 

“Debt
Financing” has the meaning set forth in §4(e) below.

 

“Disclosure
Schedule” has the meaning set forth in §3 below.

 

“EBITDA”
means the sum, for the Company and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP), of the
following: (a) net earnings (or loss) after taxes for such period plus
(b) amounts deducted from net revenues for such period in determining such net
earnings (or loss) on account of (i) interest expense, (ii) federal, state or
foreign income taxes and (iii) depreciation and amortization minus (c)
non-recurring gains for such period plus (d) non-recurring losses for
such period plus (e) any Selling Expenses paid or accrued during such
period. Notwithstanding the foregoing, EBITDA shall not include any unrealized
foreign currency translation gains or losses resulting from the remeasurement
of United States dollar-denominated indebtedness (including, without
limitation, the loans outstanding under the Credit Agreement) of any entity
into the functional currency of such entity (if such functional currency is a
currency other than United States dollars) for financial reporting purposes.

 

“EC Merger
Regulation” means Council Regulation No. 4064/89 of the European Community.

 

3

 

“Employee”
means a person employed by the Company or any of its Subsidiaries.

 

“Employee
Pension Benefit Plan” has the meaning set forth in ERISA §3(2).

 

“Employee
Welfare Benefit Plan” has the meaning set forth in ERISA §3(1).

 

“Environmental
Law” shall mean any foreign, federal, state, or local law, statute, rule,
regulation, order or other requirement of law relating to (A) the manufacture,
transport, use, emission, treatment, storage, disposal, exposure, release or
threatened release of pollutants, contaminants, chemicals or wastes, or (B) the
protection of employee health and safety or the environment (including, without
limitation, natural resources, air, and surface or subsurface land or waters).

 

“Equity Financing” has the meaning set forth
in §4(e) below.

 

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

 

“Financial
Statements” has the meaning set forth in §3(g) below.

 

“Funded
Indebtedness” has the meaning set forth in §2(b)(ii)(B) below.

 

“GAAP”
means United States generally accepted accounting principles as in effect from
time to time.

 

“Hart-Scott-Rodino
Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

 

“Hazardous
Substance” means any pollutant, contaminant, chemical, waste, or any other
carcinogenic, toxic or hazardous substances or materials, including but not
limited to Asbestos or Asbestos Containing Material, petroleum, including crude
oil and any fractions thereof, or other wastes, chemicals, substances or
materials subject to regulation or remediation under any Environmental Law.

 

“Indemnified
Parties” has the meaning set forth in §6(e) below.

 

“Intellectual
Property” means all patents, patent applications, patent disclosures and
inventions; trademarks, service marks, trade dress, logos, trade names,
corporate names and Internet domain names, together with all goodwill
associated therewith (including all translations, adaptations, derivations and
combinations of the foregoing); copyrights and copyrightable works; and
registrations, applications and renewals for any of the foregoing.

 

“Knowledge”
means, with respect to (i) the Company, the actual knowledge of Jerry Zucker,
Lynn Amos, Frank Nasisi, Stefan Geyler, Brad Reed, Rob Whitsett and Jeff
Winkler and (ii) Buyer, the actual knowledge of Kevin Kruse, David Barr and
Mike Graff.

 

“Leased
Real Property” has the meaning set forth in §3(l)(ii) below.

 

4

 

“Liquidation
Value” shall mean the sum of $1,000, with respect to each outstanding share
of Class A Preferred.

 

“Material
Adverse Effect” means, with respect to the Company or its Subsidiaries, an
event, occurrence or circumstance that has had or is reasonably likely to have
a material adverse effect on the business, assets, financial condition or
results of operations of the Company and its Subsidiaries taken as a whole; provided, however, that the term “Material
Adverse Effect” shall not include any effect attributable to (i) any event,
occurrence, circumstance or trend, including but not limited to a diminution in
value, relating to the Company or its Subsidiaries, their business, assets,
financial condition or results of operations that, to the Knowledge of the
Buyer, exist as of the date hereof; (ii) a change (after the date hereof) in
law or GAAP or the interpretation thereof that applies generally to the
industry in which the Company and its Subsidiaries operate that does not have a
disproportionate and adverse effect on the Company and its Subsidiaries; (iii)
any change or event relating to the general economy of any nation or region in
which the Company or any of its Subsidiaries operates that does not have a
disproportionate and adverse effect on the Company and its Subsidiaries; and
(iv) any change or event relating to the industries in which the Company or any
of its Subsidiaries operates that does not have a disproportionate and adverse
effect on the Company and its Subsidiaries.

 

“Most
Recent Balance Sheet” means the balance sheet contained within the Most
Recent Financial Statements.

 

“Most
Recent Financial Statements” has the meaning set forth in §3(g) below.

 

“Most
Recent Fiscal Month End” has the meaning set forth in §3(g) below.

 

“Most
Recent Fiscal Year End” has the meaning set forth in §3(g) below.

 

“Ordinary
Course of Business” means the ordinary course of business consistent with
past custom and practice.

 

“Owned Real
Property” has the meaning set forth in §3(l)(i) below.

 

“Party”
and “Parties” have the meanings set forth in the preface above.

 

“Permitted
Liens” means (i) mechanic’s, materialmen’s and similar liens arising in the
Ordinary Course of Business for sums not yet due and payable, (ii) liens for
Taxes not yet due and payable or for Taxes that the taxpayer is contesting in
good faith through appropriate proceedings to the extent reserves or other
appropriate provisions that are required by GAAP have been made therefore,
(iii) purchase money liens and liens securing rental payments under capital
lease arrangements, (iv) other liens arising in the Ordinary Course of Business
and not incurred in connection with the borrowing of money which would not be
reasonably expected to have a Material Adverse Effect, (v) zoning, building and
other land use laws imposed by any governmental authority; (vi) easements,
covenants, conditions, restrictions and other similar matters of record
affecting title and such other title defects which would not be reasonably
expected to have a Material Adverse Effect, (vii) any matters of record that
would be disclosed in a current title commitment which would not be reasonably
expected to have a Material

 

5

 

Adverse
Effect, (viii) matters that would be disclosed by an accurate survey which
would not be reasonably expected to have a Material Adverse Effect; and (ix)
with respect to real property located outside of the United States, any other
liens, encumbrances, restrictions or other defects customarily accepted by
buyers in such jurisdiction which would not be reasonably expected to have a
Material Adverse Effect.

 

“Person”
means an individual, a partnership, a limited liability company, a corporation,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental entity (or any department, agency
or political subdivision thereof).

 

“Plans”
has the meaning set forth in §3(r)(i) below.

 

“Preferred
Shares” has the meaning set forth in the preface above.

 

“Preferred
Stock” has the meaning set forth in the preface above.

 

“Real
Property Leases” has the meaning set forth in §3(l)(ii) below.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

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

 

“Stockholders
Agreement” means that certain Stockholders Agreement, dated
November 18, 1994, among the Company and the Stockholders of the Company
listed therein, as amended.

 

“Security
Interest” means any mortgage, pledge, lien, encumbrance, charge or other
security interest.

 

“Seller”
and “Sellers” have the meanings set forth in the preface above.

 

“Selling
Expenses” means the fees, expenses, charges and other payments incurred or
otherwise payable by the Company or any of its Subsidiaries specifically
related to the transactions contemplated by this Agreement, which shall include,
without limitation, (a) the fees, expenses, charges and other payments to
counsel, accountants, financial advisors or investment bankers of the Company
and its Subsidiaries arising out of the transactions contemplated by this
Agreement, (b) all amounts due to any employee or consultant of the Company or
its Subsidiaries in respect of any stay bonuses, severance payments, change of
control payments or other similar payments arising (i) solely from the
consummation of the transactions contemplated by this Agreement (provided that
amounts due in respect of any stay bonuses and other similar payments shall be
deemed to arise solely from the consummation of the transactions contemplated
by this Agreement) and (ii) that do not require any subsequent action by the
Buyer, the Company or any Subsidiary following the Closing to make such amounts
due, including termination of the employment of such person , (c) any premium,
make whole payment or similar penalties due to any lender of the Company or its
Subsidiaries arising from the transactions contemplated hereby, including
repayment of the Funded Indebtedness, and (d) the net amount of any prepayments
of Funded Indebtedness made after January 3, 2004, including any premium,
make whole payment or similar penalties relating thereto.

 

6

 

“Shareholder”
and “Shareholders” have the meanings set forth in the preface above.

 

“Shares”
has the meaning set forth in the preface above.

 

“Subsidiary”
means any corporation, limited liability company, partnership or other entity
with respect to which a specified Person (or a Subsidiary thereof) owns,
directly or indirectly, a majority of the common stock or equity interests or
has the power to vote or direct the voting of sufficient securities to elect a
majority of the directors or managers, as the case may be.

 

“Tax”
or “Taxes” mean all federal, state, local and foreign net income, gross
income, gross receipts, sales, use, ad valorem, transfer, franchise, profits,
license, lease, service, service use, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, windfall profits, customs,
duties or other taxes, together with interest and any penalties.

 

“Termination
Date Extension Event” means the occurrence and continuation of any of the
following to Frank Nasisi (a) his death, (b) his resignation as chief operating
officer of the Company or (c) if, as a result of health reasons, he experiences
a meaningful deterioration in the performance of his duties as chief operating
officer compared to his past performance and activity level.

 

“Tax Return”
means any return, declaration, report, claim for refund or information return
or statement relating to Income Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

 

“Transaction”
has the meaning set forth in §5(1) below.

 

2.             Basic Transaction.

 

(a) Purchase and Sale of the Shares.
At the Closing, upon the terms and subject to the conditions set forth in this
Agreement, each of the Sellers shall sell, assign, transfer and convey to the
Buyer, and the Buyer shall purchase and acquire from each of the Sellers, all
of the Shares owned by such Seller free and clear of any Security Interests,
against payment at the Closing of an aggregate amount equal to the portion of
the Closing Cash Consideration set forth below.

 

The term “Closing
Cash Consideration” means (i) $1,150,000,000, minus (ii) all
principal and accrued interest in respect of the Funded Indebtedness of the
Company and its Subsidiaries outstanding immediately prior to the Closing Date
that will be repaid pursuant to §2(b)(ii)(B) on the Closing Date, plus
the amount of Cash of the Company and its Subsidiaries determined on a
consolidated basis on January 3, 2004 as reflected on the 2003 Audited
Financial Statements, minus the aggregate amount of the Selling Expenses
(determined without any duplication related to Funded Indebtedness). Closing
Cash Consideration shall be subject to a one-time reduction in the amount of
the sum of (A) any accrued current Taxes incurred in and payable for the
fiscal year ended January 3, 2004 as reflected on the 2003 Audited
Financial Statements plus (B) in the event the Company receives written
notice from the IRS prior to the Closing Date that the IRS has disallowed the
Company’s §338(g) election with respect to the purchase of stock described in
§(3)(k) of the Disclosure Schedule, an amount equal to the Taxes the Company
would be obligated to pay as a result of failing to make a timely §338(g) election

 

7

 

with
respect to such purchase, without taking into account the transactions
contemplated by this Agreement; provided that
the amount of the one-time reduction for amounts under clauses (A) and (B)
shall in no event exceed $12.5 million in the aggregate. Closing Cash
Consideration shall also be subject to a one-time reduction if the EBITDA as
derived from the 2003 Audited Financial Statements (“2003 EBITDA”) is less than
$124.3 million, but greater than $119.3 million, by an amount equal to the
product of (x) 8.65 times (y) the difference of $124.3 million minus
the greater of (A) 2003 EBITDA and (B) $119.3 million; provided, that the
amount of clause (y) shall not, in any event, exceed more than $5.0 million,
and the reduction in Closing Cash Consideration shall not, in any event, exceed
$43.25 million.

 

The Closing
Cash Consideration shall be allocated among the Sellers holding Class A
Preferred, in amounts equal to the product of (i) the number of shares of Class
A Preferred held by each such Seller multiplied by (ii) the Liquidation
Value thereof, plus (iii) all accrued and unpaid dividends thereon, with
the remaining Closing Cash Consideration to be allocated among the Shareholders
in proportion to their respective holdings of Class A Shares (or rights to
acquire Class A Shares).

 

(b) The Closing.

 

(i)            The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of Willkie Farr & Gallagher LLP, 787
Seventh Avenue, New York, New York at 10:00 a.m. on the second business day
following full satisfaction or due waiver of all of the closing conditions set
forth in §7 hereof (other than those to be satisfied at the Closing) or at such
other location or on such other date as is mutually agreeable to the Buyer and
the Sellers. The date and time of the Closing are herein referred to as the “Closing
Date.”

 

(ii)           Subject
to the terms and conditions set forth in this Agreement, the Parties hereto
shall consummate the following transactions (the “Closing Transactions”)
on the Closing Date:

 

(A)          the Buyer shall deliver to each of the holders of Shares such
Shareholder’s portion of the Closing Cash Consideration (as determined in
accordance with §2(a) herein), by wire transfer of immediately available funds
to one or more accounts designated by the Sellers to the Buyer prior to the
Closing;

 

(B)           the Buyer shall repay, or cause to be repaid, on behalf of the Company
and its Subsidiaries all amounts necessary to discharge fully the then
outstanding balance of all indebtedness for borrowed money, including the
indebtedness listed on the attached Indebtedness Schedule (such
amount, in the aggregate, the “Funded Indebtedness;” provided that
Funded Indebtedness shall not include any indebtedness of Buyer or any
indebtedness of the Company or any of its Subsidiaries incurred to finance the
Closing Cash Consideration) by wire transfer of immediately available funds as
directed by the holders of the Funded Indebtedness at or prior to the Closing,
and the Company shall deliver to the Buyer all appropriate payoff letters and
shall make arrangements reasonably

 

8

 

satisfactory to the Buyer for such holders to deliver releases and canceled
notes at the Closing;

 

(C)           the Sellers shall deliver to the Buyer certificates, duly endorsed in
blank or accompanied by duly executed stock powers, representing all Shares of
the Company issued and outstanding as of the Closing;

 

(D)          the Buyer, the Company and the Sellers shall make such other deliveries
as are required by and in accordance with §7 hereof.

 

3.             Representations
and Warranties of the
Company and the Sellers. The
Company, with respect to the Company and its Subsidiaries, as applicable, and
each Seller, severally with respect to itself and not jointly with respect to
any of the other Sellers, hereby represent and warrant to the Buyer that the
statements contained in this §3 are correct and complete as of the date of this
Agreement and shall be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this §3), except as set forth in the disclosure
schedule accompanying this Agreement (the “Disclosure Schedule”).
The Disclosure Schedule shall be arranged in paragraphs corresponding to
the lettered paragraphs contained in this §3; provided,
however, that any event, fact or circumstance disclosed in any
lettered paragraph of the Disclosure Schedule shall be deemed to be a
disclosure for purposes of all other lettered paragraphs of the Disclosure
Schedule, to the extent the applicability of such disclosure is reasonably
ascertainable.

 

(a)  Authorization of Transaction.  The Company has full corporate power and
authority and each Seller has full power and authority to execute and deliver
this Agreement and to perform its obligations hereunder.  This Agreement constitutes the valid and
legally binding obligation of the Company and each Seller, enforceable in
accordance with its terms and conditions.

 

(b)  Noncontravention.  Other than as set forth on §3(b) of the
Disclosure Schedule, neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, shall (i) violate
any statute, regulation, rule, injunction, judgment, order, decree or ruling of
any government, governmental agency or court to which any of the Sellers, the
Company or its Subsidiaries is subject or any provision of the Constitutive
Documents of any of the Sellers, the Company or its Subsidiaries or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify
or cancel, or require any notice or consent under any agreement, contract,
lease, license or instrument to which any of the Sellers, the Company or any of
its Subsidiaries is a party or by which any of them are bound or to which any
of their assets are subject, except where the violation, conflict, breach,
default, acceleration, termination, modification, cancellation or failure to
give notice would not have a Material Adverse Effect or a material adverse
effect on the ability of the Sellers, the Company or any of its Subsidiaries to
consummate the transactions contemplated by this Agreement.  Except for applicable requirements of
Competition Laws, including the Hart-Scott-Rodino Act and the EC Merger

 

9

 

Regulation,
none of the Sellers, the Company or its Subsidiaries is required to give any
notice to, make any filing with, or obtain any authorization, consent or
approval of any government or governmental agency in order for the Sellers and
the Company to consummate the transactions contemplated by this Agreement,
except where the failure to give notice, to file or to obtain any
authorization, consent or approval would not have a Material Adverse Effect or
a material adverse effect on the ability of the Sellers or the Company to
consummate the transactions contemplated by this Agreement.

 

(c)  Brokers’
Fees.  Neither the Sellers, the
Company nor any of its Subsidiaries has any liability or obligation to pay any
fees or commissions to any broker, finder or investment banker with respect to
the transactions contemplated by this Agreement for which the Buyer could
become liable or obligated, except for the fee of J.P. Morgan Securities Inc.

 

(d)  Title.  Other than as set forth on §3(d) of the
Disclosure Schedule, the Company or one of its Subsidiaries has good and valid
title to, or a valid leasehold interest in, the material tangible personal
property that is reflected on the Most Recent Balance Sheet, free and clear of
any Security Interest other than Permitted Liens.

 

(e)  Capitalization.  §3(e) of the Disclosure Schedule sets
forth for the Company (A) the number of shares of authorized capital stock of
each class of its capital stock, (B) the number of issued and outstanding
shares of each class of its capital stock, and (C) the number of shares of its
capital stock held in treasury. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company is duly authorized to conduct business and is in good standing
under the laws of each jurisdiction where such qualification is required,
except where the lack of such qualification would not have a Material Adverse
Effect. The Company has full corporate power and authority to carry on the
businesses in which it is engaged and to own and use the properties owned and
used by it. All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid and
nonassessable.  Each Shareholder holds
of record and owns beneficially all of his or its Shares of the Company, free
and clear of any restrictions on transfer and Security Interests (other than
restrictions under the Securities Act and state securities laws and the
Stockholders Agreement). Except as set forth on §3(e) of the Disclosure
Schedule, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights or other
contracts or commitments that could require any Shareholder to sell, transfer
or otherwise dispose of any capital stock of the Company or that could require
the Company to issue, sell or otherwise cause to become outstanding any of its
capital stock (in each case, other than this Agreement and the Stockholders
Agreement).  There are no outstanding stock
appreciation, phantom stock or similar rights with respect to the Company.  Except for the Stockholders Agreement, there
are no voting trusts, proxies or other agreements or understandings with
respect to the voting of any capital stock of the Company.

 

(f)  Subsidiaries.
The Company does not have any ownership interest in any corporation,
partnership, limited liability company, joint venture or other Person other
than those entities set forth on §3(f) of the Disclosure Schedule.  Other than as set forth on §3(f) of the
Disclosure Schedule and other than director qualifying shares, all of the
equity interests of such entities are owned directly or indirectly by the
Company.  All of the issued and
outstanding shares of

 

10

 

common
stock or equity interests of each of the Company’s Subsidiaries have been duly
authorized, validly issued and are fully paid and nonassessable and are owned
beneficially and of record by the Company or another Subsidiary free and clear
of all liens, claims or other encumbrances or rights of third parties other
than liens and encumbrances relating to the Credit Agreement. There are no
outstanding options, warrants or rights to purchase or acquire any capital
stock or other equity interests of any of its Subsidiaries, and there are no
contracts, commitments, understandings, arrangements or restrictions by which
the Company or any of its Subsidiaries is bound to sell or issue any additional
shares of capital stock or equity interests of such Subsidiary.

 

(g)  Financial
Statements.  Attached hereto as Exhibit
A are the following financial statements (collectively the “Financial
Statements”): (i) the Company’s audited balance sheet and statements of
income, stockholders’ equity and cash flows as of and for the year ended
December 29, 2001 and December 28, 2002 (the “Most Recent Fiscal
Year End”) and (ii) the Company’s unaudited balance sheet and statements of
income and cash flows (the “Most Recent Financial Statements”) as of and
for the period beginning December 29, 2002 and ended November 30,
2003 (the “Most Recent Fiscal Month End”). The Financial Statements have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby and present fairly in all material respects the
financial condition of the Company as of such dates and the results of
operations of the Company for such periods, provided
that the Most Recent Financial Statements are subject to normal year
end adjustments and lack footnotes and other presentation items.

 

(h)  Absence of Certain Developments.  Except as set forth on §3(h) of the
Disclosure Schedule or otherwise contemplated by this Agreement, since the
Most Recent Fiscal Month End, there has not been any Material Adverse Effect.
In addition to the foregoing, since that date and except as set forth on §3(h)
of the Disclosure Schedule, the Company and its Subsidiaries have operated in
the Ordinary Course of Business and neither the Company nor any of its
Subsidiaries has:

 

(i)            borrowed
any amount or incurred any material liabilities, except amounts borrowed or
liabilities incurred in the Ordinary Course of Business or under contracts
entered into in the Ordinary Course of Business;

 

(ii)           mortgaged,
pledged or subjected to any material lien, charge or other encumbrance, any
material portion of its assets, except for Permitted Liens arising in the
Ordinary Course of Business;

 

(iii)          sold,
assigned, licensed or transferred any Owned Real Property, Leased Real Property
or any material portion of its other tangible assets, except in the Ordinary
Course of Business;

 

(iv)          sold,
assigned or transferred any material patents, trademarks, trade names,
copyrights, trade secrets or other intangible assets;

 

11

 

(v)           made
any material capital expenditures or commitments therefor outside the Ordinary
Course of Business or failed to make any material capital expenditures that
otherwise would have been made in the Ordinary Course of Business;

 

(vi)          entered
into, materially amended or modified, or waived any material rights with
respect to, any material agreement, contract, lease or license outside the
Ordinary Course of Business;

 

(vii)         issued,
sold or transferred any of its equity securities, securities convertible into
its equity securities or warrants, options or other rights to acquire its
equity securities, or any notes, bonds or debt securities;

 

(viii)        declared
or paid any dividend, made any distribution on its capital stock or equity
interests, redeemed or purchased any shares of its capital stock or equity
interests, or paid any management or other fees to any Shareholder or any
Affiliates of any Shareholder; provided, that
the Company may pay a cash dividend to the Shareholders as long as the amount
of such cash dividend is obtained solely from either (A) Cash of the Company
existing on January 3, 2004 and deducted from the definition of Closing
Cash Consideration or (B) Funded Indebtedness of the Company that is repaid at
or prior to the Closing (including any interest, expenses or fees incurred in
connection with the borrowing), and the payment of such cash dividend does not
subject the Company to any adverse Tax consequences, including any withholding
Tax obligation;

 

(ix)           increased
the compensation of any officer or other key management employee, or entered
into any material employment, severance, bonus or consulting agreement or other
material compensation agreement or caused or suffered any cancellation or
material amendment thereof, other than cost of living or merit increases
granted in the Ordinary Course of Business;

 

(x)            waived,
released, cancelled or forgiven any debts, claims or rights (or series of
debts, claims or rights) involving, individually or in the aggregate,
consideration in excess of $500,000;

 

(xi)           (A)
acquired (by merger, consolidation, acquisition of stock, other securities or
assets or otherwise), (B) made a capital investment in, (C) made a loan advance
or agreement to loan or advance to, (D) entered into any joint venture,
partnership or other similar arrangement for the conduct of business with, or
(E) guaranteed any indebtedness for borrowed money of, any Person or any
portion of the assets of any Person that constitutes a division or operating
unit of such Person;

 

(xii)          suffered
any theft, damage, destruction or casualty loss affecting its business or any
of their respective assets in excess of $250,000 in any single instance or
$500,000 in the aggregate, whether or not covered by insurance;

 

12

 

(xiii)         paid,
discharged, cancelled, compromised or satisfied any material liability other
than any such payment, discharge, cancellation, compromise or satisfaction made
in the Ordinary Course of Business;

 

(xiv)        commenced
or settled any material legal, administrative or arbitral proceeding;

 

(xv)         made
or changed any material Tax election, filed any amended material Tax Return,
entered into any material closing agreement or settled any material Tax claim
or assessment, surrendered any right to claim a refund of Taxes or consented to
any extension or waiver of the limitation period applicable to any material Tax
claim or assessment;

 

(xvi)        between
November 30, 2003 and January 3, 2004, either failed to manage its
working capital in the Ordinary Course of Business or suffered any material
reduction in working capital not in the Ordinary Course of Business; or

 

(xvii)       committed
to do any of the foregoing.

 

(i)  Undisclosed Liabilities. Neither the
Company nor any of its Subsidiaries has any liability (whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), except
for (i) liabilities set forth on the Most Recent Balance Sheet (including any
notes thereto), (ii) liabilities under agreements, contracts, leases, licenses
and other arrangements (x) listed in §3(m)(i) or §3(n) of the Disclosure
Schedule or (y) that were entered into in the Ordinary Course of Business
since November 30, 2003 that are not required to be listed on the
Disclosure Schedules, (iii) liabilities reflected on the Disclosure Schedule,
(iv) liabilities that have arisen in the Ordinary Course of Business, since
November 30, 2003, and (v) liabilities that, individually or in the
aggregate, would not have a Material Adverse Effect. Except as otherwise
disclosed in the Financial Statements, none of the Company or any of its
Subsidiaries is directly or indirectly liable upon or with respect to (by
discount, repurchase agreements or otherwise), or obliged in any other way to
provide funds in respect of, or to guarantee or assume, any debt, obligation or
dividend of any Person other than the Company or any of its wholly-owned
Subsidiaries, except endorsements in the ordinary course of business in
connection with the deposit, in banks or other financial institutions, of items
for collection.  Except as otherwise
disclosed in the Financial Statements, neither the Company nor any of its
Subsidiaries has any obligation for borrowed money, any obligation that is
evidenced by any note or other similar instrument or any capitalized lease
obligation.

 

(j)  Legal
Compliance.

 

(i)            Except
as set forth on §3(j) of the Disclosure Schedule, the Company and its
Subsidiaries are in compliance with all applicable statutes, laws, ordinances,
rules, orders and regulations of federal, state, local and foreign governments
(and all agencies thereof), except where the failure to comply would not have a
Material Adverse Effect. Except as set forth on §3(j) of the Disclosure
Schedule, neither of the Company nor any

 

13

 

of its Subsidiaries has received any communication (written or, to the
Knowledge of the Company, oral) from any governmental authority or any other
Person that alleges that either of the Company or any of its Subsidiaries is
not in compliance with all applicable foreign, federal, state or local laws,
rules or regulations, except where such communication alleges a failure to
comply that would not reasonably be expected to have a Material Adverse Effect.

 

(ii)           The
Company and its Subsidiaries have obtained each material permit, approval,
consent, authorization, license, variance, or permission required under any
applicable statutes, laws, ordinances, rules, orders and regulations of
federal, state, local and foreign governments (and all agencies thereof) that
is necessary or appropriate for the operations of the Company and its
Subsidiaries, except in the case where the failure to have such permit,
approval, consent, license, variance or permission would not reasonably be
expected to have a Material Adverse Effect. Each such material permit,
approval, consent, authorization, license, variance, and permission, is in full
force and effect and no proceeding is pending or, to the Knowledge of Sellers,
threatened, to revoke or limit any such permit, approval, consent,
authorization, license, variance, or permission, except for failures to be in
full force and effect, revocations or limitations that would not reasonably be
expected to have a Material Adverse Effect. Except as set forth in §3(j) of the
Disclosure Schedule:

 

(A)          the Company or its Subsidiaries (as applicable) is, and at all times
since November 30, 2003 have been, in compliance with all of the terms and
requirements of each such material permit, approval, consent, authorization,
license, variance, and permission, except where failure to comply would not
reasonably be expected to have a Material Adverse Effect; and

 

(B)           since November 30, 2003, neither the Sellers nor the Company or
its Subsidiaries has received any communication (written or oral) from any
governmental authority or any other Person regarding (y) any actual, alleged,
possible, or potential violation of or failure to comply with any term or
requirement of any such material permit, approval, consent, authorization,
license, variance, or permission, or (z) any actual, proposed, possible, or
potential revocation, withdrawal, suspension, cancellation, termination of, or
modification to any such permit, approval, consent, authorization, license,
variance, or permission, except where such communication relates to matters
that would not reasonably be expected to have a Material Adverse Effect.

 

(k)  Tax Matters.
Except as set forth on §3(k) of the Disclosure Schedule:

 

(i)            Each
of the Company and its Subsidiaries has timely filed all material Tax Returns
required to be filed by it, and each of the Company and its Subsidiaries has
paid all material Taxes due and payable by it.

 

14

 

(ii)           No
material deficiency or proposed adjustment relating to Taxes that has not been
resolved or settled has been proposed, asserted or assessed by any taxing
authority against the Company or any of its Subsidiaries.

 

(iii)          The
Company and its Subsidiaries have withheld and paid all material Taxes required
to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, shareholder or other third party.

 

(iv)          §3(k)
of the Disclosure Schedule lists those Tax Returns that currently are the
subject of audit or for which written notice of intent to audit has been
received. The Company has made available to the Buyer copies of all Tax Returns
filed and all examination reports and written statements of deficiencies
assessed against or agreed to by the Company or any of its Subsidiaries since
January 1, 2001.

 

(v)           Neither
the Company nor any of its Subsidiaries has waived any statute of limitations
in respect of material Taxes or agreed to any extension of time with respect to
a material Tax assessment or deficiency.

 

(vi)          Neither
the Company nor any of its Subsidiaries is a party to any Tax allocation or
sharing agreement with any Person.

 

(vii)         No
claim has been made by any Tax authority in a jurisdiction where the Company
(or any of its Subsidiaries, as applicable) does not currently file a Tax
Return that it is or may be subject to Tax by such jurisdiction.

 

(viii)        None of
the Company or any of its Subsidiaries has any outstanding request for an
extension of time within which to pay any material Taxes or file any material
Tax Returns.

 

(ix)           None
of the Company or any of its Subsidiaries is a party to any agreement,
contract, arrangement or plan that has resulted or would result, separately or
in the aggregate, in (A) the payment of any “excess parachute payment” within
the meaning of § 280G of the Code or (B) the loss of any deduction under
§ 162(m) of the Code.

 

(x)            The
Company is not, and has not been at any time during the applicable period
specified in § 897(c)(l)(A)(ii) of the Code, a “United States real
property holding corporation” within the meaning of § 897(c)(2) of the
Code.

 

(1)  Real Property and Assets.

 

(i)            §3(l)(i)
of the Disclosure Schedule lists and describes briefly all real property
owned by the Company or any of its Subsidiaries (the “Owned Real Property”).
With respect to each such parcel of Owned Real Property and except for matters
that would not be reasonably expected to have a Material Adverse Effect or as
otherwise disclosed on §3(l)(i) of the Disclosure Schedule: (a) the Company or
its Subsidiaries has good and marketable fee simple title to the parcel and the
improvements located thereon,

 

15

 

free and clear of all Security Interests, except Permitted Liens; (b)
there are no leases, subleases, options or other agreements, written or oral,
granting to any party or parties the right of use or occupancy or the right to
otherwise obtain title of such parcel or any portion thereto (except for which
public notice has been provided or has been disclosed in a survey); and (c)
there are no parties (other than the Company and/or any of its Subsidiaries)
who are in possession of or who are using any such parcel.

 

(ii)           §3(l)(ii)
of the Disclosure Schedule lists all real property leased or subleased by
the Company and/or any of its Subsidiaries (the “Leased Real Property”).
The Company has made available to the Buyer a correct and complete copy of the
leases and subleases and all material amendments for the Leased Real Property
(the “Real Property Leases”). To the Knowledge of the Company, each
lease and sublease for the Leased Real Property is valid, binding, enforceable
and in full force and effect in all material respects, and neither the Company
nor any of its Subsidiaries has received a current notice of default under any
such lease or sublease and the Company has not received any notice indicating
that any other party to such leases is in material default, except where the
invalidity, nonbinding nature, unenforceability, ineffectiveness or default
would not be reasonably expected to have a Material Adverse Effect.

 

(iii)          The
Leased Real Property and Owned Real Property comprise all of the material real
property currently used in connection with the conduct of the business of the
Company and any of its Subsidiaries.

 

(m)  Intellectual Property.

 

(i)            §3(m)(i)
of the Disclosure Schedule identifies each patent or registered
Intellectual Property, or application therefor, owned by the Company or any of
its Subsidiaries, and each material written license or other agreement or
material oral agreement that would be reasonably considered to exist (excluding
off-the-shelf software license agreements) pursuant to which the Company or any
of its Subsidiaries has granted to any third party, or has been granted by any
third party, any rights in the Intellectual Property.

 

(ii)           With
respect to each material item of Intellectual Property other than the license
agreements identified in §3(m)(i) of the Disclosure Schedule, and except as
otherwise indicated on §3(m)(i) of the Disclosure Schedule:

 

(A)          the Company and/or its Subsidiaries owns all right, title and interest
in and to such item of Intellectual Property, free and clear of any Security
Interest, license or other restriction;

 

(B)           to the Knowledge of the Company, such item of Intellectual Property is
not subject to any outstanding injunction, judgment, order, decree, ruling or
charge; and

 

16

 

(C)           no action, suit, proceeding, hearing, investigation, written claim or
written demand is pending or, to the Knowledge of the Company, is threatened
which challenges the legality, validity, enforceability, use or ownership of
such item of Intellectual Property;

 

(iii)           With respect to each agreement identified in §3(m)(i) of the Disclosure
Schedule:

 

(A)          neither the Company nor any of its Subsidiaries, nor to the Knowledge
of the Company, any other party to any such agreement is in material breach or
default thereof; and

 

(B)           neither the Company nor any of its Subsidiaries has repudiated any
provision thereof, nor has the Company received any notice that any other party
to any such agreement has repudiated any provision thereof; and

 

(C)           each such agreement is in full force and effect as to the Company or
any of its Subsidiaries, and the Company has not received any notice that would
indicate that any such agreement is not in full force and effect as to each
other party thereto.

 

(iv)          Neither the Company nor any of its Subsidiaries has received notice of
any claim that it is infringing the Intellectual Property of any third party
that would have a material effect on the Company or its Subsidiaries, and the
Company has no Knowledge of any infringement by any third party of any material
Intellectual Property owned or used by the Company or any of its Subsidiaries.

 

(n)  Contracts.  §3(n) of the Disclosure Schedule lists
the following written agreements, or material oral agreements that would be
reasonably considered to exist that were entered into and known by the Company,
to which the Company or its Subsidiaries is a party:

 

(i)            any agreement for the lease of personal or
real property to or from any Person providing for lease payments in excess of
$1,000,000 per annum;

 

(ii)           any agreement for the purchase of products or services (in each case,
other than agreements evidenced by purchase orders), under which the
undelivered balance of such products and services has a selling price in excess
of $2,500,000;

 

(iii)          any agreement for the sale of products or services (in each case, other
than agreements evidenced by purchase orders), under which the undelivered
balance of such products or services has a sales price in excess of $2,500,000;

 

(iv)          any agreement concerning a partnership or joint venture;

 

(v)           any agreement under which it has created, incurred, assumed or
guaranteed any indebtedness for borrowed money in excess of $1,000,000 or any

 

17

 

capitalized lease obligation, in excess of $250,000
or under which it has imposed a Security Interest on any of its assets,
tangible or intangible;

 

(vi)          any non-competition agreement which materially restricts the ability of
the Company or any of its Subsidiaries to freely conduct its business;

 

(vii)         any agreement with any of the Sellers and their Affiliates which will
survive the Closing, the default of which would result in a Material Adverse
Effect;

 

(viii)        any collective bargaining agreement;

 

(ix)           any agreement for employment on a full-time, part-time, consulting or
other basis with respect to any individual who received total compensation in
2002 in excess of $250,000 or who has an annual base compensation for 2003 in
excess of $250,000, or any agreement providing severance benefits to any such
person in excess of $250,000;

 

(x)            any agreement under which it has advanced or
loaned any amount to any of its directors, officers, managers and Employees
outside the Ordinary Course of Business;

 

(xi)           any other agreement, the default of which would result in a Material
Adverse Effect; or

 

(xii)          any agreement regulating or controlling or otherwise affecting the
voting or disposition of any capital stock or other proprietary interest of the
Company or any of its Subsidiaries and any shareholder agreement or agreement
relating to the issuance of any securities of the Company or any of its
Subsidiaries or the granting of any registration rights with respect thereto
and which agreement does not terminate at or prior to Closing.

 

The Company has made available to the Buyer a correct and complete copy
of each written agreement or a summary of each material oral agreement listed
in §3(n) of the Disclosure Schedule. Each such agreement is a valid and binding
agreement of the Company or one of its Subsidiaries, as the case may be, and is
in full force and effect and the Company has not received any notice that any
such agreement is not a valid and binding agreement of each other party
thereto. Neither the Company nor any of its Subsidiaries, and the Company has
not received any notice that any other Person party thereto, is in default
under any such agreements, and no event has occurred, or, to the Knowledge of
the Company, is alleged to have occurred, which constitutes or with lapse of
time or giving of notice or both, would constitute a default under any such
agreement, except, in each case, for such defaults which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

(o)  Insurance.
§3(o) of the Disclosure Schedule describes each material insurance policy
maintained by or on behalf of the Company or any of its Subsidiaries. All of
such insurance policies are in full force and effect, and to the Knowledge of
the Company, the Company and its Subsidiaries are not in material default with
respect to their obligations under any of such

 

18

 

insurance
policies. To the Company’s Knowledge, there are no material claims by the
Company or any of its Subsidiaries under any of such policies relating to the
business, assets or properties of the Company or its Subsidiaries as to which
any insurance company is denying liability or defending under a reservation of
rights or similar clause.

 

(p)  Litigation.
§3(p) of the Disclosure Schedule sets forth each instance in which the
Company or any of its Subsidiaries or any of their respective property and
assets (i) is subject to any outstanding injunction, judgment, order, decree or
ruling or (ii) is a party or, to the Knowledge of the Company, is threatened to
be made a party, to any action, suit, proceeding, hearing or investigation of,
in or before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction or before any arbitrator, except
where such injunction, judgment, order, decree, ruling, action, suit,
proceeding, hearing or investigation is not reasonably expected to have a
Material Adverse Effect.

 

(q)  Employees.
§3(q) of the Disclosure Schedule sets forth each material collective
bargaining agreement or similar written understanding to which the Company or
any of its Subsidiaries is a party. Except as set forth in §3(q) of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries is
currently experiencing, or has experienced within the past three years, (i) any
strike, picketing, or work stoppage, or (ii) any material grievance, claim of
unfair labor practices or other collective bargaining dispute, and, to the
Knowledge of the Company, nothing contained in clauses (i) and (ii) have been
threatened with respect to any employees employed by the Company or any of its
Subsidiaries. The Company believes that its employee relations are
satisfactory.

 

(r)  Employee Benefits.

 

(i)            §3(r)
of the Disclosure Schedule sets forth all of the current material Employee
Pension Benefit Plans, Employee Welfare Benefit Plans and all other material
employee benefits, compensation and fringe benefit plans, policies and programs
maintained or contributed to by the Company or any of its Subsidiaries with
respect to current or former employees of the Company or any of its
Subsidiaries (the “Plans”). The Company has provided or made available
to the Buyer (a) a copy of each of the Plans, including all amendments thereto,
(b) any trust agreements thereunder, (c) each summary plan description, (d) the
most recent favorable determination letter issued by the Internal Revenue
Service, if applicable, and (3) the most recent actuarial valuation with respect
to any Plan covered by Title IV of ERISA.

 

(ii)           Each
Plan is in compliance in all material respects with the applicable requirements
of law, including, if applicable, ERISA and the Code.

 

(iii)          Each
Plan which is intended to qualify under §401 (a) of the Code has received a
favorable determination letter that it is so qualified, and, to the Knowledge
of the Company, there exist no facts or circumstances which would cause any of
such favorable determination letters to be revoked.

 

19

 

(iv)          All
material contributions required to have been made by the Company or any of its
Subsidiaries to any Plan under the terms of any such Plan or pursuant to any
applicable collective bargaining agreement or applicable law (including,
without limitation, ERISA and the Code) have been timely made in all material
respects.

 

(v)           Except
as set forth on §3(r)(v) of the Disclosure Schedule, none of the Plans is a
“multiemployer plan” as defined in Section 3(37) of ERISA, and neither the
Company nor any of its Subsidiaries has withdrawn at any time within the
preceding six years from any multiemployer plan, and incurred any material
withdrawal liability which remains unsatisfied.

 

(vi)          No
Plan that is subject to Section 302 of ERISA or Section 412 of the
Code has incurred any material “accumulated funding deficiency” within the
meaning of Section 302 of ERISA or Section 412 of the Code, whether
or not waived, and no material liability (other than for annual premiums) to
the Pension Benefit Guaranty Corporation has been incurred by the Company or
any of its Subsidiaries with respect to any such Plan. There has been no
“reportable event” within the meaning of Section 4043 of ERISA with
respect to any Plan subject to Title IV of ERISA which would require the giving
of notice or any other event requiring disclosure under
Section 4041(c)(3)(C) or 4063(a) of ERISA.

 

(vii)         Neither
the Company nor any of its Subsidiaries has incurred any material liability
pursuant to Title IV of ERISA as a result of any of them being treated as a
single employer, within the meaning of Section 414(b) or 414(c) of the
Code, with any other trade or business other than the Company or any of its
Subsidiaries, and to the Knowledge of the Company, no facts exist which could
reasonably form the basis for any such material liability.

 

(viii)        Except
as set forth on §3(r)(viii) of the Disclosure Schedule, neither the Company nor
any of its Subsidiaries or any Plan has any present or future obligation to
make any material payment to, or with respect to any present or former employee
of the Company or any of its Subsidiaries pursuant to, any retiree medical
benefit plan.

 

(ix)           The
most recent actuarial report prepared for each Plan covered by Title IV of
ERISA accurately sets forth the fair value of the assets and liabilities, based
on the actuarial assumptions contained in such report, of each such Plan, and,
since the date of such report, no event has occurred that has had, or would
reasonably be expected to have, a material adverse effect on the funded status
of any such Plan.

 

(s)  Environmental Matters.

 

(i)            Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, each of the Company and its Subsidiaries is in material
compliance with all applicable Environmental Laws. The Company and its
Subsidiaries have

 

20

 

obtained, and are in material compliance with, all material permits and
authorizations required under applicable Environmental Laws.

 

(ii)           Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, and except for such releases as occur pursuant to
environmental permits or as otherwise authorized by Environmental Laws, to the
Knowledge of the Company: (A) there are and have been no material releases or
threatened releases of Hazardous Substances at, on, or into any real property
currently owned or leased by the Company or its Subsidiaries, and (B) there are
and have been no material releases or threatened releases of Hazardous
Substances at, on, or into any real property formerly owned or leased, by the
Company or its Subsidiaries that could, in either (A) or (B), be reasonably
expected to result in liability, expense or obligation of the Company or its
Subsidiaries of $5.0 million or more, individually or in the aggregate, under
any Environmental Law.

 

(iii)          Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, none of the Company and any of its Subsidiaries is a
party, whether as a direct signatory or as successor, assign or, to the
Knowledge of the Company, otherwise bound, to any agreement under which the
Company or its Subsidiaries is obligated by any representation, warranty,
indemnification, covenant, restriction or other undertaking concerning
compliance with Environmental Laws that could be reasonably expected to result
in material liability, expense or obligation of the Company or its
Subsidiaries.

 

(iv)          Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries has
received from any governmental authority or other party any written notice of
violation or alleged violation of, non-compliance with, liability or potential
liability under Environmental Laws, other than notices in respect of
violations, non-compliance or liability that would not be reasonably expected
to have a Material Adverse Effect.

 

(v)           The
Company and its Subsidiaries have not owned or operated at any property or
facility except those set forth or referenced on §3(s) of the Disclosure
Schedule; provided, that the
Company makes no representation or warranty under this clause (v) with regard
to any property or facility prior to its acquisition by the Company or its
Subsidiaries or with respect to any property or facility owned by a Subsidiary
prior to the acquisition of such Subsidiary by the Company or its Subsidiaries.

 

(vi)          Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, no judicial proceeding or governmental or administrative
action is pending or, to the Knowledge of the Company, threatened, under any
Environmental Law pursuant to which the Company or any of its Subsidiaries is
or is reasonably expected to

 

21

 

be named as a party and which, if adversely determined, would
reasonably be expected to result in a Material Adverse Effect.

 

(vii)         Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries has
entered into any agreement with any party or is subject to any order or decree
from any governmental authority pursuant to which the Company or any of its
Subsidiaries has assumed responsibility for the remediation of any condition
resulting from the release, treatment, storage or disposal of Hazardous
Substances, except for any such agreements, orders or decree that has been
fully satisfied, discharged, or otherwise terminated and no longer poses a
material threat of liability, expense or obligation to the Company and its
Subsidiaries or the performance of which would not be reasonably expected to
result in a Material Adverse Effect.

 

(viii)        The
Company has provided or made available to Buyer or its representatives copies
of all (i) material notices, demands, claims or actions against the Company or
the Subsidiaries pursuant to any Environmental Law and (ii) material reports
and documentation, in each case issued in the past three years and within the
Company’s or any of its Subsidiaries possession, related to all material
investigations, audits or assessments of environmental conditions at any
property or facility that the Company or any of its Subsidiaries owns or
operates or the Company’s or any of its Subsidiaries’ compliance with
Environmental Law.

 

(ix)           Except
as described in or referred to in the reports and other documents listed in
§3(s) of the Disclosure Schedule or as otherwise disclosed in §3(s) of the
Disclosure Schedule, to the Knowledge of the Company, there are no
Asbestos-Containing Materials contained in the Company’s products. There is no
pending or, to the Company’s Knowledge, threatened claim against the Company or
any of its Subsidiaries involving, relating to, or arising out of Asbestos or
any Asbestos-Containing Material or the exposure to or release thereof.

 

(x)            This
§3(s) contains the sole and exclusive representations and warranties of the
Company and the Sellers with respect to any environmental matters (with respect
to the Company and its Subsidiaries), including, without limitation, any
arising under any Environmental Requirements or relating to Hazardous
Substances.

 

(t)  Certain Business Relationships
with the Company. Except as disclosed in the notes to the Financial
Statements or §3(t) of the Disclosure Schedule, none of the Sellers or any of
their respective Affiliates or any officer or director of the Company or any of
its Subsidiaries have been involved in any material business arrangement or
relationship with the Company or any of its Subsidiaries within the past 24
months, other than in his, her or its capacity as a director, officer, employee
or securityholder of the Company or any of its Subsidiaries.

 

(u)  Products Liability. Except as set forth on
§3(u) of the Disclosure Schedule, there are not presently pending or, to the
Knowledge of the Company, threatened, civil, criminal or

 

22

 

administrative
actions, suits, demands, claims, hearings, notices of violation,
investigations, proceedings or demand letters relating to any alleged hazard or
alleged defect in design, manufacture, materials or workmanship including,
without limitation, any failure to warn or alleged breach of express or implied
warranty or representation, relating to any product manufactured, distributed
or sold by or on behalf of the Company or any of its Subsidiaries that would
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. §3(u) of the Disclosure Schedule sets forth a true and
complete list of all material product recalls or material written post-sales
warnings involving a product line of the Company or its Subsidiaries, as
opposed to warranty claims in the Ordinary Course of Business (“Recalls”)
and any pending investigations being conducted by the Company, any of its
Subsidiaries or, to the Company’s Knowledge, by any other Person or
governmental or regulatory agency concerning a material Recall relating to any
product manufactured, distributed or sold by or on behalf of the Company or any
of its Subsidiaries.

 

(v)  Customers and Suppliers. §3(v) of the
Disclosure Schedule sets forth a true and correct list of (a) the 10
largest customers of the Company and its Subsidiaries on a consolidated basis
in terms of gross sales during the nine month period ended September 27,
2003 and (b) the 10 largest suppliers of the Company and its Subsidiaries on a
consolidated basis in terms of gross purchases during the nine month period
ended September 27, 2003. Except as otherwise set forth on § 3(v) of
the Disclosure Schedule, there are no ongoing discussions or negotiations with
any of the customers or suppliers involving or in respect of any material price
increases in any of the Company’s or any Subsidiary’s inputs or material price
or volume decreases in any of the Company’s or any Subsidiary’s outputs, in
either case, the net effect of which could reasonably be expected to have a
Material Adverse Effect. Except as otherwise set forth on § 3(v) of the
Disclosure Schedule, since November 30, 2003, there has not been any
termination of, or material and adverse modification, amendment or change to,
any business relationship maintained by the Company or any of its Subsidiaries
with any customer or supplier named in §3(v) of the Disclosure Schedule, and no
such customer or supplier has provided the Company or any of its Subsidiaries
with notice of an intent to terminate or make a material and adverse
modification, amendment or change to its business relationship with the Company
or such Subsidiary, as the case may be. As of the date of this Agreement, and
other than as disclosed on §3(v) of the Disclosure Schedule, no customer or
supplier named in §3(v) of the Disclosure Schedule has given the Company
or any of its Subsidiaries written notice that it is subject to any bankruptcy,
insolvency or similar proceeding.

 

(w)  Prohibited Payments. The Company and its
Subsidiaries have not, directly or indirectly, (i) made or agreed to make any
contribution, payment or gift to any government official, employee or agent
where either the contribution, payment or gift or the purpose thereof was
illegal under the laws of any federal, state, local or foreign jurisdiction,
(ii) made or agreed to make any contribution, or reimbursed any political gift
or contribution made by any other Persons, to any candidate for federal, state,
local or foreign public office or (iii) paid or delivered any fee, commission
or any other sum of money or item of property, however characterized, to any
finder, agent, government official or other party, in the United States or any
other country, which in any manner relates to the assets, business or
operations of the Company or its Subsidiaries, which, in the case of each of
(i) (ii) or (iii), to the Company’s Knowledge, was

 

23

 

illegal
under any federal, state or local laws (or any rules or regulations thereunder)
of the United States or any other country having jurisdiction.

 

4.             Representations
and Warranties of the
Buyer.  The Buyer represents and warrants to the
Sellers that the statements contained in this §4 are correct and complete as of
the date of this Agreement and shall be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this §4).

 

(a)  Organization of the Buyer.  The Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation.

 

(b)  Authorization of Transaction.  The Buyer has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of the Buyer, enforceable in
accordance with its terms and conditions.

 

(c)  Noncontravention.  Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, shall (i) violate any statute,
regulation, rule, injunction, judgment, order, decree or ruling of any
government, governmental agency or court to which the Buyer is subject or any
provision of its charter or bylaws or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify or cancel, or require any
notice under any agreement, contract, lease, license or instrument to which the
Buyer is a party or by which it is bound or to which any of its assets is
subject, except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation or failure to give notice would not
have a material adverse effect on the ability of the Buyer to consummate the
transactions contemplated by this Agreement. 
Except for applicable requirements of Competition Laws, including the
Hart-Scott-Rodino Act and the EC Merger Regulation, the Buyer is not required
to give any notice to, make any filing with, or obtain any authorization,
consent or approval of any government or governmental agency in order for the
Buyer to consummate the transactions contemplated by this Agreement, except
where the failure to give notice, to file, or to obtain any authorization,
consent or approval would not have a material adverse effect on the ability of
the Buyer to consummate the transactions contemplated by this Agreement.

 

(d)  Brokers’
Fees.  The Buyer has no
liability or obligation to pay any fees or commissions to any broker, finder, investment
banker or agent with respect to the transactions contemplated by this Agreement
for which any Seller could become liable or obligated.

 

(e)  Availability of Funds. The Buyer has
delivered to the Company complete and correct executed copies of the documents
listed in §4(e) of the Disclosure Schedule and all other letters,
agreements and other documents, excluding any agreements or understandings with
respect to fees (the “Commitments”), issued to the Buyer or to which the
Buyer is a party in connection with (a) the debt financing of the transactions
contemplated hereby (the “Debt Financing”) and (b) the equity investment
by Warburg Pincus Private Equity, VIII, L.P. and/or one or more of its
Affiliates in the transactions contemplated hereby (the “Equity Financing”).  Assuming

 

24

 

satisfaction
of all applicable conditions set forth in the Commitments and full funding
thereunder of all amounts available under the terms of the Commitments, at the
Closing Date, the Buyer will have sufficient funds to consummate the
transactions contemplated hereby. The Buyer has no reason to believe that cash
shall not be available for the Equity Financing or that the Debt Financing
shall not be funded, and the Buyer has not made any material misrepresentation
in connection with obtaining the Commitments. Buyer shall not modify, amend,
terminate or revoke the Commitments if the effect of such action would
reasonably be likely to prevent the Buyer from receiving the Debt Financing or
the Equity Financing in accordance with the Commitments.

 

(f)  Acquisition of the Shares for
Investment.  The Shares
purchased by the Buyer pursuant to this Agreement are being acquired for
investment only and not with a view to any public distribution thereof, and the
Buyer shall not offer to sell or otherwise dispose of such Shares in violation
of any of the registration requirements of the Securities Act or any comparable
state or foreign securities laws.

 

(g)  Other
Matters.  To the knowledge of
Buyer, no supplier or customer of the Company or its Subsidiaries is reasonably
likely to seek to materially and adversely amend, modify or terminate its
existing relationship following the entering into this Agreement by Buyer and
the Company or the announcement or consummation of the transactions
contemplated hereby, specifically as a result of the participation by Buyer and
its affiliates in the transactions contemplated by this Agreement.

 

5.             Pre-Closing
Covenants.  The
Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing.

 

(a)  General.  Each of the Parties shall use commercially
reasonable best efforts to take all action and to do all things necessary,
proper or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in §7 below).

 

(b)  Notices and Consents.  The Sellers and the Company shall use
commercially reasonable best efforts to obtain any third party consents that
are required to be obtained in connection with the consummation of the
transaction. Each of the Parties shall give any notices to, make any filings
with, and use commercially reasonable best efforts to obtain any
authorizations, consents and approvals of governments and governmental agencies
which are required to be given, made or obtained in connection with
consummation of the transaction. 
Without limiting the generality of the foregoing, each of the Parties shall
file any notices or other material required under Competition Laws, including
any Notification and Report Forms and related material that it may be required
to file with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the Hart-Scott-Rodino Act and filings
with the European Commission under the EC Merger Regulation, and each of the
Parties shall use commercially reasonable efforts to obtain a waiver from any
applicable waiting periods related thereto, and shall make any further filings
pursuant thereto that may be necessary, proper or advisable in connection
therewith.  Each of the Parties shall
bear its own costs and

 

25

 

expenses
in preparing such filings; provided that
the Buyer shall pay all filing fees required under the Hart-Scott-Rodino Act,
the EC Merger Regulation or other Competition Laws.

 

(c)  Operation of Business.  Neither the Company nor any of its
Subsidiaries shall engage in any practice, take any action, or enter into any
transaction of the sort described in §3(h) above, except as expressly
contemplated by this Agreement.

 

(d)  Equity Issuances; Dividends and
Distributions.  The
Company shall not (i) issue, sell or deliver any shares of its capital stock or
issue or sell any securities convertible into, or options with respect to, or
warrants to purchase or rights to subscribe for, any shares of its capital
stock, (ii) effect any recapitalization, reclassification, stock dividend, stock
split or like change in its capitalization, (iii) amend its articles of
incorporation or bylaws, (iv) make any redemption or purchase of any shares of
its capital stock, (v) declare or pay any dividend or make any distribution on
its capital stock or equity interests, or (vi) pay any management or other fees
to the Shareholders or any of their Affiliates; provided, that the Company may pay a cash dividend to the
Shareholders as long as the amount of such cash dividend is obtained solely
from either (A) Cash of the Company existing on January 3, 2004 and
deducted from the definition of Closing Cash Consideration or (B) Funded
Indebtedness of the Company that is repaid at or prior to the Closing
(including any interest, expenses or fees incurred in connection with the
borrowing), and the payment of such cash dividend does not subject the Company
to any adverse Tax consequences, including any withholding Tax obligation;

 

(e)  Restrictions on Transfer.  Prior to Closing, the Sellers shall not
sell, transfer, contribute, distribute or otherwise dispose of any Shares, or
agree to do any of the foregoing.

 

(f)  Preservation of Business.  The Company and its Subsidiaries shall use
commercially reasonable efforts to keep their respective businesses and
properties substantially intact, including their present operations, physical
facilities, working conditions, and relationships with lessors, licensors,
suppliers, customers and employees.

 

(g)  Access to Books and Records and
Customers and Suppliers. 
The Company and its Subsidiaries shall permit representatives of the
Buyer to have reasonable access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Company or its
Subsidiaries, to the premises, properties, personnel, books, records (including
tax records), contracts and documents of or pertaining to the Company and its
Subsidiaries, including, without limitation, reasonable access to any
properties of the Company or any Subsidiary for the purpose of conducting environmental
audit or assessment, including the taking of reasonable samples from soils,
groundwaters, surface waters, soils, and air; provided,
however, that all such requests for access shall be directed to, and
shall be approved by, the Company or such other person as the Sellers may
designate from time to time. Notwithstanding the foregoing sentence, including
the proviso therein, if, on or after March 1, 2004, the Buyer and the
Sellers reasonably determine in good faith that Frank Nasisi is unlikely to be
able to participate in the financing efforts of the Buyer beginning on or about
the date the roadshow for the contemplated high yield financing is
then-scheduled to begin (as confirmed by the placement agent for such
offering), a representative of the Buyer shall be entitled to be present at the
Company’s offices at all reasonable times and shall be provided with reasonable
office space and support (including telephone and facsimile),

 

26

 

and
such representative shall be entitled to attend as an observer (with no power
or ability to make any decisions on behalf of the Company) such internal
management meetings of the Company as he may reasonably request for the purpose
of becoming familiar with the Company’s business and operations. Prior to the
Closing, the Buyer shall not contact or otherwise communicate with the
customers, employees or suppliers of the Company or any of its Subsidiaries in
connection with the transactions contemplated by this Agreement or in
connection with its observer rights, if any, provided in the immediately
preceding sentence, directly or indirectly, without the prior written consent
of the Sellers. The Buyer reaffirms its obligations under the confidentiality
agreement between the Buyer and the Company, as supplemented (the “Confidentiality
Agreement”), previously executed and delivered in connection with this
transaction.

 

(h)  Notice of Developments.

 

(i)            The
Sellers may elect (x) at any time to notify the Buyer of any development reasonably
likely to cause a breach of any of the representations and warranties in
§3(f)-(w) above and (y) on one occasion, to provide to the Buyer (A) the
updates to the environmental reports listed on §5(h)(i) of the Disclosure
Schedule and (B) a Phase 1 environmental report on the facility located in
Prachinburi, Thailand. Buyer shall have 10 days following the receipt of such
environmental reports to notify the Sellers that it needs up to an additional
20 days to conduct further investigations with respect to the matters set forth
on such environmental reports. Unless the Buyer has the right to terminate this
Agreement pursuant to §9(a)(ii) below by reason of such development, notice or
delivery and exercises that right within the period of 30 days referred to in
§9(a)(ii) below, the written notice or delivery of such environmental reports
pursuant to this §5(h)(i) shall be deemed to have amended the Disclosure
Schedule, to have qualified the representations and warranties contained in §3
above, and to have cured any misrepresentation or breach of warranty that
otherwise might have existed hereunder by reason of such development or notice
or lack of delivery.

 

(ii)           Each
Party shall give prompt written notice to the other Party of any material
adverse development causing or reasonably expected to result in (i) such
Party’s failure to satisfy the conditions to the other Party’s obligation to
consummate the transactions contemplated in this Agreement in §7(a) or §7(b),
as applicable, or (ii) a breach of any of such Party’s own representations and
warranties in §3(a)-(e) and §4 above, as applicable. No disclosure by any Party
pursuant to this §5(h)(ii), however, shall be deemed to amend or supplement the
Disclosure Schedule or to prevent or cure any misrepresentation or breach
of warranty.

 

(iii)          Prior
to the Closing, the Buyer shall act in good faith to notify the Sellers if the
Buyer reasonably determines that any condition to closing under §7(a) that has
not been satisfied is not reasonably likely to be satisfied at or prior to the
Closing.

 

(i)  No Additional Representations or
Warranties. The Buyer acknowledges that the Sellers, the Company
and its Subsidiaries have not made any representation or warranty, express or
implied, as to the accuracy or completeness of any information regarding the
Sellers, the

 

27

 

Company
or its Subsidiaries, except as expressly set forth in this Agreement or the
Disclosure Schedule, and the Buyer further agrees that the Sellers, the Company
and its Subsidiaries shall not have or be subject to any liability to the Buyer
or any other Person resulting from the distribution to the Buyer, or the
Buyer’s use of, any such information, including, without limitation, the
Descriptive Memorandum prepared by J.P. Morgan Securities Inc. and any
information, document or material provided to or made available to the Buyer in
any “data room,” management presentations or any other form in expectation of
the transactions contemplated by this Agreement. Except for the representations
and warranties expressly set forth in §3, as qualified or supplemented by the
Disclosure Schedule, the Sellers, the Company and its Subsidiaries make no
representation or warranty, express or implied, at law or in equity, in respect
of the Sellers, the Company, its Subsidiaries or any of their respective
assets, liabilities or operations, including, without limitation, any implied
representation or warranty as to the condition, merchantability, suitability or
fitness for a particular purpose, and expressly disclaim any such
representation or warranty. Except for the express representations and
warranties set forth in §3, as qualified or supplemented by the Disclosure
Schedule, the Buyer agrees that it is purchasing the Shares and acquiring the
Company and its Subsidiaries on an “as is” and “where is” basis.

 

(j)  Disclaimer Regarding Estimates
and Projections.  In
connection with the Buyer’s investigation of the Company and its Subsidiaries,
the Buyer has received from the Sellers and/or the Company certain estimates,
forecasts, plans and financial projections of the Company and its Subsidiaries.
The Buyer acknowledges that there are uncertainties inherent in attempting to
make such estimates, forecasts, plans and projections, that the Buyer is
familiar with such uncertainties, that the Buyer is taking full responsibility
for making its own evaluation of the adequacy and accuracy of all estimates,
forecasts, plans and projections so furnished to it (including the
reasonableness of the assumptions underlying such estimates, forecasts, plans
and projections), and that the Buyer shall have no claim against the Sellers
and/or the Company or its Subsidiaries with respect thereto. Accordingly, the
Sellers, the Company and its Subsidiaries make no representation or warranty
with respect to such estimates, forecasts, plans and projections (including any
such underlying assumptions).

 

(k)  Financing.  The Buyer agrees to use commercially
reasonable best efforts to obtain the financing contemplated by the Commitments
as soon as possible on the terms set forth in the Commitments. The Company
agrees to provide, and will cause its Subsidiaries and their respective
officers, directors, employees and accountants (collectively the foregoing Persons
are hereinafter referred to as the “Company Representatives”) to
provide, reasonable and customary cooperation reasonably requested in
connection with the arrangement of such financing, including without
limitation, participation in meetings, due diligence sessions, road shows, the
preparation of offering memoranda, private placement memoranda, prospectuses
and similar documents, the execution and delivery of any commitment letters,
underwriting or placement agreements, pledge and security documents, other
definitive financing documents, or other reasonably requested certificates or
documents, including a certificate of the chief financial officer of the
Company with respect to solvency matters and comfort letters of accountants and
such other certificates or documents as the Buyer may reasonably request from
time to time.

 

28

 

(1)  No Solicitation.  From and after the date hereof until the earlier of the Closing
and the termination of this Agreement pursuant to §9 hereof, the Company shall
not, and shall not permit or cause any of its Subsidiaries or any Company
Representative, to, directly or indirectly, solicit, initiate or engage in
discussions or negotiations with or provide any information or data to any
Person, encourage submission of any inquiries, proposals or offers by, or take
any other actions intended or designed to facilitate the efforts of any Person,
other than Buyer, relating to (i) the possible acquisition of, or business
combination with, the Company or any of its Subsidiaries (whether by way of
merger, consolidation or otherwise) or the purchase, exchange or other transfer
of any portion of the Company’s or any of its Subsidiaries’ capital stock or
assets (other than in the case of assets, sales of inventory or obsolete or
non-productive assets in the Ordinary Course of Business) or (ii) any other
similar transaction that could reasonably be expected to materially impede,
interfere with or otherwise delay the consummation of the transactions contemplated
hereby (each, a “Transaction”). Upon execution of this Agreement, the
Company shall immediately terminate, and shall cause its Subsidiaries and all
Company Representatives to immediately terminate, all discussions with any
Person (other than Buyer and its Affiliates) concerning any such Transaction.

 

(m)  2003 Audited
Financial Statements.  The
Company shall use commercially reasonable efforts to promptly prepare the 2003
Audited Financial Statements. The Company shall promptly deliver the 2003 Audited
Financial Statements to the Buyer as soon as they have been finally completed
and are no longer subject to any further adjustments or discussions with the
Company’s accountants. Following the delivery to the Buyer of the 2003 Audited
Financial Statements, the Buyer shall have ten business days to review the 2003
Audited Financial Statements for the purpose of determining whether the
condition to closing set forth in §7(a)(xi) has been satisfied. Unless the
Buyer notifies the Sellers within ten business days that the condition to
closing set forth in §7(a)(xi) has not been satisfied, such condition to
closing shall be deemed to have been met and the 2003 Audited Financial
Statements shall become the Most Recent Financial Statements, January 3, 2004
shall be the Most Recent Fiscal Month End, the fiscal year ended
January 3, 2004 shall be the Most Recent Fiscal Year End, be deemed to
have replaced the representations and warranties related to the Most Recent
Financial Statements, amended the Disclosure Schedule to the extent
applicable, changed all the references to November 30, 2003 contained
herein to January 3, 2004 (other than in § 3(h)(xvi) which shall
remain November 30, 2003), and to have cured any misrepresentation or breach
of warranty that otherwise might have existed hereunder solely by reason of the
prior Most Recent Financial Statements.

 

(n)  Selling
Expense Schedule.  Not later
than 3 days prior to the Closing Date, the Company shall provide the Buyer with
a reasonably detailed schedule setting forth the Selling Expenses for the
purpose of calculating the Closing Cash Consideration.

 

6.             Post-Closing
Covenants.  The
Parties agree as follows with respect to the period following the Closing.

 

(a)  General.  In the event that at any time after the
Closing any further action is necessary to carry out the purposes of this
Agreement, each of the Parties shall take such further action (including the
execution and delivery of such further instruments and documents) as the other

 

29

 

Party may reasonably request, all at the sole cost and expense of the
requesting Party. The Buyer agrees to retain records material to the operations
of the Company and its Subsidiaries for the period prior to the Closing and make
them available to the Sellers for a period of three (3) years after the
Closing, or, in the alternative, to notify the Sellers in writing at least 30
days prior to their disposal at any time prior to the expiration of such period
and permit the Sellers to have access to such records.

 

(b)  Litigation Support.  In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with (i)
any transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Closing
Date involving either of the Company or any of its Subsidiaries, each of the
other Parties shall cooperate with such Party or its counsel in the defense or
contest, make available their personnel, and provide such testimony and access
to their books and records as shall be reasonably requested in connection with
the defense or contest, all at the sole cost and expense of the contesting or
defending Party; provided that
this §6(b) shall not apply with respect to any actual or threatened litigation
or dispute between the Parties.

 

(c)  Tax
Matters.

 

(i)            Transfer
Taxes.  The Buyer shall, at its expense, prepare or
cause to be prepared and file or cause to be filed, and the Parties shall
cooperate in the preparation, execution and filing of, all returns,
questionnaires, applications, or other documents regarding any sales, use,
transfer, recording, registration and other fees, and any similar Taxes, which
become payable in connection with the transactions contemplated hereby. All
such taxes and fees shall be paid by the Buyer.

 

(ii)           Cooperation.  The
Parties shall cooperate with each other to provide each other with such
assistance as may be reasonably requested by them in connection with the
preparation of any Tax Returns, and any Tax audit or other examination in
connection with an administrative or judicial proceeding involving a taxing
authority relating to Taxes.

 

(d)  Performance of Obligations by the
Buyer.  Except as otherwise
expressly provided by this Agreement, on or after the Closing Date, the Buyer
shall or shall cause the Company to duly, promptly and faithfully pay, perform
and discharge when due, (i) all obligations and liabilities of whatever kind
and nature, primary or secondary, direct or indirect, absolute or contingent,
known or unknown, whether accrued or unaccrued, whether arising before, on or
after the Closing Date, of the Company, and (ii) any liability or obligation of
the Company or its Affiliates with respect to any of the liabilities described
in clause (i), including, without limitation, any guarantee or obligation to
assure performance given or made by the Company or its Affiliates with respect
to any such obligation of the Company set forth in clause (i) above.

 

30

 

(e)  Directors’ and Officers’
Indemnification.

 

(i)            All
rights to indemnification existing in favor of directors, officers, members,
managers, or employees of the Company and its Subsidiaries as provided in the
Constitutive Documents of the Company and its Subsidiaries, as in effect on the
date hereof, with respect to matters occurring through the Closing Date, will
survive the transactions contemplated hereby and will continue in full force
and effect thereafter for a period of six years.

 

(ii)           From
and after the Closing, the Buyer shall indemnify, defend and hold harmless the
present and former officers, directors and managers of the Company and its
Subsidiaries (collectively, the “Indemnified Parties”) against all
losses, expenses, claims, damages, liabilities or amounts that are paid in
settlement of, or otherwise in connection with, any claim, action, suit,
proceeding or investigation, based in whole or in part on the fact that such
person is or was a director, officer or manager of the Company or any of its
Subsidiaries and arising out of actions or omissions occurring at or prior to
the Closing (including, without limitation, the transactions contemplated by
this Agreement), in each case to the fullest extent permitted under applicable
law (and shall pay expenses in advance of the final disposition of any such
action or proceeding to each Indemnified Party to the fullest extent permitted
under applicable law).

 

(iii)          This
§6(e) is intended to be for the benefit of, and shall be enforceable by, the
Indemnified Parties, their heirs and personal representatives and shall be
binding on the Buyer and its successors and assigns.

 

7.             Conditions
to Obligation to Close.

 

(a)  Conditions to Obligation of the
Buyer.  The obligation of the
Buyer to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:

 

(i)            the
representations and warranties set forth in §3 above shall be true and correct
in all material respects at and as of the Closing Date, except for
representations and warranties set forth in §3 which are qualified as to
materiality or Material Adverse Effect, which shall be true and correct in all
respects at and as of the Closing Date, taking into account such
qualifications;

 

(ii)           the
Company and the Sellers shall have performed and complied with all of their
respective covenants hereunder in all material respects through the Closing;

 

(iii)          there
shall not be any injunction, judgment, order, decree, ruling or charge in
effect preventing consummation of any of the transactions contemplated by this
Agreement;

 

(iv)          the
Sellers shall have delivered to the Buyer a certificate to the effect that each
of the conditions specified above in §7(a)(i)-(iii) is satisfied in all
respects;

 

(v)           all
applicable waiting periods (and any extensions thereof) under the
Hart-Scott-Rodino Act and other applicable Competition Laws shall have expired
or

 

31

 

otherwise been terminated, and the approval of the European Commission
of the transactions contemplated hereby shall have been obtained pursuant to
the EC Merger Regulation;

 

(vi)          the
Buyer shall have obtained the Debt Financing contemplated in the Commitments or
otherwise obtained financing on terms reasonably satisfactory to Purchaser, in
either case, in an amount sufficient to enable Purchaser to consummate the
transactions contemplated by this Agreement;

 

(vii)         the
Buyer and certain of the Sellers shall have executed and delivered a Transition
Services Agreement substantially containing the terms set forth on Exhibit B;

 

(viii)        during
the period from the date hereof to the Closing, no change, event or effect
shall have occurred that has had, or that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect;

 

(ix)           all
directors of the Company and its Subsidiaries shall have tendered their
resignations and copies thereof shall have been delivered to the Buyer;

 

(x)            the
Company, on behalf of the Sellers, shall deliver to the Buyer, pursuant to
§ 1445(b)(3) of the Code and the Treasury regulations promulgated
thereunder, an affidavit dated no more than 30 days prior to the Closing Date
and signed by a responsible corporate officer of the Company stating that (A)
the Company is not, and has not been at any time during the applicable period
specified in § 897(c)(l)(A)(ii) of the Code, a “United States real
property holding corporation” (as defined in § 897(c)(2) of the Code) and
(B) no interest in the Company constitutes a “United States real property
interest” (as defined in § 897(c) of the Code); and

 

(xi)           the
EBITDA of the Company for the fiscal year ended January 3, 2004 shall be
not less than $119.3 million as derived from the 2003 Audited Financial
Statements.

 

The
Buyer may waive any condition specified in this §7(a) in writing at or prior to
the Closing.

 

(b)  Conditions to Obligation of the
Sellers. The obligation of the Sellers to consummate the transactions
to be performed by them in connection with the Closing is subject to
satisfaction of the following conditions:

 

(i)            the
representations and warranties set forth in §4 above shall be true and correct
in all material respects at and as of the Closing Date, except for
representations and warranties set forth in §4 which are qualified as to
materiality or material adverse effect, which shall be true and correct in all
respects at and as of the Closing Date, taking into account such
qualifications;

 

(ii)           the
Buyer shall have performed and complied with all of its covenants hereunder in
all material respects through the Closing;

 

32

 

(iii)          there
shall not be any injunction, judgment, order, decree, ruling or charge in
effect preventing consummation of any of the transactions contemplated by this
Agreement;

 

(iv)          the
Buyer shall have delivered to the Sellers a certificate to the effect that each
of the conditions specified above in §7(b)(i)-(iii) is satisfied in all
respects; and

 

(v)           all
applicable waiting periods (and any extensions thereof) under the
Hart-Scott-Rodino Act and other applicable Competition Laws shall have expired
or otherwise been terminated, and the approval of the European Commission of
the transactions contemplated hereby shall have been obtained pursuant to the
EC Merger Regulation.

 

The
Sellers may waive any condition specified in this §7(b) in writing at or prior
to the Closing.

 

8.             Remedies for Breaches of this Agreement.  All
of the representations, warranties and agreements contained herein shall
terminate as of the Closing and be of no further force or effect, except that
the agreements set forth in §6 and §10 shall survive the Closing and continue
in full force and effect.

 

9.             Termination.

 

(a)  Termination
of Agreement.  Certain of the
Parties may terminate this Agreement as provided below:

 

(i)            the
Buyer and the Sellers may terminate this Agreement by mutual written consent at
any time prior to the Closing;

 

(ii)           the
Buyer may terminate this Agreement by giving written notice to the Sellers at
any time prior to the Closing in the event the Sellers has within the then
previous 30 days given the Buyer any notice pursuant to §5(h)(i) above and the
development that is the subject of the notice is reasonably likely to result in
the closing condition set forth in §7(a)(i) or §7(a)(viii) not being satisfied
by the Closing Date;

 

(iii)          the
Buyer may terminate this Agreement by giving written notice to the Sellers at
any time prior to the Closing (A) in the event that any Seller has breached any
material representation, warranty or covenant contained in this Agreement
(other than the representations and warranties in §3(f)-(w) above in cases
where the Sellers have provided notice pursuant to §5(h)(i)) in any material
respect, the Buyer has notified the Sellers of the breach, and the breach has
continued without cure for a period of 30 days after the notice of breach or
(B) if the Closing shall not have occurred on or before the earlier of (x) the
date that is 120 days after the delivery to the Buyer of the 2003 Audited
Financial Statements and (y) June 30, 2004, by reason of the failure of
any condition precedent under §7(a) hereof (unless the failure results
primarily from the Buyer’s inaction or the Buyer itself breaching any
representation, warranty or covenant contained in the Agreement); provided that the date in this clause (y)
may be extended to July 31, 2004, if (1) a Termination Date Extension
Event shall have occurred and is continuing

 

33

 

and the Buyer has so notified the Sellers and (2) the Buyer shall have
delivered to the Sellers amendments to each of their Commitments that are
substantially in the form of the Commitments but that contain an expiration
date on or after July 31, 2004, and otherwise do not contain any
amendments or modifications reasonably likely to prevent the Buyer from
receiving the Debt Financing in accordance with the Commitments; and

 

(iv)          the
Sellers may terminate this Agreement by giving written notice to the Buyer at
any time prior to the Closing (A) in the event the Buyer has breached any
material representation, warranty or covenant contained in this Agreement in
any material respect, the Sellers has notified the Buyer of the breach, and the
breach has continued without cure for a period of 30 days after the notice of
breach or (B) if the Closing shall not have occurred on or before the earlier
of (x) the date that is 120 days after the delivery to the Buyer of the 2003
Audited Financial Statements and (y) June 30, 2004, by reason of the
failure of any condition precedent under §7(b) hereof (unless the failure
results primarily from a Seller’s inaction or a Seller breaching any
representation, warranty or covenant contained in this Agreement); provided that the date in this clause (y)
may be extended to July 31, 2004, if (1) a Termination Date Extension
Event shall have occurred and is continuing and the Buyer has so notified the
Sellers and (2) the Buyer shall have delivered to the Sellers amendments to
each of their Commitments that are substantially in the form of the Commitments
but that contain an expiration date on or after July 31, 2004, and
otherwise do not contain any amendments or modifications reasonably likely to
prevent the Buyer from receiving the Debt Financing in accordance with the
Commitments.

 

(b)  Effect of Termination.
If any Party terminates this Agreement pursuant to §9(a) above, all rights and
obligations of the Parties hereunder shall terminate without any liability of
any Party to the other Party (except for any liability of any Party then in
breach); provided, however, that
the confidentiality provisions contained in the Confidentiality Agreement shall
survive in accordance with the terms thereof.

 

10.           Miscellaneous.

 

(a)  Press Releases and Public
Announcements.  No Party shall
issue any press release or public announcement relating to the subject matter
of this Agreement prior to the Closing without the prior written approval of
the other Party; provided, however, that
any Party may make any public disclosure it believes in good faith based upon
the advice of counsel, is required by applicable law (in which case the
disclosing Party shall use its reasonable best efforts to advise the other
Party of such disclosure and the form and content thereof prior to making the
disclosure).  The Parties agree to prepare
and issue mutually acceptable press releases on or promptly after the Closing
announcing the transactions contemplated hereby.

 

(b)  Third-Party Beneficiaries.  Except as contemplated by §6(e) above, this
Agreement shall not confer any rights or remedies upon any Person other than
the Parties and their respective successors and permitted assigns.

 

34

 

(c)  Entire Agreement.  This Agreement (including the documents referred to herein)
constitutes the entire agreement between the Parties and supersedes any prior
understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof, other than the Confidentiality Agreement, which shall remain in full
force and effect.

 

(d)  Succession and Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns.  No
Party may assign either this Agreement or any of its rights, interests or
obligations hereunder without the prior written approval of the Buyer and the
Sellers; provided, however, that the Buyer shall be permitted
without the prior written consent of the other Parties to assign its rights but
not its obligations under this Agreement to the lenders under the Debt
Financing.

 

(e)  Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.

 

(f)  Headings. 
The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

 

(g)  Notices. All notices, requests, demands, claims and
other communications hereunder shall be in writing. Any notice, request,
demand, claim or other communication hereunder shall be deemed duly given if
personally delivered or sent by registered or certified mail, return receipt
requested, postage prepaid, or by reputable overnight courier and addressed to
the intended recipient as set forth below, or in the case of the Sellers, as
set forth on the Notice Schedule hereto:

 

If to the Company:

 

	
   

  	
  Polypore
  Inc.

  
	
   

  	
  13800
  South Lakes Drive

  
	
   

  	
  Charlotte,
  NC 28273

  
	
   

  	
  Attention:

  	
  Frank
  Nasisi

  
	
   

  	
   

  	
  Lynn
  Amos

  
	
   

  	
  Facsimile:
  (704) 587-8796

  

 

With a copy to (which shall not constitute notice to
the Company):

 

	
   

  	
  Kirkland
  & Ellis LLP

  
	
   

  	
  200
  East Randolph Drive

  
	
   

  	
  Chicago,
  Illinois 60601

  
	
   

  	
  Attention:

  	
  H.
  Kurt von Moltke

  
	
   

  	
   

  	
  Carol
  Anne Huff

  
	
   

  	
  Facsimile:
  (312) 861-2200

  

 

35

 

If to the Buyer:

 

	
   

  	
  PP
  Acquisition Corporation

  
	
   

  	
  c/o
  Warburg Pincus LLC

  
	
   

  	
  466
  Lexington Avenue

  
	
   

  	
  New
  York, NY 10017

  
	
   

  	
  Attention:

  	
  Kewsong
  Lee

  
	
   

  	
   

  	
  David
  Barr

  
	
   

  	
  Facsimile:

  	
  (212)
  878-9100

  

 

With a copy to (which shall not constitute notice to
the Buyer):

 

	
   

  	
  Willkie
  Farr & Gallagher LLP

  
	
   

  	
  787
  Seventh Avenue

  
	
   

  	
  New
  York, NY 10019-6099

  
	
   

  	
  Attention:

  	
  Steven
  J. Gartner

  
	
   

  	
  Facsimile:

  	
  (212)
  728-9222

  

 

Any
Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including messenger service, telecopy, telex, ordinary mail or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims and other communications
hereunder are to be delivered by giving the other Party notice in the manner
herein set forth.

 

(h)  Governing Law; Jurisdiction.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware (i.e., without giving effect to any choice
or conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.) Each of the Parties hereby (a)
irrevocably submits to the exclusive jurisdiction of any state or federal court
sitting in the State of Delaware in any action, suit or proceeding arising out
of or relating to this Agreement and agrees that all claims in respect of the
action or proceeding may be heard and determined in any such court, (b) waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
(i) it is not personally subject to the jurisdiction of such court or of any
other court to which proceedings in such court may be appealed, (ii) such suit,
action or proceeding is brought in an inconvenient forum or (iii) the venue of
such suit, action or proceeding is improper, (c) expressly waives any
requirement for the posting of a bond by the party bringing such suit, action
or proceeding and (d) consents to process being served in any such suit, action
or proceeding by mailing, certified mail, return receipt requested, a copy
thereof to such party at the address in effect for notices hereunder, and
agrees that such services shall constitute good and sufficient service of
process and notice thereof. Nothing in this §10(h) shall affect or limit any
right to serve process in any other manner permitted by law.

 

36

 

(i)  Amendments and Waivers.  No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by each
of the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.

 

(j)  Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.

 

(k)  Expenses.  Each of the Buyer and the Sellers will bear
its own costs and expenses (including without limitation accounting, investment
banking and legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby; provided that, if and only to
the extent that the Closing occurs, all Selling Expenses shall be paid by the
Company with funds provided by the Buyer, it being understood and agreed that
any amounts provided by the Buyer to pay the Selling Expenses shall be deducted
from the Closing Cash Consideration calculation as contemplated by § 2(a)
hereof. No costs or expenses specifically related to the transactions contemplated
by this Agreement other than the Selling Expenses shall be paid or borne by the
Company or any of its Subsidiaries. Without limiting the generality of the
foregoing, all transfer, documentary, sales, use, stamp, registration and other
such Taxes, and all conveyance fees, recording charges and other fees and
charges (including any penalties and interest) incurred in connection with the
consummation of the transactions contemplated by this Agreement, shall be paid
by the Buyer when due, and the Buyer will, at its own expense, file all
necessary tax returns and other documentation with respect to all such Taxes,
fees and charges, and, if required by applicable law, the Parties will, and
will cause their affiliates to, join in the execution of any such tax returns
and other documentation.

 

(l)  Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.

 

(m)  Incorporation of Exhibits and
Schedules.  The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.

 

(n)  Disclosure Schedule.  The inclusion of information in the
Disclosure Schedule shall not be construed as an admission that such
information is material to the Company, its Subsidiaries or the Sellers. In
addition, matters reflected in the Disclosure Schedule are not necessarily
limited to matters required by this Agreement to be reflected in the Disclosure
Schedule. Such additional matters are set forth for informational purposes only
and do not necessarily include other matters of a similar nature.

 

*  * 
*  *  *

 

37

 

IN WITNESS WHEREOF, the Parties hereto have executed this Stock
Purchase Agreement as of the date first above written.

 

	
   

  	
  Company:

  	
  POLYPORE
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jerry Zucker

  
	
   

  	
   

  	
  Name:

  	
  Jerry Zucker

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Buyer:

  	
  PP
  ACQUISITION CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kewsong Lee

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sellers:

  	
  /s/ Jerry Zucker

  
	
   

  	
   

  	
  Jerry
  Zucker

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ James Boyd

  
	
   

  	
   

  	
  James
  G. Boyd

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CIGNA
  MEZZANINE PARTNERS III, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  CIGNA Investments, Inc. (as authorized

  agent)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  /s/
  Robert Eccles

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CONNECTICUT
  GENERAL LIFE INSURANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  CIGNA Investments, Inc. (as authorized

  agent)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  /s/
  Robert Eccles

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GOLDER,
  THOMA, CRESSEY FUND III

  LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  Golder, Thoma, Cressey, Rauner, L.P.

  
	
   

  	
   

  	
  Its:
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ B. Rauner

  
	
   

  	
   

  	
   

  	
  Its:
  

  	
  Principal

  
													

 

38

 

	
   

  	
  J.P.
  MORGAN PARTNERS (BHCA), L.P.

  
	
   

  	
   

  
	
   

  	
  By:
  JPMP Master Fund Manager, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  JPMP
  Capital Corp.

  
	
   

  	
   

  	
  Its:

  	
  General
  Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ C. Behrens

  
	
   

  	
   

  	
  Its:
  

  	
  General
  Partner

  
	
   

  	
   

  
	
   

  	
  THE
  INTERTECH GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jerry Zucker

  
	
   

  	
  Name:

  	
  Jerry Zucker

  
	
   

  	
  Its:

  	
  Chairman, President
  & CEO

  
	
   

  	
   

  
	
   

  	
  THE
  LINCOLN NATIONAL LIFE INSURANCE

  COMPANY

  
	
   

  	
   

  
	
   

  	
  By:
  Delaware Investment Advisers, a series of

  Delaware Management Business Trust, Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  /s/ R. Gordon
  Marsh

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ZB
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jerry Zucker

  
	
   

  	
  Name:

  	
  Jerry Zucker

  
	
   

  	
  Its:

  	
  President & CEO

  
											

 

39Exhibit 10.2

 

CREDIT
AGREEMENT (this “Agreement”), dated as of May 13, 2004, among PP HOLDING
CORPORATION, a Delaware corporation (“Holdings”), PP ACQUISITION
CORPORATION, a Delaware corporation (the “Borrower”), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (the “Lenders”), GENERAL ELECTRIC CAPITAL CORPORATION, LEHMAN
COMMERCIAL PAPER INC. and UBS SECURITIES LLC, as co-documentation agents (in
such capacity, the “Co-Documentation Agents”), BEAR STEARNS CORPORATE
LENDING INC., as syndication agent (in such capacity, the “Syndication Agent”),
and JPMORGAN CHASE BANK, as administrative agent.

 

W  I  T
N  E  S  S  E  T  H:

 

WHEREAS,
the Borrower will acquire all the capital stock of Polypore, Inc., a Delaware
corporation (the “Company”), pursuant to the Stock Purchase Agreement,
dated as of January 30, 2004 (the “Acquisition Agreement”), between
the Company, the sellers named therein and the Borrower;

 

WHEREAS,
pursuant to the Acquisition Agreement, the Borrower will be merged with and
into the Company, with the Company continuing as the surviving corporation in
such merger (the “Merger”); and

 

WHEREAS,
upon the effectiveness of the Merger, the Company will succeed to all rights
and obligations of the Borrower by operation of law and all references herein
and in the other Loan Documents to the term “Borrower” shall thereupon
be deemed to be references to the Company;

 

NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent and the Lenders to enter into this Agreement and to induce the Lenders to
make their respective extensions of credit to the Borrower hereunder, the
parties hereto hereby agree as follows:

 

ARTICLE I

 

Definitions

 

                SECTION
1.1.  Defined Terms.  As used in this Agreement, the following
terms shall 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.

 

“Acquired
CapEx Amount” shall have the meaning assigned to such term in
Section 6.10(a).

 

“Acquired
Entity” shall have the meaning assigned to such term in
Section 6.4(g).

 

“Acquisition”
shall mean the acquisition by the Borrower of all the outstanding capital stock
of the Company and its subsidiaries pursuant to the Acquisition Agreement,
under which the Company shall have been merged into the Borrower, with the
Borrower being the surviving entity.

 

“Acquisition
Agreement” shall have the meaning assigned to such term in the recitals, as
such agreement may be amended, supplemented or otherwise modified from time to
time in accordance with Section 6.15.

 

 

“Acquisition
Documentation” shall mean, collectively, the Acquisition Agreement and all
schedules, exhibits and annexes thereto and all side letters and agreements
affecting the terms thereof or entered into in connection therewith.

 

“Administrative
Agent” shall mean JPMorgan Chase Bank, together with its affiliates, as the
arranger of the Commitments and as the administrative agent for the Lenders
under this Agreement and the other Loan Documents, together with any of its
successors.

 

“Administrative
Agent Fees” shall have the meaning assigned to such term in
Section 2.5(b).

 

“Affiliate”
shall mean, when used 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.

 

“Agents”
shall mean the collective reference to the Syndication Agent, the
Co-Documentation Agents and the Administrative Agent.

 

“Aggregate
Alternative Currency Exposure” shall mean, as at any date of determination
with respect to any Lender, the Dollar Equivalent of the sum of (a) the
principal amount of such Lender’s outstanding Revolving Loans denominated in an
Alternative Currency on such date and (b) the aggregate amount of such Lender’s
Alternative Currency L/C Exposure on such date.

 

“Aggregate
Revolving Credit Exposure” shall mean the aggregate amount of the Lenders’
Revolving Credit Exposures.

 

“Alternate
Base Rate” shall mean, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus 1⁄2 of 1%.  For purposes
hereof:  “Prime Rate” shall mean
the rate of interest per annum publicly announced from time to time by JPMorgan
Chase Bank as its prime rate in effect at its principal office in New York City
(the Prime Rate not being intended to be the lowest rate of interest charged by
JPMorgan Chase Bank in connection with extensions of credit to debtors).  Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or
the Federal Funds Effective Rate, respectively.

 

“Alternative
Currencies” shall mean Euros.

 

“Alternative
Currency L/C Exposure” shall mean at any time the Dollar Equivalent of the
sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit
denominated in an Alternative Currency at such time and (b) the aggregate
principal amount of all L/C Disbursements with respect to Letters of Credit
denominated in an Alternative Currency that have not yet been reimbursed at
such time.  The Alternative Currency L/C
Exposure of any Revolving Credit Lender at any time shall equal its Pro Rata
Percentage of the aggregate Alternative Currency L/C Exposure at such time.

 

“Alternative
Currency Loans” shall mean Term Loans and Revolving Loans denominated in
any Alternative Currency.

 

“Alternative
Currency Sublimit” shall mean $50,000,000.

 

“Applicable
Percentage” shall mean, for any day, with respect to any Eurodollar Loan or
ABR Loan, as the case may be, the applicable percentage set forth below under
the caption “Eurodollar Spread-

 

2

 

Term
Loans”, “ABR Spread-Term Loans”, “Eurodollar Spread-Revolving Loans and
Swingline Loans” or “ABR Spread-Revolving Loans and Swingline Loans”, as the
case may be:

 

	
  Eurodollar

  Spread-

  Term Loans

  	
   

  	
  ABR
  Spread-

  Term Loans

  	
   

  	
  Eurodollar
  Spread-

  Revolving Loans and

  Swingline Loans

  	
   

  	
  ABR
  Spread-

  Revolving Loans and

  Swingline Loans

  	
   

  
	
  2.50

  	
  %

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  

 

;
provided, that on and after the first Adjustment Date (as defined in the
definition of “Pricing Grid”) occurring after October 2, 2004, the
Applicable Percentage with respect to Revolving Loans and Swingline Loans will
be determined pursuant to the Pricing Grid.

 

“Approved
Fund” shall have the meaning assigned to such term in Section 9.4.

 

“Asset
Sale” shall mean the sale, transfer or other disposition (by way of merger,
casualty, condemnation or otherwise but excluding investments permitted by
Section 6.4) by Holdings, the Borrower or any of the Subsidiaries to any
person other than the Borrower or any Subsidiary Guarantor of (a) any Equity
Interests of any of the Subsidiaries (other than directors’ qualifying shares
or the sale by any person of Equity Interests of such person) or (b) any other
assets of Holdings, the Borrower or any of the Subsidiaries (other than (i)
inventory, damaged, obsolete or worn out assets, scrap and Permitted
Investments, in each case disposed of in the ordinary course of business, (ii)
dispositions between or among the Borrower and Domestic Subsidiaries, (iii)
dispositions listed on Schedule 1.1(c) hereto;  (iv) dispositions between or among Foreign Subsidiaries and (v)
dispositions of assets from the Borrower or a Domestic Subsidiary to a Foreign
Subsidiary if the disposition were treated as an Investment in the Foreign
Subsidiary and would be permitted by Section 6.4), provided, that
any asset sale or series of related asset sales described in clause (b) above
having a value not in excess of $2,000,000 shall be deemed not to be an “Asset
Sale” for purposes of this Agreement.

 

“Assignee”
shall have the meaning assigned to such term in Section 9.4(b).

 

“Assignment
and Assumption” shall mean an Assignment and Assumption, substantially in
the form of Exhibit A or such other form as may be approved by the
Administrative Agent.

 

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

 

“Borrower”
shall have the meaning assigned to such term in the preamble hereto.

 

“Borrowing”
shall mean (a) Loans of the same Class and 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, or (b) a Swingline Loan.

 

“Borrowing
Request” shall mean a request by the Borrower in accordance with the terms
of Section 2.3 and substantially in the form of Exhibit B, or such other
form as shall be approved by the Administrative Agent.

 

“Breakage
Event” shall have the meaning assigned to such term in Section 2.15.

 

3

 

“Business
Day” shall mean any day other than a Saturday, Sunday or day on which banks
in New York City are authorized or required by law to close; provided, however,
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.

 

“Calculation
Date” shall mean (a) three Business Days prior to the last Business Day of
each calendar quarter and (b) any other Business Day selected by the
Administrative Agent in its discretion; provided that each date that is
on or about the date of any borrowing request or rollover request with respect
to any Alternative Currency Loan shall also be a “Calculation Date” with
respect to the relevant Alternative Currency.

 

“Capital
Expenditures” shall mean, for any period, (a) the additions to property,
plant and equipment and other capital expenditures of the Borrower and its
consolidated Subsidiaries that are (or should be) set forth in a consolidated
statement of cash flows of the Borrower for such period prepared in accordance
with GAAP and (b) Capital Lease Obligations or Synthetic Lease Obligations
incurred by the Borrower and its consolidated Subsidiaries during such period,
but excluding in each case (i) any such expenditure made to restore, replace or
rebuild property to the condition of such property immediately prior to any
damage, loss, destruction or condemnation of such property, to the extent such
expenditure is made with insurance proceeds, condemnation awards or damage
recovery proceeds relating to any such damage, loss, destruction or
condemnation, (ii) any such expenditure made as the purchase price of any
Permitted Acquisition, (iii) capital expenditures relating to the construction
or acquisition of any property that has been transferred to a Person (other
than Holdings or any Subsidiary) pursuant to a sale-leaseback transaction
permitted under Section 6.3, (iv) interest capitalized during such period,
(v) the purchase price of equipment that is purchased during such period to the
extent the consideration therefor consists of any combination of (x) used or
surplus equipment traded in at the time of such purchase and (y) the proceeds
of a concurrent sale of used or surplus equipment, in each case, in the
ordinary course of business, (vi) the purchase price of equipment that is
purchased substantially contemporaneously with the trade-in of existing
equipment to the extent that the gross amount of the such price is reduced by
the credit granted by the seller of such equipment for the equipment being
traded at such time or (vii) any capital expenditures made with Net Cash
Proceeds received from an Asset Sale. 
Except for purposes of computing Excess Cash Flow, any buyout payments
of the Exide Lease not in excess of $10,000,000 in the aggregate shall be
deemed not to constitute a Capital Expenditure.

 

“Capital
Lease Obligations” of any person shall mean 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.

 

“Cash
Management Obligations” shall mean obligations owed by Holdings, the
Borrower or any of its Subsidiaries to any Lender or any Affiliate of a Lender
in respect of any overdraft and related liabilities arising from treasury,
depository and cash management services or any automated clearing house
transfers of funds.

 

“Change
in Control” shall mean any of the following events:

 

(a)  prior to the initial Public Equity Offering,
the Permitted Investors shall fail to beneficially own, directly or indirectly,
Equity Interests in Holdings representing more than 50% of the aggregate
ordinary voting power represented by the issued and outstanding Equity
Interests of Holdings;

 

4

 

(b)  after the initial Public Equity Offering,
any “person” or “group” (within the meaning of the Securities Exchange Act of
1934 and the rules of the SEC thereunder as in effect on the date hereof) other
than the Permitted Investors becomes, directly or indirectly, the beneficial
owner of Equity Interests in Holdings representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding
Equity Interests of Holdings and the percentage of aggregate voting power owned
by such “person” or “group” exceeds the percentage of ordinary voting power
owned by the Permitted Investors;

 

(c)  at any time, occupation of a majority of the
seats (other than vacant seats) on the board of directors of Holdings or the
Borrower by persons who were neither (i) nominated by the board of directors of
Holdings or the Borrower, as the case may be, nor (ii) appointed by directors
so nominated;

 

(d)  the occurrence of any change in control or
similar event (however denominated) with respect to Holdings or the Borrower
under and as defined in any indenture or agreement in respect of Material
Indebtedness to which Holdings, the Borrower or a Subsidiary is a party; or

 

(e)  at any time, Holdings shall cease to
directly own, beneficially and of record, 100% of the issued and outstanding
Equity Interests of the Borrower.

 

“Change
in Law” shall mean (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender or the Issuing Bank
(or, for purposes of Section 2.14, by any lending office of such Lender or
by such Lender’s or Issuing Bank’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 date of this Agreement.

 

“Charges”
shall have the meaning assigned to such term in Section 9.9.

 

“Class”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are Revolving Loans, Term Loans, Other
Term Loans or Swingline Loans and, when used in reference to any Commitment,
refers to whether such Commitment is a Revolving Credit Commitment, a Term Loan
Commitment, an Incremental Term Loan Commitment or a Swingline Commitment.

 

“Closing
Date” shall mean May 13, 2004.

 

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

 

“Co-Documentation
Agents” shall have the meaning assigned to such term in the preamble
hereto.

 

“Collateral”
shall mean all the “Collateral” as defined in any Security Document, and shall
include the Mortgaged Properties.

 

“Commitment”
shall mean, with respect to any Lender, such Lender’s Revolving Credit
Commitment and Term Loan Commitment.

 

“Commitment
Fee” shall have the meaning assigned to such term in Section 2.5(a).

 

“Company”
shall have the meaning assigned to such term in the recitals.

 

5

 

“Conduit
Lender” shall mean  any special
purpose corporation organized and administered by any Lender for the purpose of
making Loans otherwise required to be made by such Lender and designated by
such Lender in a written instrument; provided, that the designation by
any Lender of a Conduit Lender shall not relieve the designating Lender of any
of its obligations to fund a Loan under this Agreement if, for any reason, its
Conduit Lender fails to fund any such Loan, and the designating Lender (and not
the Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect to
its Conduit Lender, and provided, further, that no Conduit Lender
shall (a) be entitled to receive any greater amount pursuant to
Section 2.14, 2.15, 2.19 or 9.5 than the designating Lender would have
been entitled to receive in respect of the extensions of credit made by such
Conduit Lender or (b) be deemed to have any Commitment.

 

“Confidential
Information Memorandum” shall mean the Confidential Information Memorandum
of the Borrower dated April 16, 2004.

 

“Consolidated
EBITDA” shall mean, for any period, Consolidated Net Income for such period
plus (a) without duplication and to the extent deducted in determining such
Consolidated Net Income, the sum of (i) Consolidated Interest Expense for such
period, (ii) all income tax expense (including, without limitation, income tax
expense of consolidated Foreign Subsidiaries) and foreign withholding tax
expense for such period, (iii) all amounts attributable to depreciation and
amortization for such period, (iv) any non-recurring fees, cash charges and
other cash expenses made or incurred in connection with the Transactions that
are paid or otherwise accounted for within 180 days of the consummation of the
Transactions, (v) any extraordinary losses, (vi) (A) facilities relocation or
closing costs, (B) non-recurring restructuring costs and (C) integration costs
and fees, including cash severance costs, in connection with Permitted
Acquisitions, in each case incurred during such period and payable in cash, in
an aggregate amount under this clause (vi) not to exceed $10,000,000, (vii)
amortization and impairment charges resulting from purchase accounting
adjustments (including inventory step-up adjustments recognized in costs of
sales and write-offs of in-process research and development costs), (viii) any
non-cash compensation charges and deferred compensation charges, including
arising from stock options, taken during such period, (ix) any other non-cash charges
(other than the write-down of current assets), impairments and expenses for
such period (including amortization of loan acquisition costs and unrealized
gains and losses on Hedging Agreements and gains and losses on foreign exchange
(including in respect of intercompany notes)), (x) special incentives paid in
the first fiscal quarter of 2003 to management of the Borrower in an aggregate
amount not to exceed $2,361,000, (xi) one-time salary and bonus payment made
prior to the Closing Date to certain stockholders of the Borrower in an
aggregate amount not to exceed $7,500,000 and (xii) all operating lease
payments not in excess of $3,000,000 associated with the Exide Lease during
such period minus (b) without duplication (i) all cash payments made
during such period on account of non-cash charges added to Consolidated Net
Income pursuant to clauses (a)(viii) or (ix) above in such period or in a
previous period and (ii) to the extent included in determining such
Consolidated Net Income, any extraordinary gains and all non-cash items of
income (other than normal accruals in the ordinary course of business) for such
period, all determined on a consolidated basis in accordance with GAAP.

 

“Consolidated
Interest Expense” shall mean, for any period, the sum of (a) the interest
expense (including imputed interest expense in respect of Capital Lease
Obligations and Synthetic Lease Obligations), net of cash interest income of
the Borrower and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP, plus (b) any interest accrued during such
period in respect of Indebtedness of the Borrower or any Subsidiary that is
required to be capitalized rather than included in consolidated interest
expense for such period in accordance with GAAP. For purposes of the foregoing,
interest expense shall be determined (a) by excluding non-cash interest expense
and amortization of deferred financing costs and original issue discount and
(b) after giving effect to any net

 

6

 

payments
made or received by the Borrower or any Subsidiary with respect to interest
rate Hedging Agreements.

 

“Consolidated
Net Income” shall mean, for any period, the net income or loss of the
Borrower and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP (adjusted to reflect any charge, tax or expense
incurred or accrued by Holdings during such period as though such charge, tax
or expense had been incurred by the Borrower, to the extent that the Borrower
has made or would be entitled under the Loan Documents to make any payment to
or for the account of Holdings in respect thereof); provided, that there
shall be excluded (a) the income of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by the Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, statute, rule or
governmental regulation applicable to such Subsidiary, (b) the income or loss
of any person accrued prior to the date it becomes a Subsidiary or is merged
into or consolidated with the Borrower or any Subsidiary or the date that such
person’s assets are acquired by the Borrower or any Subsidiary, (c) the income
of any person in which any other person (other than the Borrower or a wholly
owned Subsidiary or any director holding qualifying shares in accordance with
applicable law) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or a wholly
owned Subsidiary by such person during such period, (d) any gains or losses
attributable to sales of assets out of the ordinary course of business in
excess of $2,500,000 and (e) gains and losses, realized or unrealized, relating
to fluctuations in currency values. 
Notwithstanding anything set forth in clause (a) above to the contrary,
a Foreign Subsidiary may agree to restrict its ability to declare dividends or
similar distributions without excluding the net income of such Foreign
Subsidiary from Consolidated Net Income so long as (a) the agreement that
restricts such ability relates to Indebtedness of such Foreign Subsidiary
described in Section 6.1(h) or Section 6.1(n), (b) the proceeds thereof
are used, directly or indirectly through intercompany transfers, to prepay the
Loans and (c) the net income of such Foreign Subsidiary, together with the net
income of each other Foreign Subsidiary subject to a similar restriction, does
not exceed 10% of Consolidated Net Income.

 

“Control”
shall mean 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 ownership of voting securities, by contract or otherwise, and the terms “Controlling”
and “Controlled” shall have meanings correlative thereto.

 

“Credit
Event” shall have the meaning assigned to such term in Section 4.1.

 

“Cumulative
Excess Cash Flow” shall mean the sum of Excess Cash Flow (but not less than
zero in any period) for the period commencing on the Closing Date and ending on
January 1, 2005 and Excess Cash Flow for each succeeding fiscal year
commencing with the fiscal year ended December 31, 2005 and ending on the
Borrower’s most recently ended fiscal year.

 

“Cure
Amount” shall have the meaning assigned to such term in Article VII.

 

“Cure
Right” shall have the meaning assigned to such term in Article VII.

 

“Current
Assets” shall mean, at any time, the consolidated current assets (other
than cash, deferred income taxes and Permitted Investments) of the Borrower and
the Subsidiaries.

 

“Current
Liabilities” shall mean, at any time, the consolidated current liabilities
of the Borrower and the Subsidiaries at such time, but excluding, without
duplication, (a) the current portion of any long-term Indebtedness and (b)
outstanding Revolving Loans and Swingline Loans.

 

7

 

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

 

“Defaulting
Lender” shall mean any Lender that (a) has failed to fund any portion of
the Term Loans, Revolving Loans, participations in L/C Exposure or
participations in Swing Line Loans required to be funded by it hereunder within
one (1) Business Day of the date required to be funded by it hereunder, unless
the subject of a good faith dispute, (b) has otherwise failed to pay over to
the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one (1) Business Day of the date when due, unless
the subject of a good faith dispute, or (c) has been deemed insolvent or become
the subject of a bankruptcy or insolvency proceeding.

 

“De
Minimis Holders” shall mean, with respect to any wholly owned Subsidiary
holders of directors’ qualifying shares and other de minimis ownership
interests required to be owned under foreign law by local residents.

 

“Determination
Date” shall mean each date that is three Business Days after any
Calculation Date.

 

“Dollar
Equivalent” shall mean on any date of determination, with respect to any
amount hereunder denominated in an Alternative Currency, the amount of Dollars
that may be purchased with such amount of such currency at the Exchange Rate
(determined as of the applicable Determination Date) with respect to such
currency on such date.

 

“Dollars”
and “$” shall mean dollars in lawful currency of the United States.

 

“Domestic
Subsidiaries” shall mean all Subsidiaries incorporated or organized under
the laws of the United States of America, any State thereof or the District of
Columbia.  If a Foreign Subsidiary
becomes a Guarantor and complies with the provisions of Section 5.9 as to
collateral, the Borrower may elect by written notice to the Administrative Agent
to treat such Subsidiary as a Domestic Subsidiary for purposes of the Loan
Documents; provided, that the Administrative Agent concludes, in its
reasonable discretion, that the Lenders would have substantially the same
rights against such Subsidiary pursuant to the Security Documents under the law
of the relevant foreign jurisdiction as the Lenders would have if such
Subsidiary were organized in the United States of America.

 

“Environmental
Laws” shall mean all former, current and future Federal, state, local and
foreign laws (including common law), treaties, regulations, rules, ordinances,
codes, decrees, judgments, directives having the force of law and orders
(including consent orders), in each case, relating to protection of the
environment, natural resources, human health and safety or the presence,
Release of, or exposure to, Hazardous Materials, or the generation,
manufacture, processing, distribution, use, treatment, storage, transport,
recycling or handling of, or the arrangement for such activities with respect
to, Hazardous Materials.

 

“Environmental
Liability” shall mean all liabilities, obligations, damages, losses,
claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and
costs (including administrative oversight costs, natural resource damages and
remediation costs), whether contingent or otherwise, arising out of or relating
to (a) compliance or non-compliance with 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 of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

 

8

 

“Environmental
Permits” shall mean any and all permits, licenses, approvals,
registrations, notifications, exemptions and any other authorization pursuant
to any Environmental Law.

 

“Equity
Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity interests in any person.

 

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

 

“ERISA
Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with the Borrower, 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.

 

“ERISA
Event” shall mean (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 Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan or the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; (e) the receipt by the Borrower or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (g) the receipt by the Borrower or any of its ERISA
Affiliates of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any of its ERISA Affiliates 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; (h) the occurrence of a “prohibited transaction” with respect to
which Holdings, the Borrower, any of the Subsidiaries or any ERISA Affiliate is
a “disqualified person” (within the meaning of Section 4975 of the Code)
or with respect to which Holdings, the Borrower or any such Subsidiary or ERISA
Affiliate could otherwise be liable; or (i) any other event or condition with
respect to a Plan or Multiemployer Plan that could result in liability of the
Borrower or any ERISA Affiliate.

 

“Euro”
and “€” shall mean the single currency of participating member states of
the European Union.

 

“Euro
Term Loan” shall have the meaning assigned to such term in
Section 2.1.

 

“Euro
Term Loan Borrowing” shall mean a Borrowing comprised of Euro Term Loans.

 

“Euro
Term Loan Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make Euro Term Loans hereunder as set forth on
Schedule 2.1, or in the Assignment and Assumption pursuant to which such
Lender assumed its Euro Term Loan Commitment, as applicable, as the same may be
(i) reduced from time to time pursuant to Section 2.9 and (ii) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.4.  The
original aggregate amount of the Euro Term Loan Commitments is €36,000,000.

 

9

 

“Euro
Term Percentage”:  as to any Lender
at any time, the percentage which such Lender’s Euro Term Loan Commitment then
constitutes of the aggregate Euro Term Loan Commitments (or, at any time after
the Closing Date, the percentage which the principal amount of such Lender’s
Euro Term Loan then outstanding constitutes of the aggregate principal amount
of the Euro Term Loans then outstanding).

 

“Eurocurrency
Reserve Requirements” shall mean, for any day as applied to a Eurodollar
Loan, the aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System. “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 Eurodollar Rate.

 

“Eurodollar
Base Rate” shall mean with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum determined on the basis of
the rate for deposits in the relevant currency for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing
on the relevant page of the Telerate screen as of 11:00 A.M., Local Time, two
Business Days prior to the beginning of such Interest Period.  In the event that such rate does not appear
on the Telerate screen, the “Eurodollar Base Rate” shall be determined
by reference to such other comparable publicly available service for displaying
Eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the
Administrative Agent is offered deposits in the relevant currency at or about
11:00 A.M., Local Time, two Business Days prior to the beginning of such
Interest Period in the interbank Eurodollar market where its relevant
Eurodollar and foreign currency and exchange operations are then being
conducted for delivery on the first day of such Interest Period for the number
of days comprised therein.

 

“Eurodollar
Rate” shall mean, with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):

 

	
   

  	
  Eurodollar Base Rate

  	
   

  
	
  1.00 - Eurocurrency Reserve Requirements

  

 

“Event
of Default” shall have the meaning assigned to such term in
Article VII.

 

“Excess
Cash Flow” shall mean, for any fiscal year of the Borrower, the excess of
(a) the sum, without duplication, of (i) Consolidated EBITDA for such fiscal
year and (ii) reductions to noncash working capital of the Borrower and the
Subsidiaries for such fiscal year (i.e.,
the decrease, if any, in Current Assets minus Current Liabilities from the
beginning to the end of such fiscal year) over (b) the sum, without duplication,
of (i) the amount of any Tax Payments in cash by the Borrower and the
Subsidiaries with respect to such fiscal year, (ii) Consolidated Interest
Expense for such fiscal year payable in cash, (iii) Capital Expenditures made
in cash in accordance with Section 6.10 and cash expenditures in
connection with Permitted Acquisitions during such fiscal year, in each case
except to the extent financed with the proceeds of Indebtedness, equity
issuances or other proceeds that would not be included in Consolidated EBITDA
for such fiscal year, (iv) permanent repayments of Indebtedness (other than
mandatory prepayments of Loans under Section 2.13), including the
principal component of Capitalized Lease Obligations and Synthetic Lease
Obligations, made by the Borrower and the

 

10

 

Subsidiaries
during such fiscal year, but only to the extent that such prepayments by their
terms cannot be reborrowed or redrawn and do not occur in connection with a
refinancing of all or any portion of such Indebtedness, (v) additions to
noncash working capital for such fiscal year (i.e.,
the increase, if any, in Current Assets minus Current Liabilities from the
beginning to the end of such fiscal year), (vi) proceeds received by the Loan Parties
during such fiscal year from insurance claims with respect to casualty events,
business interruption or product recalls which reimburse prior business
expenses, (vii) management fees for such fiscal year permitted to be paid under
Section 6.6(a)(iii), (viii) cash indemnity payments received during such
fiscal year pursuant to indemnification provisions in any agreement in
connection with the Acquisition, any Permitted Acquisition or any other
Investment permitted hereunder (or in any similar agreement related to any
other acquisition consummated prior to the Closing Date), (ix) Restricted
Payments made in such fiscal year to the extent such Restricted Payments are
permitted under Section 6.6(a)(ii) and 6.6(a)(iv), (x) letter of credit
fees paid in such fiscal year, (xi) all extraordinary cash charges for such
fiscal year, (xii) cash payments made in satisfaction of current liabilities
during such fiscal year, (xiii) to the extent included in determining
Consolidated EBITDA, non-recurring cash charges for such fiscal year, (xiv) to
the extent added to Consolidated Net Income in determining Consolidated EBITDA,
losses from discontinued operations for such fiscal year, (xv) cash
expenditures made in respect of Hedging Agreements during such fiscal year to the
extent not reflected in the computation of Consolidated EBITDA, (xvi) to the
extent not deducted from Consolidated Net Income in determining Consolidated
EBITDA, cash payments for employment benefits made during such fiscal year and
(xvii) to the extent not deducted from Consolidated Net Income in determining
Consolidated EBITDA, cash payments for reserves deemed appropriate by the
Borrower for environmental liabilities during such fiscal year.  For purposes of computation of Excess Cash
Flow, Consolidated EBITDA shall be computed by excluding (A) items (iv), (v),
(vi) and, so long as no Indebtedness is incurred by Holdings, the Borrower or
any Subsidiary in connection with the buyout of the Exide Lease, item (xii) of
clause (a) of the definition of Consolidated EBITDA to the extent such items
are paid in cash during such fiscal year, (B) without duplication of clause
(b)(xvii) above and to the extent added to Consolidated Net Income in
determining Consolidated EBITDA, reserves deemed appropriate by the Borrower
for environmental liabilities for such fiscal year, (C) without duplication of
clause (b)(xvi) above and to the extent added to Consolidated Net Income in
determining Consolidated EBITDA, employment benefits for such fiscal year and
(D) to the extent added to Consolidated Net Income in determining Consolidated
EBITDA, working capital changes resulting from purchase accounting for such
fiscal year.

 

“Exchange
Rate” shall mean, on any day, with respect to any Alternative Currency, the
rate at which such Alternative Currency may be exchanged into Dollars, as set
forth at approximately 11:00 A.M., Local Time, on such day on the applicable
Reuters World Spot Page.  In the event
that any such rate does not appear on any Reuters World Spot Page, the Exchange
Rate shall be determined by reference to such other publicly available service
for displaying exchange rates reasonably selected by the Administrative Agent
in consultation with the Borrower for such purpose or, at the discretion of the
Administrative Agent in consultation with the Borrower, such Exchange Rate
shall instead be the arithmetic average of the spot rates of exchange of the
Administrative Agent in the market where its foreign currency exchange
operations in respect of such Alternative Currency are then being conducted, at
or about 11:00 A.M., Local Time, on such day for the purchase of the applicable
Alternative Currency for delivery three Business Days later, provided
that, if at the time of any such determination, for any reason, no such spot
rate is being quoted, the Administrative Agent may use any other reasonable
method it deems appropriate to determine such rate, and such determination
shall be presumed correct absent manifest error.

 

“Excluded
Taxes” shall mean, with respect to the Administrative Agent, any Lender,
the Issuing Bank 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

 

11

 

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 described in clause (a) above and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.20(a)), 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 2.19(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 2.19(a).

 

“Executive
Order” shall mean have the meaning assigned to such term in
Section 3.26.

 

“Exide
Lease” shall mean, collectively, (i) the Master Equipment Lease Agreement
dated as of December 23, 1997 between General Electric Capital
Corporation, as Lessor, and Exide Corporation, as Lessee, and (ii) the Sublease
Agreement dated as of December 15, 1999 between Exide Delaware LLC and
Daramic, Inc.

 

“Existing
Credit Agreement” shall mean the Credit Agreement, dated as of
December 15, 1999, among the Company, each of the subsidiaries of the
Company party thereto, the lenders party thereto and JPMorgan Chase Bank, as
administrative agent, as such agreement may be amended, supplemented or
otherwise modified from time to time prior to the date hereof.

 

“Facility”
shall mean each of (a) the US$ Term Commitments and the US$ Term Loans made
thereunder (the “US$ Term Facility”), (b) the Euro Term Commitments and
the Euro Term Loans made thereunder (the “Euro Term Facility”), (c) the
Incremental Term Commitments and the Incremental Term Loans made thereunder
(the “Incremental Term Facility”) and (d) the Revolving Credit
Commitments and the extensions of credit made thereunder (the “Revolving
Facility”).

 

“Federal
Funds Effective Rate” shall mean, for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal 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 of the
quotations for the day of such transactions received by JPMorgan Chase Bank
from three federal funds brokers of recognized standing selected by it.

 

“Fee
Letter” shall mean the Administrative Agent Fee Letter dated
January 30, 2004, between the Borrower and the Administrative Agent.

 

“Fee
Payment Date” shall mean (a) the third Business Day following the last day
of each March, June, September and December and (b) the Revolving
Credit Maturity Date.

 

“Fees”
shall mean the Commitment Fees, the Administrative Agent Fees, the L/C
Participation Fees, the Issuing Bank Fees and any other fees payable by a Loan
Party pursuant to a fee agreement entered into with the Administrative Agent or
any other Lender.

 

“Financial
Officer” of any person shall mean the chief financial officer, principal
accounting officer, Treasurer or Controller of such person.

 

“Financial
Performance Covenant” shall have the meaning assigned to such term in
Article VII.

 

12

 

“Foreign
Asset Control Regulations” shall mean have the meaning assigned to such
term in Section 3.26.

 

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

 

“Foreign
Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.

 

“Funded
Debt” shall mean, as to any Person, all Indebtedness of such Person that
matures more than one year from the date of its creation or matures within one
year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date
of its creation and, in the case of the Borrower, Indebtedness in respect of
the Loans.

 

“Funding
Office” shall mean the office of the Administrative Agent specified in
Section 9.1 or such other office as may be specified from time to time by
the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.

 

“GAAP”
shall mean United States of America generally accepted accounting principles.

 

“Governmental
Authority” shall mean any Federal, state, local or foreign court or
governmental agency, authority, instrumentality or regulatory body.

 

“Group
Members” shall mean the collective reference to Holdings, the Borrower and
the Subsidiaries.

 

“Guarantee”
of or by any person shall mean any obligation, contingent or otherwise, of such
person 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 such
person, 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 of such Indebtedness or other obligation, (b) to purchase or lease
property, securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment of such Indebtedness or other
obligation or (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; provided,
however, that the term “Guarantee” shall not include endorsements
for collection or deposit in the ordinary course of business.

 

“Guarantee
and Collateral Agreement” shall mean the Guarantee and Collateral Agreement
to be executed and delivered by Holdings, the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit C.

 

“Guarantors”
shall mean Holdings and the Subsidiary Guarantors.

 

“Hazardous
Materials” shall mean (a) any petroleum products or byproducts and all
other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde foam
insulation, polychlorinated

 

13

 

biphenyls,
chlorofluorocarbons and all other ozone-depleting substances and (b) any
chemical, material, substance or waste that is prohibited, limited or regulated
by or pursuant to any Environmental Law.

 

“Hedging
Agreement” shall mean any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

 

“Holdings”
shall have the meaning assigned to such term in the preamble hereto.

 

“Holdings
Equity Contribution” shall have the meaning assigned to such term in
Section 4.2(j).

 

“Inactive
Subsidiary” shall mean any Subsidiary of the Borrower that (a) does not
conduct any business operations, (b) has assets with a total book value not in
excess of $10,000 and (c) does not have any Indebtedness outstanding.

 

“Incremental
Term Lender”  shall mean a
Lender with an Incremental Term Loan Commitment or an outstanding Incremental
Term Loan.

 

“Incremental
Term Loan Amount” shall mean, at any time, the excess, if any, of (a) $200,000,000
over (b) the aggregate amount of all Incremental Term Loan Commitments
established prior to such time pursuant to Section 2.23.

 

“Incremental
Term Loan Assumption Agreement” shall mean an Incremental Term Loan
Assumption Agreement in form and substance reasonably satisfactory to the
Administrative Agent, among the Borrower, the Administrative Agent and one or
more Incremental Term Lenders.

 

“Incremental
Term Loan Borrowing” shall mean a Borrowing comprised of Incremental Term
Loans.

 

“Incremental
Term Loan Commitment” shall mean the commitment of any Lender, established
pursuant to Section 2.23, to make Incremental Term Loans to the Borrower.

 

“Incremental
Term Loan Maturity Date” shall mean the final maturity date of any
Incremental Term Loan, as set forth in the applicable Incremental Term Loan
Assumption Agreement.

 

“Incremental
Term Loan Repayment Dates” shall mean the dates scheduled for the repayment
of principal of any Incremental Term Loan, as set forth in the applicable
Incremental Term Loan Assumption Agreement.

 

“Incremental
Term Loans” shall mean Term Loans made by one or more Lenders to the
Borrower pursuant to Section 2.1(b). 
Incremental Term Loans may be made in the form of additional Term Loans
or, to the extent permitted by Section 2.23 and provided for in the
relevant Incremental Term Loan Assumption Agreement, Other Term Loans.

 

“Indebtedness”
of any person shall mean, without duplication, (a) all obligations of such
person for borrowed money, (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 or assets purchased by such person, (d) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations 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

 

14

 

by)
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed (it being understood that, unless
such person shall have assumed such obligations, the amount of such
Indebtedness shall be the lesser of (x) the fair market value of the property
securing such Indebtedness and (y) the stated principal amount of such
Indebtedness), (f) all Guarantees by such person of Indebtedness of others, (g)
all Capital Lease Obligations and Synthetic Lease Obligations of such person,
(h) all outstanding reimbursement obligations of such person as an account
party in respect of letters of credit, (i) all obligations of such person in
respect of bankers’ acceptances and (j) all obligations of such person under or
in respect of Hedging Agreements.  For
purposes of determining the amount of Indebtedness of any person under clause
(j) of the preceding sentence, the amount of the obligations of such person in
respect of any Hedging Agreement at any time shall be zero prior to the time
any counterparty to such Hedging Agreement shall be entitled to terminate such
Hedging Agreement and, thereafter, shall be the maximum aggregate amount
(giving effect to any netting agreements) that such person would be required to
pay if such Hedging Agreement were terminated at such time.  The Indebtedness of any person shall include
the Indebtedness of any partnership in which such person is a general partner
only to the extent such person is liable therefor by contract, as a matter of
law or otherwise, and shall not include any Indebtedness of such partnership
that is expressly non-recourse to such person. 
For clarification purposes, the liability of the Borrower or any
Subsidiary Guarantor to make any periodic payments to licensors in
consideration for the license of patents and technical information under
license agreements in existence on the Closing Date and any amount payable in
respect of a settlement of disputes with respect to such payments thereunder,
shall not constitute Indebtedness. 
Indebtedness incurred by Holdings pursuant to Section 6.1 shall not
be included in the computations under Sections 6.11 or 6.12.  Notwithstanding any other provision of this
Agreement to the contrary, (i) the term “Indebtedness” shall not be deemed to
include (x) any earn-out obligation until such obligation becomes a liability
on the balance sheet of the applicable Person, (y) any deferred compensation
arrangements or (z) any non compete or consulting obligations incurred in
connection with Permitted Acquisitions and (ii) the amount of Indebtedness for
which recourse is limited either to a specified amount or to an identified
asset of such Person shall be deemed to be equal to such specified amount or
the fair market value of such identified asset, as the case may be.

 

“Indemnified
Taxes” shall mean Taxes other than Excluded Taxes.

 

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

 

“Interest
Payment Date” shall mean (a) as to any ABR Loan (other than any Swingline
Loan), the last day of each March, June, September and December to occur
while such Loan is outstanding and the final maturity date of such Loan, (b) as
to any Eurodollar Loan having an Interest Period of three months or less, the
last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day that is three months, or a
whole multiple thereof, after the first day of such Interest Period and the
last day of such Interest Period, (d) as to any Loan (other than any Revolving
Loan that is an ABR Loan and any Swingline Loan), the date of any repayment or
prepayment made in respect thereof and (e) as to any Swingline Loan, the day
that such Loan is required to be repaid.

 

“Interest
Period” shall mean, as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six or (if
available to all Lenders under the relevant Facility) twelve months thereafter,
as selected by the Borrower in its notice of borrowing or notice of conversion,
as the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six or (if available to all
Lenders under the relevant Facility) twelve months thereafter, as selected by
the Borrower by irrevocable notice to the Administrative Agent not later than
11:00 A.M., Local Time, on the date that is three

 

15

 

Business
Days prior to the last day of the then current Interest Period with respect
thereto; provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:

 

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

 

(ii)           the Borrower may
not select an Interest Period under a particular Facility that would extend
beyond the Revolving Credit Maturity Date or beyond the date final payment is
due on the Term Loans, as the case may be; and

 

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

 

“Issuing
Bank” shall mean, as the context may require, (a) JPMorgan Chase Bank, in
its capacity as the issuer of Letters of Credit hereunder, and (b) any other
Lender that may become an Issuing Bank pursuant to Section 2.22(i) or
2.22(k), with respect to Letters of Credit issued by such Lender.  The Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the
Issuing Bank, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.

 

“Issuing
Bank Fees” shall have the meaning assigned to such term in
Section 2.5(c).

 

“Judgment
Currency” shall have the meaning assigned to such term in
Section 9.19.

 

“Judgment
Currency Conversion Date” shall have the meaning assigned to such term in
Section 9.19.

 

“L/C
Commitment” shall mean the commitment of the Issuing Bank to issue Letters
of Credit pursuant to Section 2.22.

 

“L/C
Disbursement” shall mean a payment or disbursement made by the Issuing Bank
pursuant to a Letter of Credit.

 

“L/C
Exposure” shall mean at any time the Dollar Equivalent of the sum of (a)
the aggregate undrawn amount of all outstanding Letters of Credit at such time
and (b) the aggregate principal amount of all L/C Disbursements that have not
yet been reimbursed at such time.  The
L/C Exposure of any Revolving Credit Lender at any time shall equal its Pro
Rata Percentage of the aggregate L/C Exposure at such time.

 

“L/C
Participation Fee” shall have the meaning assigned to such term in
Section 2.5(c).

 

“Lenders”
shall mean (a) the persons listed on Schedule 2.1 (other than any such
person that has ceased to be a party hereto pursuant to an Assignment and
Assumption) and (b) any person that has become a party hereto pursuant to an
Assignment and Assumption.  Unless the
context clearly indicates otherwise, the term “Lenders” shall include the
Swingline Lender.

 

“Letter
of Credit” shall mean any letter of credit issued pursuant to
Section 2.22.

 

16

 

“Leverage
Ratio” shall mean, on any date, the ratio of the total Indebtedness of the
Borrower and the Subsidiaries on a consolidated basis on such date to
Consolidated EBITDA for the period of four consecutive fiscal quarters most
recently ended on or prior to such date.

 

“Lien”
shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, encumbrance, charge or security interest in or on 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.

 

“Loan
Documents” shall mean this Agreement, the Letters of Credit, the Security
Documents, any fee letters entered into between any Loan Party and the
Administrative Agent or any Lender and each Incremental Term Loan Assumption
Agreement.

 

“Loan
Parties” shall mean the Borrower and the Guarantors.

 

“Loans”
shall mean the Revolving Loans, the Term Loans and the Swingline Loans.

 

“Local
Time” shall mean (a) in the case of Alternative Currency Loans or Letters
of Credit denominated in an Alternative Currency, London time (or, in the case
of the definition of “Eurodollar Base Rate” with respect to Loans denominated
in Euros, Brussels time) and (b) in all other cases, New York City time.

 

“Margin
Stock” shall have the meaning assigned to such term in Regulation U.

 

“Material
Adverse Effect” shall mean (a) a materially adverse effect on the business,
operations, assets, liabilities, financial condition or results of operations
of Holdings, the Borrower and the Subsidiaries, taken as a whole, (b) a
material impairment of the ability of the Borrower or any other Loan Party to
perform any of its obligations under any Loan Document to which it is or will
be a party or (c) a material impairment of the rights of or benefits available
to the Lenders under any Loan Document.

 

“Material
Indebtedness” shall mean Indebtedness (other than the Loans and Letters of
Credit) of any one or more of Holdings, the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $10,000,000.

 

“Material
Subsidiary” shall mean, at any time, any Subsidiary which at such time
shall be a “significant subsidiary” of the Borrower within the meaning of
Regulation S-X of the SEC as in effect on the date hereof; provided,
that the Borrower and its Material Subsidiaries shall at all times have assets
during the term of this Agreement constituting at least 90% of the Borrower’s
consolidated total assets; provided, further, that each
Subsidiary which owns any Intellectual Property (other than Intellectual
Property with an aggregate fair market value of less than $1,500,000) shall be
deemed to be a Material Subsidiary hereunder.

 

“Materials
of Environmental Concern” shall mean any gasoline or petroleum (including
crude oil or any fraction thereof) or petroleum products, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation, molds, pollutants,
contaminants, radioactivity, radiofrequency radiation or any other radiation
associated with or allegedly associated with the telecommunications business,
and any other substance of any kind that is regulated pursuant to or gives rise
to liability under any applicable Environmental Law.

 

“Maximum
Rate” shall have the meaning assigned to such term in Section 9.9.

 

17

 

“Merger”
shall have the meaning assigned to such term in the recitals.

 

“Mortgaged
Properties” shall mean, initially, the real properties owned or leased by
the Loan Parties specified on Schedule 1.1(b), and shall include each
parcel of real property and improvements thereto with respect to which a
Mortgage is granted pursuant to Section 5.9.

 

“Mortgages”
shall mean the mortgages, deeds of trust, leasehold mortgages, assignments of
leases and rents, modifications and other security documents delivered pursuant
to clause (i) of Section 4.2(h) or pursuant to Section 5.9, each
substantially in the form of Exhibit F.

 

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

 

“Net
Cash Proceeds” shall mean (a) with respect to any Asset Sale or Recovery
Event, the cash proceeds (including cash proceeds subsequently received (as and
when received) in respect of noncash consideration initially received), net of
(i) selling expenses (including reasonable broker’s and investment banking fees
or commissions, legal, environmental assessment, appraisal and consultant’s
fees, transfer and similar taxes and the Borrower’s good faith estimate of
income taxes paid or payable in connection with such sale), (ii) amounts
provided as a reserve, in accordance with GAAP, against (A) any liabilities
under any indemnification obligations or purchase price adjustment associated
with such Asset Sale and (B) any liabilities associated with such asset or assets
and retained by the Borrower or any of its Subsidiaries after such sale or
other disposition thereof, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to environmental
matters or against any indemnification obligations associated with such
transaction (provided, that, to the extent and at the time any such
amounts are released from such reserve, such amounts shall constitute Net Cash
Proceeds) and (iii) the principal amount, premium or penalty, if any, interest
and other amounts on any Indebtedness for borrowed money which is secured by
the asset sold in such Asset Sale or the asset relating to such Recovery Event,
as applicable, and which is required to be repaid with such proceeds (other than
any such Indebtedness assumed by the purchaser of such asset); provided,
however, that, if (x) the Borrower shall deliver a certificate of a
Financial Officer to the Administrative Agent at the time of receipt thereof
setting forth the Borrower’s intent to reinvest such proceeds in productive
assets of a kind used or useful in the business of the Borrower and its
Subsidiaries within 365 days of receipt of such proceeds and (y) no Default or
Event of Default shall have occurred and shall be continuing at the time of
such certificate or at the proposed time of the application of such proceeds,
such proceeds shall not constitute Net Cash Proceeds except to the extent not
so used or contractually committed to be used at the end of such 365-day
period, at which time such proceeds shall be deemed to be Net Cash Proceeds;
and (b) with respect to any issuance or disposition of Indebtedness, the cash
proceeds thereof, net of all taxes and fees (including investment banking fees,
underwriting discounts, commissions, costs and other out-of-pocket expenses and
other customary expenses) incurred in connection therewith.

 

“Not
Otherwise Applied” shall mean, with reference to any amount of Net Cash
Proceeds of any transaction or event or of Excess Cash Flow, that such amount
was not required to be applied to prepay the Loans pursuant to
Section 2.13(c).

 

“Obligation
Currency” shall have the meaning assigned to such term in
Section 9.19.

 

“Obligations”
the unpaid principal of and interest on (including interest accruing after the
maturity of the Loans (including the Incremental Term Loans) and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the

 

18

 

Borrower
to the Administrative Agent or to any Lender (or, in the case of Specified
Hedging Agreements, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement,
any other Loan Document, the Letters of Credit, any Specified Hedging Agreement
or any other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise.

 

“OID”
shall have the meaning assigned to such term in Section 2.23(b).

 

“Other
Taxes” shall mean 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 under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.

 

“Other
Term Loans” shall have the meaning assigned to such term in
Section 2.23(a).

 

“Parent”
shall mean any direct or indirect parent of Holdings.

 

“Participant”
shall have the meaning assigned to such term in Section 9.4(c).

 

“Patriot
Act shall have the meaning assigned to such term in Section 9.17.

 

“PBGC”
shall mean the Pension Benefit Guaranty Corporation referred to and defined in
ERISA.

 

“Perfection
Certificate” shall mean the Perfection Certificate substantially in the
form of Exhibit D, prepared by the Borrower.

 

“Permitted
Acquisition” shall have the meaning assigned to such term in
Section 6.4(g).

 

“Permitted
Cure Securities” shall have the meaning assigned to such term in
Article VII.

 

“Permitted
Investments” shall mean:

 

(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) or, in the case of a Foreign
Subsidiary, marketable direct obligations issued by or unconditionally
guaranteed by the government of the country of such Foreign Subsidiary or backed
by the full faith and credit of the government of the country of such Foreign
Subsidiary, 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, one of the
two highest credit ratings obtainable from Standard & Poor’s Ratings
Service or from Moody’s Investors Service, Inc. or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two named
rating agencies cease publishing ratings of investments;

 

(c) investments in certificates of deposit, Eurodollar deposits,
overnight bank deposits or banker’s acceptances, demand deposits and time
deposits maturing within one year from the date

 

19

 

of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, the Administrative Agent or any domestic
office of any Lender or any other commercial bank organized under the laws of
the United States of America or any State thereof that has a combined capital
and surplus and undivided profits of not less than $500,000,000 or issued by or
offered by a bank organized under the laws of any foreign country recognized by
the United States the long-term debt of which is rated at least “A” or the
equivalent by S&P or “A” or the equivalent thereof by Moody’s having at the
date of acquisition thereof combined capital and surplus of not less than $500,000,000
or the foreign currency equivalent thereof;

 

(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 of clause (c) above;

 

(e) investments in marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof 
maturing within one year from the date of acquisition thereof and
having, at such date of acquisition, one of the two highest credit ratings
obtainable from Standard & Poor’s Ratings Service or from Moody’s Investors
Service, Inc.;

 

(f) investments in “money market funds” within the meaning of Rule 2a-7
of the Investment Company Act of 1940, as amended, substantially all of whose
assets are invested in investments of the type described in clauses (a) through
(e) above;

 

(g) other short-term investments utilized by Foreign Subsidiaries in
accordance with normal investment practices for cash management in investments
of a type analogous to the foregoing; and

 

(h) solely with respect to any Foreign Subsidiary, non-Dollar
denominated (i) certificates of deposit of, bankers acceptances of, or time
deposits with, any commercial bank which is organized and existing under the
laws of the country in which such Foreign Subsidiary maintains its chief
executive office and principal place of business provided such country is a
member of the Organization for Economic Cooperation and Development, and whose
short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof
(any such bank being an “Approved Foreign Bank”) and maturing within
twelve (12) months of the date of acquisition and (ii) equivalents of demand
deposit accounts which are maintained with an Approved Foreign Bank.

 

“Permitted
Investors” shall mean (a) the Sponsor, (b) the other holders of Equity
Interests in Holdings on the Closing Date and, to the extent approved by the
Administrative Agent (such approval not to be unreasonably withheld) other
persons who, within 45 days after the Closing Date, become holders of Equity
Interests in Holdings (and any Affiliate of any such person under this clause
(b)) and (c) the directors, executive officers and other management employees
of Holdings or the Borrower on the Closing Date.

 

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

 

“Plan”
shall mean 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 Borrower 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.

 

20

 

“Pricing
Grid” the table set forth below.

 

	
  Leverage Ratio

  	
   

  	
  Eurodollar
  Spread-

  Revolving Loans and

  Swingline Loans

  	
   

  	
  ABR
  Spread-

  Revolving Loans and

  Swingline Loans

  	
   

  
	
  Category 1

   

  Greater than 3.50 to 1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 2

   

  Greater than 3.00 to 1.00, but less than or equal to 3.50 to 1.00

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 3

   

  Greater than 2.50 to 1.00, but less than or equal to 3.00 to 1.00

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 4

   

  Less than or equal to 2.50 to 1.00

  	
   

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  

 

Each
change in the Applicable Percentage resulting from a change in the Leverage
Ratio shall be effective with respect to all Loans and Letters of Credit
outstanding on and after the date (the “Adjustment Date”) of delivery to
the Administrative Agent of the financial statements and certificates required
by Section 5.4(a) or (b) and Section 5.4(c), respectively, indicating
such change, and until the date immediately preceding the next date of delivery
of such financial statements and certificates indicating another such change.  Notwithstanding the foregoing, until the
Borrower shall have delivered the financial statements and certificates
required by Section 5.4(b) and Section 5.4(d), respectively, for the
fiscal period ended on or about June 30, 2004, the Leverage Ratio shall be
deemed to be in Category 1 for purposes of determining the Applicable
Percentage. In addition, (a) at any time during which the Borrower has failed
to deliver the financial statements and certificates required by
Section 5.4(a) or (b) and Section 5.4(c), respectively, or (b) at any
time after the occurrence and during the continuance of an Event of Default,
the Administrative Agent or the Required Lenders may require that the Leverage
Ratio shall be deemed to be in Category 1 for purposes of determining the
Applicable Percentage.

 

“Pro
Forma Basis” shall mean, with respect to compliance with any test or
covenant hereunder, compliance with such covenant or test after giving effect
to any proposed Permitted Acquisition, the proposed Exide Lease buyout or Asset
Sale (including pro forma adjustments arising out of events which are directly
attributable to the proposed Permitted Acquisition or Asset Sale, are factually
supportable and are expected to have a continuing impact, in each case as
reasonably determined by the Borrower and as certified by a Financial Officer
of the Borrower and approved by the Administrative Agent) using, for purposes
of determining such compliance, the historical financial statements of all
entities or assets so acquired or sold or to be acquired or sold and the
consolidated financial statements of the Borrower and its Subsidiaries which
shall be reformulated as if such Permitted Acquisitions or Asset Sale, and all
other Permitted Acquisitions or Asset Sales that have been consummated during
the period, and any Indebtedness or other liabilities incurred or repaid in
connection with any such Permitted Acquisitions or Asset Sale had been
consummated and incurred or repaid at the beginning of such period  (and if such

 

21

 

Indebtedness
has a floating or formula rate, shall have an implied rate of interest for the
applicable period for purposes of this definition determined by utilizing the
rate which is or would be in effect with respect to such Indebtedness as at the
relevant date of determination); provided, that, in connection with any
Permitted Acquisition and the buyout of the Exide Lease, the Borrower shall be
permitted to assume cost savings certified by a Responsible Officer of the
Borrower and expected to be achieved within a twelve-month period following the
closing of such Permitted Acquisition if the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated
statements of income and stockholders’ equity and of cash flows for the period
in respect of which Consolidated EBITDA is to be calculated (x) have been
previously provided to the Administrative Agent and (y) either (1) have been
reported on without a qualification arising out of the scope of the audit by
independent certified public accountants of nationally recognized standing or
(2) have been found acceptable by the Administrative Agent.  For purposes of determining compliance with
the covenants set forth in Sections 6.11 and 6.12 (and the computations made
for purposes of determining the Applicable Percentage), all calculations shall
be made on a Pro Forma Basis after giving effect to the Transactions, treating
each as if it were a Permitted Acquisition (subject, in the case of the
Transactions, to the limitations contained in clause (a)(iv) of the definition
of Consolidated EBITDA).

 

“Pro
Forma Compliance” shall mean, at any date of determination, that the
Borrower shall be in pro forma compliance with the covenants set forth in
Sections 6.11 and 6.12 as of the date of such determination or the last day of
the most recent fiscal quarter-end, as the case may be (computed on the basis
of (a) balance sheet amounts as of such date and (b) income statement amounts
for the most recently completed period of four consecutive fiscal quarters for
which financial statements shall have been delivered to the Administrative
Agent and calculated on a Pro Forma Basis in respect of the event giving rise
to such determination).

 

“Pro
Rata Percentage” shall mean, of any Revolving Credit Lender at any time
shall mean the percentage of the Total Revolving Credit Commitment represented
by such Lender’s Revolving Credit Commitment. 
In the event the Revolving Credit Commitments shall have expired or been
terminated, the Pro Rata Percentages shall be determined on the basis of the
Revolving Credit Commitments most recently in effect.

 

“Proposed
Restructuring” shall mean the proposed restructuring of the Borrower and
its Subsidiaries as set forth in Schedule 1.1(d) hereto.

 

“Public
Equity Offering” shall mean an underwritten public offering of common stock
of, and by, Holdings or Parent pursuant to a registration statement filed with
the SEC in accordance with the Securities Act of 1933, as amended, which yields
not less than $75,000,000 in Net Cash Proceeds to Holdings.

 

“Recovery
Event” shall mean any settlement of or payment in respect of any property
or casualty insurance claim or any condemnation proceeding relating to any
asset of any Loan Party.

 

“Register”
shall have the meaning assigned to such term in Section 9.4(b).

 

“Regulation
T” shall mean Regulation T of the Board as from time to time in effect and
all official rulings and interpretations thereunder or thereof.

 

“Regulation
U” shall mean Regulation U of the Board as from time to time in effect and
all official rulings and interpretations thereunder or thereof.

 

22

 

“Regulation
X” shall mean Regulation X of the Board as from time to time in effect and
all official rulings and interpretations thereunder or thereof.

 

“Reimbursement
Obligation” shall mean the obligation of the Borrower to reimburse the
Issuing Bank pursuant to Section 2.22(e) for amounts drawn under Letters
of Credit.

 

“Related
Parties” shall mean, 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.

 

“Release”
shall mean any release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into or through
the environment or within or upon any building, structure, facility or fixture.

 

“Repayment
Date” shall have the meaning assigned to such term in Section 2.11.

 

“Required
Lenders” shall mean, at any time, the holders of more than 50% of (a) until
the Closing Date, the Commitments then in effect and (b) thereafter, the sum of
(i) the aggregate unpaid principal amount of the Term Loans then outstanding
and (ii) the Total Revolving Credit Commitments then in effect or, if the
Revolving Credit Commitments have been terminated, the total Revolving Credit
Exposure of all Lenders at such time; provided, that the unused Term
Commitment, unused Revolving Credit Commitment of, and the portion of the Term
Loans and Revolving Credit Exposure held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders.

 

“Reset
Date” shall have the meaning assigned to such term in Section 1.5.

 

“Responsible
Officer” of any person shall mean any executive officer or Financial
Officer of such person and any other officer or similar official thereof responsible
for the administration of the obligations of such person in respect of this
Agreement.

 

“Restricted
Indebtedness” shall mean Indebtedness of Holdings, the Borrower or any
Subsidiary, the payment, prepayment, repurchase or defeasance of which is restricted
under Section 6.9(b).

 

“Restricted
Payment” shall mean any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in Holdings,
the Borrower 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 Equity Interests in Holdings, the Borrower or any Subsidiary or any option,
warrant or other right to acquire any such Equity Interests in Holdings, the
Borrower or any Subsidiary.

 

“Revolving
Credit Borrowing” shall mean a Borrowing comprised of Revolving Loans.

 

“Revolving
Credit Commitment” shall mean, as to any Lender, the obligation of such
Lender, if any, to make Revolving Credit Loans and participate in Swingline
Loans and Letters of Credit in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading “Revolving Credit Commitment” opposite
such Lender’s name on Schedule 2.1 or in the Assignment and Assumption
pursuant to which such Lender became a party hereto, as the same may be changed
from time to time pursuant to the terms hereof.

 

23

 

“Revolving
Credit Exposure” shall mean, with respect to any Lender at any time, the
aggregate principal amount at such time of all outstanding Revolving Loans of
such Lender, plus the aggregate amount at such time of such Lender’s L/C
Exposure, plus the aggregate amount at such time of such Lender’s
Swingline Exposure.  In the case of
Revolving Loans denominated in Alternative Currencies, such amount shall be
calculated using the Dollar Equivalent thereof.

 

“Revolving
Credit Lender” shall mean a Lender with a Revolving Credit Commitment or an
outstanding Revolving Loan.

 

“Revolving
Credit Maturity Date” shall mean May 13, 2010.

 

“Revolving
Loans” shall mean the revolving loans made by the Lenders to the Borrower
pursuant to clause (iii) of Section 2.1(a).

 

“SEC”
shall mean the Securities and Exchange Commission, any successor thereto and
any analogous Governmental Authority.

 

“Secured
Parties” shall have the meaning assigned to such term in the Guarantee and
Collateral Agreement.

 

“Security
Documents” shall mean the Mortgages, the Guarantee and Collateral Agreement
and each of the security agreements, mortgages and other instruments and
documents executed and delivered pursuant to any of the foregoing or pursuant
to Section 5.9.

 

“Senior
Subordinated Note Indenture” shall mean the Indenture entered into by the
Borrower and certain of the Subsidiary Guarantors in connection with the
issuance of the Senior Subordinated Notes, together with all instruments and
other agreements entered into by the Borrower or such Subsidiary Guarantor in
connection therewith.

 

“Senior
Subordinated Notes” shall mean (a) the 8 3⁄4% subordinated notes of the
Borrower issued on or about the Closing Date pursuant to the Senior
Subordinated Note Indenture, together with any exchange notes or any
replacement notes issued under the Senior Subordinated Note Indenture and (b)
additional subordinated notes of the Borrower issued after the Closing Date
pursuant to the Senior Subordinated Note Indenture to the extent permitted
under Section 6.1.

 

“Specified
Hedging Agreement” shall mean any Hedging Agreement entered into by the
Borrower and any Lender or affiliate thereof in respect of interest rates.

 

“Sponsor”
shall mean Warburg Pincus Private Equity VIII, L.P., Warburg Pincus
International Partners, L.P. and their respective Affiliates.

 

“subsidiary”
shall mean, with respect to any person (herein referred to as the “parent”),
any corporation, partnership, association or other business entity of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or more than 50% of the
general partnership interests are, at the time any determination is being made,
owned, controlled or held by the parent or one or more subsidiaries of the
parent or a combination thereof.

 

“Subsidiary”
shall mean any subsidiary of the Borrower.

 

“Subsidiary
Guarantor” shall mean each Subsidiary listed on Schedule 1.1(a), and
each other Subsidiary that is or becomes a party to the Guarantee and Collateral
Agreement.

 

24

 

“Swingline
Commitment” shall mean the commitment of the Swingline Lender to make loans
pursuant to Section 2.21, as the same may be reduced from time to time
pursuant to Section 2.9 or Section 2.21.

 

“Swingline
Exposure” shall mean at any time the aggregate principal amount at such
time of all outstanding Swingline Loans. 
The Swingline Exposure of any Revolving Credit Lender at any time shall
equal its Pro Rata Percentage of the aggregate Swingline Exposure at such time.

 

“Swingline
Lender” shall mean JPMorgan Chase Bank, in its capacity as lender of
Swingline Loans hereunder.

 

“Swingline
Loan” shall mean any loan made by the Swingline Lender pursuant to
Section 2.21.

 

“Syndication
Agent” shall have the meaning assigned to such term in the preamble hereto.

 

“Synthetic
Lease” shall mean, as to any person, any lease (including leases that may
be terminated by the lessee at any time) of any property (whether real,
personal or mixed) (a) that is accounted for as an operating lease under GAAP
and (b) in respect of which the lessee retains or obtains ownership of the
property so leased for U.S. federal income tax purposes, other than any such
lease under which such person is the lessor.

 

“Synthetic
Lease Obligations” shall mean, as to any person, an amount equal to the sum
of (a) the obligations of such person to pay rent or other amounts under any
Synthetic Lease which are attributable to principal and, without duplication,
(b) the amount of any purchase price payment under any Synthetic Lease assuming
the lessee exercises the option to purchase the leased property at the end of
the lease term.

 

“Synthetic
Purchase Agreement” shall mean any swap, derivative or other agreement or
combination of agreements pursuant to which Holdings, the Borrower or any
Subsidiary is or may become obligated to make (a) any payment in connection
with a purchase by any third party from a person other than Holdings, the
Borrower or any Subsidiary of any Equity Interest or Restricted Indebtedness of
Holdings, the Borrower or a Subsidiary or (b) any payment (other than on
account of a permitted purchase by it of any Equity Interest or Restricted
Indebtedness) the amount of which is determined by reference to the price or value
at any time of any Equity Interest or Restricted Indebtedness of Holdings, the
Borrower or a Subsidiary; provided, that no phantom stock or similar
plan providing for payments only to current or former directors, officers or
employees of Holdings, the Borrower or the Subsidiaries (or to their heirs or
estates) shall be deemed to be a Synthetic Purchase Agreement.

 

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

 

“Tax
Payments” shall mean net payments in cash by the Borrower (or by Holdings
or Parent on behalf of the Borrower) to Holdings in respect of Taxes pursuant
to the Tax Sharing Agreement.

 

“Tax
Sharing Agreement” shall mean the Tax Sharing Agreement dated as of the
Closing Date among Holdings, Parent, the Borrower and certain Subsidiaries.

 

“Term
Loan Commitment” shall mean, with respect to any Lender, such Lender’s (a)
US$ Term Loan Commitment, (b) Euro Term Loan Commitment and (c) Incremental
Term Loan Commitment.

 

“Term
Loan Maturity Date” shall mean November 12, 2011.

 

25

 

“Term
Loans” shall mean the term loans made by the Lenders to the Borrower
pursuant to clauses (i) and (ii) of Section 2.1(a).  Unless the context shall otherwise require,
the term “Term Loans” shall include Incremental Term Loans.

 

“Total
Enterprise Value” shall mean the sum of (a) the Holdings Equity
Contribution and (b) the aggregate principal amount of Funded Debt of the
Borrower as of the Closing Date (after giving effect to the Transactions).

 

“Total
Revolving Credit Commitment” shall mean, at any time, the aggregate amount
of the Revolving Credit Commitments, as in effect at such time. The initial
Total Revolving Credit Commitment is $90,000,000.

 

“Trading
With the Enemy Act” shall have the meaning assigned to such term in
Section 3.26.

 

“Transactions”
shall mean, collectively, (a) the execution, delivery and performance by
Holdings and the Borrower of the Acquisition Agreement and the consummation of
the Acquisition, (b) the execution, delivery and performance by the Loan
Parties of the Loan Documents to which they are a party and, in the case of the
Borrower, the making of the initial Borrowings hereunder, (c) the execution,
delivery and performance by the Loan Parties of the Senior Subordinated Note
Indenture and related documents to which they are a party and, in the case of
the Borrower, the issuance of the Senior Subordinated Notes, (d) the repayment
of all amounts outstanding or due under, and the termination of, the Existing
Credit Agreement, (e) the Holdings Equity Contribution and (e) the payment of
related fees and expenses.

 

“Type”,
when used in respect of any Loan or Borrowing, shall refer to the Rate by
reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined.  For purposes
hereof, the term “Rate” shall include the Eurodollar Rate and the
Alternate Base Rate.

 

“Uniform
Customs” shall have the meaning assigned to such term in Section 9.7.

 

“US$
Term Loan” shall have the meaning assigned to such term in
Section 2.1.

 

“US$
Term Loan Borrowing” shall mean a Borrowing comprised of US$ Term Loans.

 

“US$
Term Loan Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make US$ Term Loans hereunder as set forth on
Schedule 2.1, or in the Assignment and Assumption pursuant to which such
Lender assumed its US$ Term Loan Commitment, as applicable, as the same may be
(i) reduced from time to time pursuant to Section 2.9 and (ii) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.4.  The
original aggregate amount of the US$ Term Loan Commitments is $370,000,000.

 

“US$
Term Percentage”:  as to any Lender
at any time, the percentage which such Lender’s US$ Term Loan Commitment then
constitutes of the aggregate US$ Term Loan Commitments (or, at any time after
the Closing Date, the percentage which the principal amount of such Lender’s
US$ Term Loan then outstanding constitutes of the aggregate principal amount of
the US$ Term Loans then outstanding).

 

“wholly
owned Subsidiary” of any person shall mean a subsidiary of such person of
which securities (except for directors’ qualifying shares and other de minimis
ownership interests required to be owned under foreign law by local residents)
or other ownership interests representing 100% of the Equity Interests are, at
the time any determination is being made, owned, controlled or held by such person
or

 

26

 

one
or more wholly owned Subsidiaries of such person or by such person and one or
more wholly owned Subsidiaries of such person.

 

“Withdrawal
Liability” shall mean 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
1.2.  Terms Generally.  The definitions in Section 1.1 shall
apply equally to both 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”; and the
words “asset” and “property” shall be construed as having 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.  All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, this Agreement unless the context shall
otherwise require.  Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or otherwise
modified from time to time and (b) all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided, however, that if, before or after any change in GAAP occurs,
the Borrower notifies the Administrative Agent that the Borrower wishes to
amend any covenant in Article VI or any related definition to eliminate
the effect of any such change in GAAP occurring after the date of this
Agreement on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Article VI
or any related definition for such purpose), then the Borrower’s compliance
with such covenant (and the computations made for purposes of determining the
Applicable Percentage) shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory
to the Borrower and the Required Lenders.

 

                SECTION
1.3.  Pro Forma Calculations.  With respect to any period during which any
Permitted Acquisition, the buyout of the Exide Lease or Asset Sale occurs as
permitted pursuant to the terms hereof, the Leverage Ratio and the Interest
Coverage Ratio shall be calculated with respect to such period and such
Permitted Acquisition or Asset Sale on a Pro Forma Basis.

 

                SECTION
1.4.  Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be
classified and referred to by Class (e.g., a “Revolving Loan”) or by
Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar
Revolving Loan”).  Borrowings also
may be classified and referred to by Class (e.g., a “Revolving Borrowing”)
or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g.,
a “Eurodollar Revolving Borrowing”).

 

                SECTION
1.5.  Exchange Rates.  (a) 
Not later than 1:00 P.M., Local Time, on each Calculation Date, the
Administrative Agent shall (i) determine the Exchange Rate as of such
Calculation Date for each Alternative Currency in which a Loan is then
outstanding and (ii) give notice thereof to the Borrower.  The Exchange Rates so determined shall
become effective on the first Business Day immediately following the relevant
Calculation Date (a “Reset Date”) and shall remain effective until the
next succeeding Reset Date.

 

(b)  Not later than 2:00 P.M., Local Time, on
each Reset Date with respect to the Revolving Facility, the Administrative
Agent shall (i) determine the aggregate amount of Revolving Credit Exposure on
such date (after giving effect to any Multicurrency Revolving Loans to be made
in connection with such determination) and (ii) notify the Borrower of such
determination.

 

27

 

                SECTION
1.6.  Currency Equivalents Generally.  Any amount specified in this Agreement
(other than in Articles 2, 8 and 9) or any of the other Loan Documents to be in
Dollars shall also include the equivalent of such amount in any currency other
than Dollars, such equivalent amount to be determined at the rate of exchange
quoted by JPMorgan Chase Bank in New York, New York at the close of business on
the Business Day immediately preceding any date of determination thereof, to
prime banks in New York, New York for the spot purchase in the New York foreign
exchange market of such amount in Dollars with such other currency; provided
that the determination of any Dollar Equivalent shall be made in accordance
with the definition of “Dollar Equivalent”. 
The maximum amount of Indebtedness, investments and other threshold
amounts that Holdings, the Borrower and the Subsidiaries may incur under
Article VI shall not be deemed to be exceeded, with respect to any
outstanding Indebtedness, investments and other threshold amounts solely as a
result of fluctuations in the exchange rate of currencies.  When calculating capacity for the incurrence
of additional Indebtedness, investments and other threshold amounts by
Holdings, the Borrower and any Subsdiary, the exchange rate of currencies shall
be measured as of the date of such calculation.

 

ARTICLE II

 

The Credits

 

                SECTION
2.1.  Commitments.  (a)  Subject to the terms
and conditions and relying upon the representations and warranties herein set
forth, each Lender agrees, severally and not jointly, (i) to make a term loan
to the Borrower in Dollars (a “US$ Term Loan”) on the Closing Date in a
principal amount not to exceed its US$ Term Loan Commitment, (ii) to make a
term loan to the Borrower in Euros (a “Euro Term Loan”) on the Closing
Date in a principal amount not to exceed its Euro Term Loan Commitment and
(iii) to make Revolving Loans to the Borrower in Dollars or in an Alternative
Currency, at any time and from time to time on or after the date hereof, and
until the earlier of the Revolving Credit Maturity Date and the termination of
the Revolving Credit Commitment of such Lender in accordance with the terms
hereof, in an aggregate principal amount at any time outstanding that will not
result in (a) such Lender’s Revolving Credit Exposure exceeding such Lender’s
Revolving Credit Commitment or (b) the Aggregate Alternative Currency Exposure
of all Lenders exceeding the Alternative Currency Sublimit.  Within the limits set forth in clause (iii)
of the preceding sentence and subject to the terms, conditions and limitations
set forth herein, the Borrower may borrow, pay or prepay and reborrow Revolving
Loans.  Amounts paid or prepaid in
respect of Term Loans may not be reborrowed.

 

(b)           Incremental Term
Loans.  Each Lender having an
Incremental Term Loan Commitment hereby agrees, severally and not jointly, on
the terms and subject to the conditions set forth herein and in the applicable
Incremental Term Loan Assumption Agreement and in reliance on the
representations and warranties set forth herein and in the other Loan documents,
to make Incremental Term Loans to the Borrower, in an aggregate principal
amount not to exceed its Incremental Term Loan Commitment.  Amounts paid or prepaid in respect of
Incremental Term Loans may not be reborrowed.

 

                SECTION
2.2.  Loans.  (a)  Each Loan (other than
Swingline Loans) shall be made as part of a Borrowing consisting of Loans made
by the Lenders ratably in accordance with their applicable Commitments; provided,
however, that the failure of any Lender to make any Loan shall not in
itself relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender).  Except for Swingline Loans and Loans deemed
made pursuant to Section 2.2(f), the Loans comprising any Borrowing shall
be in an aggregate principal amount that is (i) (A) in the case of a Revolving
Borrowing denominated in US Dollars, an integral multiple of $1,000,000 and not
less than $1,000,000, (B) in the case of a Revolving Borrowing denominated in
Euros, an integral multiple of €1,000,000 and not less than €1,000,000, (C) in
the case of a US$ Term Loan Borrowing or an

 

28

 

Incremental
Term Loan Borrowing, an integral multiple of $1,000,000 and not less than
$5,000,000 (except with respect to any Incremental Term Loan Borrowing, to the
extent otherwise provided in the related Incremental Term Loan Assumption
Agreement) and (D) in the case of a Euro Term Loan Borrowing, an integral
multiple of €1,000,000 and not less than €5,000,000 or (ii) in the case of any
Borrowing, equal to the remaining available balance of the applicable
Commitments.

 

(b)           Subject to
Section 2.8, each Borrowing shall be comprised entirely of Eurodollar
Loans or, with respect to Term Loans or Revolving Loans denominated in Dollars,
ABR Loans, as the Borrower may request pursuant to Section 2.3.  Each Lender may at its option 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. 
Borrowings of more than one Type may be outstanding at the same time; provided,
however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than ten (10) Eurodollar
Borrowings outstanding hereunder at any time. 
For purposes of the foregoing, Borrowings having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Borrowings.

 

(c)           Except with respect
to Swingline Loans and Loans made pursuant to Section 2.2(f), each Lender
shall make each Loan to be made by it hereunder on the proposed date thereof by
wire transfer of immediately available funds to the Funding Office not later
than 12:00 (noon), Local Time, and the Administrative Agent shall promptly
transfer the amounts so received to the account designated by the Borrower in
the applicable Borrowing Request or, if a Borrowing shall not occur on such
date because any condition precedent herein specified shall not have been met,
return the amounts so received to the respective Lenders.

 

(d)           Unless the Administrative
Agent shall have received notice from a Lender prior to the date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s portion of such Borrowing, the Administrative Agent may assume
that such Lender has made such portion available to the Administrative Agent on
the date of such Borrowing in accordance with paragraph (c) above and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount.  If the Administrative Agent shall have so made funds available
then, to the extent that such Lender shall not have made such portion available
to the Administrative Agent, such Lender and the Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, a rate determined by the Administrative Agent to represent
its cost of overnight or short-term funds (which determination shall be conclusive
absent manifest error).  If such Lender
shall repay to the Administrative Agent such corresponding amount, such amount
shall constitute such Lender’s Loan as part of such Borrowing for purposes of
this Agreement.

 

(e)           Notwithstanding any
other provision of this Agreement, the Borrower shall not be entitled to
request any Revolving Credit Borrowing if the Interest Period requested with
respect thereto would end after the Revolving Credit Maturity Date.

 

(f)            If the Issuing Bank
shall not have received from the Borrower the payment required to be made by
Section 2.22(e) within the time specified in such Section, the Issuing
Bank will promptly notify the Administrative Agent of the L/C Disbursement and
the Administrative Agent will promptly notify each Revolving Credit Lender of
such L/C Disbursement and its Pro Rata Percentage thereof.  Each Revolving Credit Lender shall pay by
wire transfer of immediately available funds to the Administrative

 

29

 

Agent not later than 2:00 p.m., New York City time, on such date (or,
if such Revolving Credit Lender shall have received such notice later than
12:00 (noon), New York City time, on any day, not later than 10:00 a.m., New
York City time, on the immediately following Business Day), an amount equal to
such Lender’s Pro Rata Percentage of such L/C Disbursement (it being understood
that such amount shall be deemed to constitute an ABR Revolving Loan of such
Lender and such payment shall be deemed to have reduced the L/C Exposure), and
the Administrative Agent will promptly pay to the Issuing Bank amounts so
received by it from the Revolving Credit Lenders.  The Administrative Agent will promptly pay to the Issuing Bank
any amounts received by it from the Borrower pursuant to Section 2.22(e)
prior to the time that any Revolving Credit Lender makes any payment pursuant
to this paragraph (f); any such amounts received by the Administrative Agent
thereafter will be promptly remitted by the Administrative Agent to the Revolving
Credit Lenders that shall have made such payments and to the Issuing Bank, as
their interests may appear.  If any
Revolving Credit Lender shall not have made its Pro Rata Percentage of such L/C
Disbursement available to the Administrative Agent as provided above, such
Lender and the Borrower severally agree to pay interest on such amount, for
each day from and including the date such amount is required to be paid in
accordance with this paragraph to but excluding the date such amount is paid,
to the Administrative Agent for the account of the Issuing Bank at (i) in the
case of the Borrower, a rate per annum equal to the interest rate applicable to
Revolving Loans pursuant to Section 2.6(a), and (ii) in the case of such
Lender, for the first such day, the Federal Funds Effective Rate, and for each
day thereafter, the Alternate Base Rate.

 

                SECTION
2.3.  Borrowing Procedure.  In order to request a Borrowing (other than
a Swingline Loan or a deemed Borrowing pursuant to Section 2.2(f), as to
which this Section 2.3 shall not apply), the Borrower shall hand deliver
or fax to the Administrative Agent (or give telephonic notice promptly
confirmed by written notice) a duly completed Borrowing Request (a) in the case
of a Eurodollar Borrowing, not later than 12:00 (noon), Local Time, three
Business Days before a proposed Borrowing, and (b) in the case of an ABR
Borrowing, not later than 12:00 (noon), New York City time, one Business Day
before a proposed Borrowing.  Each Borrowing
Request shall be irrevocable, shall be signed by or on behalf of the Borrower
and shall specify the following information: (i) whether the Borrowing then
being requested is to be a US$ Term Loan Borrowing, a Euro Term Loan Borrowing,
an Incremental Term Loan Borrowing or a Revolving Credit Borrowing, whether
such Borrowing is denominated in Dollars or an Alternative Currency, and
whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing (provided,
that until the Administrative Agent shall have notified the Borrower that the
primary syndication of the Commitment has been completed (which notice shall be
given as promptly as practicable and, in any event, within 7 days after the
Closing Date), the Borrower shall not be permitted to request a Eurodollar
Borrowing for any Loans denominated in US Dollars); (ii) the date of such
Borrowing (which shall be a Business Day); (iii) the number and location of the
account to which funds are to be disbursed; (iv) the amount of such Borrowing;
and (v) if such Borrowing is to be a Eurodollar Borrowing, the Interest Period
with respect thereto; provided, however, that, notwithstanding
any contrary specification in any Borrowing Request, each requested Borrowing
shall comply with the requirements set forth in Section 2.2.  If no election as to the Type of Borrowing
is specified in any such notice, then (a) if such Borrowing is denominated in
US Dollars, the requested Borrowing shall be an ABR Borrowing and (b) if such
Borrowing is denominated in an Alternative Currency, the requested Borrowing shall
be a Eurodollar Borrowing.  If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration.  The
Administrative Agent shall promptly advise the applicable Lenders of any notice
given pursuant to this Section 2.3 (and the contents thereof), and of each
Lender’s portion of the requested Borrowing.

 

                SECTION
2.4.  Evidence of Debt; Repayment of Loans.  (a) 
The Borrower hereby unconditionally promises to pay to each Lender,
through the Administrative Agent, (i) the principal amount of each Term Loan of
such Lender as provided in Section 2.11 and (ii) the then unpaid principal
amount of each Revolving

 

30

 

Loan
of such Lender on the Revolving Credit Maturity Date.  The Borrower hereby promises to pay to the Swingline Lender the
then unpaid principal amount of each Swingline Loan on the Revolving Credit
Maturity Date.

 

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

 

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

 

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

 

(e)           Any Lender may request that Loans
made by it hereunder be evidenced by a promissory note.  In such event, the Borrower shall execute
and deliver to such Lender a promissory note payable to such Lender and its
registered assigns and in a form and substance reasonably acceptable to the
Administrative Agent and the Borrower. Notwithstanding any other provision of
this Agreement, in the event any Lender shall request and receive such a
promissory note, the interests represented by such note shall at all times
(including after any assignment of all or part of such interests pursuant to
Section 9.4) be represented by one or more promissory notes payable to the
payee named therein or its registered assigns.

 

                SECTION
2.5.  Fees. 
(a)  The Borrower agrees to pay
to each Lender, through the Administrative Agent, on the last Business Day of
March, June, September and December in each year and on each date on
which any Commitment of such Lender shall expire or be terminated as provided
herein, a commitment fee (a “Commitment Fee”) equal to 0.50% per annum
on the daily unused amount of the Commitments of such Lender (other than the
Swingline Commitment) during the preceding quarter (or other period commencing
with the date hereof or ending with the Revolving Credit Maturity Date or the
date on which the Commitments of such Lender shall expire or be terminated); provided
that any commitment fee accrued with respect to any of the Commitments of a
Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the Borrower
so long as such Lender shall be a Defaulting Lender except to the extent that
such commitment fee shall otherwise have been due and payable by the Borrower
prior to such time; and provided, further that no commitment fee
shall accrue on any of the Commitments of a Defaulting Lender so long as such
Lender shall be a Defaulting Lender. 
All Commitment Fees shall be computed on the basis of the actual number
of days elapsed in a year of 360 days. 
The Commitment Fee due to each Lender shall commence to accrue on the
date hereof and shall cease to accrue on the date on which the Commitment of
such Lender shall expire or be terminated as provided herein.  For purposes of calculating Commitment Fees
only, no portion of the Revolving Credit Commitments shall be deemed utilized
as a result of outstanding Swingline Loans.

 

(b)           The Borrower agrees to pay to the
Administrative Agent, for its own account, the administration fees set forth in
the Fee Letter at the times and in the amounts specified therein (the “Administrative
Agent Fees”).

 

31

 

(c)           The Borrower agrees to pay (i) to
each Revolving Credit Lender, through the Administrative Agent, on each Fee
Payment Date a fee (an “L/C Participation Fee”) calculated on such
Lender’s Pro Rata Percentage of the daily aggregate L/C Exposure (excluding the
portion thereof attributable to unreimbursed L/C Disbursements) during the
preceding quarter (or shorter period commencing with the date hereof or ending
with the Revolving Credit Maturity Date or the date on which all Letters of
Credit have been canceled or have expired and the Revolving Credit Commitments
of all Lenders shall have been terminated) at a rate per annum equal to the
Applicable Percentage from time to time used to determine the interest rate on
Revolving Credit Borrowings comprised of Eurodollar Loans pursuant to
Section 2.6, and (ii) to the Issuing Bank, for its own account, a fronting
fee of 0.25% per annum on the undrawn and unexpired amount of each Letter of
Credit, payable quarterly in arrears on each Fee Payment Date after the
issuance date (the “Issuing Bank Fees”).  All L/C Participation Fees and Issuing Bank Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days.

 

(d)           All Fees shall be paid in Dollars on
the dates due, in immediately available funds, to the Administrative Agent for
distribution, if and as appropriate, among the Lenders, except that the Issuing
Bank Fees shall be paid directly to the Issuing Bank.  Once paid, none of the Fees shall be refundable under any
circumstances.

 

                SECTION
2.6.  Interest on Loans.  (a) 
Subject to the provisions of Section 2.7, the Loans comprising each
ABR Borrowing, including each Swingline Loan, shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be, when the Alternate Base Rate is determined by reference to
the Prime Rate and over a year of 360 days at all other times and calculated
from and including the date of such Borrowing to but excluding the date of
repayment thereof) at a rate per annum equal to the Alternate Base Rate plus
the Applicable Percentage in effect from time to time.

 

(b)           Subject to the provisions of
Section 2.7, the Loans comprising each Eurodollar Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Eurodollar Rate for the
Interest Period in effect for such Borrowing plus the Applicable Percentage in
effect from time to time.

 

(c)           Interest on each Loan shall be
payable to the applicable Lenders, through the Administrative Agent, on the
Interest Payment Dates applicable to such Loan except as otherwise provided in
this Agreement.  The applicable
Alternate Base Rate or Eurodollar Rate for each Interest Period or day within
an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.

 

                SECTION
2.7.  Default Interest.  Any amount (whether of principal, interest,
Fees or otherwise) not paid when due hereunder or under any other Loan Document
shall bear interest, to the extent permitted by law (after as well as before
judgment), payable on demand, (a) in the case of principal, at the rate
otherwise applicable thereto pursuant to Section 2.6 plus 2.00% per annum
and (b) in all other cases, at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be, when determined by reference to the Prime Rate and over a year of 360 days
at all other times) equal to the rate that would be applicable to an ABR Term
Loan plus 2.00% per annum.

 

                SECTION
2.8.  Alternate Rate of Interest.  In the event, and on each occasion, that on
the day two Business Days prior to the commencement of any Interest Period for
a Eurodollar Borrowing the Administrative Agent shall have determined that
dollar deposits in the principal amounts of the Loans comprising such Borrowing
are not generally available in the London interbank market, or that the rates
at which such dollar deposits are being offered will not adequately and fairly
reflect the cost to a majority in interest of the Lenders participating or to
participate in such Loan of making or maintaining its Eurodollar Loan

 

32

 

during
such Interest Period, or that reasonable means do not exist for ascertaining
the Eurodollar Rate, the Administrative Agent shall, as soon as practicable
thereafter, give written or fax notice of such determination to the Borrower
and the Lenders.  In the event of any
such determination, until the Administrative Agent shall have advised the
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist, any request by the Borrower for a Eurodollar Borrowing pursuant
to Section 2.3 or 2.10 shall be deemed to be a request for an ABR
Borrowing.  Each determination by the
Administrative Agent under this Section 2.8 shall be conclusive absent
manifest error.

 

                SECTION
2.9.  Termination and Reduction of Commitments.  (a) 
The US$ Term Loan Commitments and the Euro Term Loan Commitments shall
automatically terminate at 5:00 p.m., New York City time, on the Closing Date.
The Revolving Credit Commitments, the Swingline Commitment and the L/C
Commitment shall automatically terminate on the Revolving Credit Maturity
Date.  Notwithstanding the foregoing,
all the Commitments shall automatically terminate at 5:00 p.m., New York City
time, on June 30, 2004, if the initial Credit Event shall not have
occurred by such time.

 

(b)           Upon at least three Business Days’
prior irrevocable written or fax notice (or telephonic notice promptly
confirmed by written notice) to the Administrative Agent, the Borrower may at
any time in whole permanently terminate, or from time to time in part
permanently reduce, the Term Loan Commitments or the Revolving Credit
Commitments; provided, however, that (i) each partial reduction
of the Term Loan Commitments or the Revolving Credit Commitments shall be in an
integral multiple of $1,000,000 and in a minimum amount of $1,000,000 and (ii)
the Total Revolving Credit Commitment shall not be reduced to an amount that is
less than the Aggregate Revolving Credit Exposure at the time.

 

(c)           Each reduction in the Term Loan
Commitments or the Revolving Credit Commitments hereunder shall be made ratably
among the Lenders in accordance with their respective applicable
Commitments.  The Borrower shall pay to
the Administrative Agent for the account of the applicable Lenders, on the date
of termination of the Commitments of any Class, all accrued and unpaid
Commitment Fees relating to such Class to but excluding the date of such
termination.

 

                SECTION
2.10.  Conversion and Continuation of Borrowings.  The Borrower shall have the right at any
time upon prior irrevocable notice to the Administrative Agent (a) not later
than 12:00 (noon), New York City time, one Business Day prior to conversion, to
convert any Eurodollar Borrowing denominated in Dollars into an ABR Borrowing,
(b) not later than 12:00 (noon), New York City time, three Business Days prior
to conversion or continuation, to convert any ABR Borrowing into a Eurodollar
Borrowing denominated in Dollars or to continue any Eurodollar Borrowing as a
Eurodollar Borrowing for an additional Interest Period, and (c) not later than
12:00 (noon), Local Time, three Business Days prior to conversion, to convert
the Interest Period with respect to any Eurodollar Borrowing to another
permissible Interest Period, subject in each case to the following:

 

(i)  
until the Administrative Agent shall have notified the Borrower that the
primary syndication of the Commitments has been completed (which notice shall
be given as promptly as practicable and, in any event, within seven (7) days
after the Closing Date), no ABR Borrowing may be converted into a Eurodollar
Borrowing; provided, that after such seven-day (or shorter) period, each
ABR Borrowing converted to a Eurodollar Borrowing shall have an initial
Interest Period of thirty (30) days;

 

(ii)  
each conversion or continuation shall be made pro rata among the Lenders
in accordance with the respective principal amounts of the Loans comprising the
converted or continued Borrowing;

 

33

 

(iii)  
if less than all the outstanding principal amount of any Borrowing shall
be converted or continued, then each resulting Borrowing shall satisfy the
limitations specified in Sections 2.2(a) and 2.2(b) regarding the principal
amount and maximum number of Borrowings of the relevant Type;

 

(iv)  
each conversion shall be effected by each Lender and the Administrative
Agent by recording for the account of such Lender the new Loan of such Lender
resulting from such conversion and reducing the Loan (or portion thereof) of
such Lender being converted by an equivalent principal amount; accrued interest
on any Eurodollar Loan (or portion thereof) being converted shall be paid by
the Borrower at the time of conversion;

 

(v)  
if any Eurodollar Borrowing is converted at a time other than the end of
the Interest Period applicable thereto, the Borrower shall pay, upon demand,
any amounts due to the Lenders pursuant to Section 2.15; and

 

(vi)  
after the occurrence and during the continuance of a Default specified
in clause (b) or (c) of Article VII (without regard to any applicable
grace period in such clause (c)), no outstanding Loan denominated in Dollars
may be converted into, or continued as, a Eurodollar Loan.

 

Each
notice pursuant to this Section 2.10 shall be irrevocable and shall refer
to this Agreement and specify (i) the identity, currency denomination and
amount of the Borrowing that the Borrower requests be converted or continued,
(ii) whether such Borrowing is to be converted to or continued as a Eurodollar
Borrowing or an ABR Borrowing, (iii) if such notice requests a conversion, the
date of such conversion (which shall be a Business Day) and (iv) if such
Borrowing is to be converted to or continued as a Eurodollar Borrowing, the
Interest Period with respect thereto. 
If no Interest Period is specified in any such notice with respect to
any conversion to or continuation as a Eurodollar Borrowing, the Borrower shall
be deemed to have selected an Interest Period of one month’s duration.  The Administrative Agent shall advise the
Lenders of any notice given pursuant to this Section 2.10 and of each
Lender’s portion of any converted or continued Borrowing.  If the Borrower shall not have given notice
in accordance with this Section 2.10 to continue any Eurodollar Borrowing
into a subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.10 to convert such Borrowing), such
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be converted into an ABR
Borrowing.

 

                SECTION
2.11.  Repayment of Term Loan Borrowings.  (a) 
The Borrower shall pay to the applicable Lenders, through the Administrative
Agent, on the dates set forth below, or if any such date is not a Business Day,
on the next preceding Business Day (each such date being called a “Repayment
Date”), a principal amount of the US$ Term Loans and Euro Term Loans (as
adjusted from time to time pursuant to Sections 2.11(c), 2.12, 2.13(e) and
2.23(d)) equal to such Lender’s US$ Term Percentage or Euro Term Percentage, as
the case may be, multiplied by a percentage of the original aggregate principal
amount of the US$ Term Loans or the Euro Term Loans, as applicable, as set
forth below (together in each case with accrued and unpaid interest on the
principal amount to be paid to but excluding the date of such payment):

 

	
  Repayment Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 2, 2004

  	
   

  	
  0.25

  	
  %

  
	
  January 1, 2005

  	
   

  	
  0.25

  	
  %

  
	
  April 2, 2005

  	
   

  	
  0.25

  	
  %

  
	
  July 2, 2005

  	
   

  	
  0.25

  	
  %

  
	
  October 1, 2005

  	
   

  	
  0.25

  	
  %

  

 

34

 

	
  December 31, 2005

  	
   

  	
  0.25

  	
  %

  
	
  April 1, 2006

  	
   

  	
  0.25

  	
  %

  
	
  July 1, 2006

  	
   

  	
  0.25

  	
  %

  
	
  September 30, 2006

  	
   

  	
  0.25

  	
  %

  
	
  December 30, 2006

  	
   

  	
  0.25

  	
  %

  
	
  March 31, 2007

  	
   

  	
  0.25

  	
  %

  
	
  June 30, 2007

  	
   

  	
  0.25

  	
  %

  
	
  September 29, 2007

  	
   

  	
  0.25

  	
  %

  
	
  December 29, 2007

  	
   

  	
  0.25

  	
  %

  
	
  March 29, 2008

  	
   

  	
  0.25

  	
  %

  
	
  June 28, 2008

  	
   

  	
  0.25

  	
  %

  
	
  September 27, 2008

  	
   

  	
  0.25

  	
  %

  
	
  January 3, 2009

  	
   

  	
  0.25

  	
  %

  
	
  April 4, 2009

  	
   

  	
  0.25

  	
  %

  
	
  June 27, 2009

  	
   

  	
  0.25

  	
  %

  
	
  October 3, 2009

  	
   

  	
  0.25

  	
  %

  
	
  January 2, 2010

  	
   

  	
  0.25

  	
  %

  
	
  April 3, 2010

  	
   

  	
  0.25

  	
  %

  
	
  July 3, 2010

  	
   

  	
  0.25

  	
  %

  
	
  October 2, 2010

  	
   

  	
  0.25

  	
  %

  
	
  January 1, 2011

  	
   

  	
  0.25

  	
  %

  
	
  April 2, 2011

  	
   

  	
  0.25

  	
  %

  
	
  July 2, 2011

  	
   

  	
  0.25

  	
  %

  
	
  October 1, 2011

  	
   

  	
  0.25

  	
  %

  
	
  Term Loan Maturity Date

  	
   

  	
  92.75

  	
  %

  

 

(b)           The Borrower shall pay to the
Administrative Agent, for the account of the Lenders, on each Incremental Term
Loan Repayment Date, a principal amount of the Other Term Loans (as adjusted
from time to time pursuant to Sections 2.11(c), 2.12 and 2.13(e)) equal to the
amount set forth for such date in the applicable Incremental Term Loan
Assumption Agreement, together in each case with accrued and unpaid interest on
the principal amount to be paid to but excluding the date of such payment.

 

(c)           In the event and on each occasion
that any Term Loan Commitment (other than any Incremental Term Loan Commitment)
shall be reduced or shall expire or terminate other than as a result of the
making of a Term Loan, the installments payable on each Repayment Date shall be
reduced pro rata by an aggregate amount equal to the amount of such reduction,
expiration or termination.

 

(d)           To the extent not previously paid,
all Term Loans shall be due and payable on the Term Loan Maturity Date and all
Incremental Term Loans shall be due and payable on the applicable Incremental
Term Loan Maturity Date, together in each case with accrued and unpaid interest
on the principal amount to be paid to but excluding the date of payment.

 

(e)           All repayments pursuant to this
Section 2.11 shall be subject to Section 2.15, but shall otherwise be
without premium or penalty.

 

                SECTION
2.12.  Optional Prepayments.  (a) 
The Borrower shall have the right at any time and from time to time to
prepay any Borrowing, in whole or in part, upon at least three Business Days’
prior written or fax notice (or telephonic notice promptly confirmed by written
notice) in the case of Eurodollar Loans, or written or fax notice (or
telephonic notice promptly confirmed by written notice) at least one Business
Day prior to the date of prepayment in the case of ABR Loans, to the
Administrative Agent before 12:00 (noon), Local Time; provided, however,
that (i) each partial prepayment of Loans denominated in Dollars

 

35

 

shall
be in an amount that is an integral multiple of $100,000 and not less than
$500,000 and (ii) each partial prepayment of Loans denominated in Euros shall
be in an amount that is an integral multiple of €100,000 and not less than
€500,000.

 

(b)           Optional prepayments of Term Loans
shall be allocated ratably between the Term Loans and the Other Term Loans, if
any, and shall be applied first, in chronological order to the
installments of principal in respect of the Term Loans and Other Term Loans
scheduled to be paid within 12 months after such optional prepayment and second,
pro rata against the remaining scheduled installments of principal due in
respect of the Term Loans and Other Term Loans.

 

(c)           Each notice of prepayment shall
specify the prepayment date and the principal amount and currency denomination
of each Borrowing (or portion thereof) to be prepaid, shall be irrevocable and
shall commit the Borrower to prepay such Borrowing by the amount stated therein
on the date stated therein.  All
prepayments under this Section 2.12 shall be subject to Section 2.15
but otherwise without premium or penalty. 
All prepayments under this Section 2.12 shall be accompanied by
accrued and unpaid interest on the principal amount to be prepaid to but
excluding the date of payment; provided, however, that in the
case of a prepayment of an ABR Revolving Loan or a Swingline Loan that is not
made in connection with a termination of the Revolving Credit Commitments, the
accrued and unpaid interest on the principal amount prepaid shall be payable on
the next scheduled Interest Payment Date with respect to such ABR Revolving
Loan or Swingline Loan.

 

                SECTION
2.13.  Mandatory Prepayments.  (a) 
In the event of any termination of all the Revolving Credit Commitments,
the Borrower shall, on the date of such termination, repay or prepay all its
outstanding Revolving Credit Borrowings and all outstanding Swingline Loans and
replace all outstanding Letters of Credit. If as a result of any partial
reduction of the Revolving Credit Commitments the Aggregate Revolving Credit
Exposure would exceed the Total Revolving Credit Commitment after giving effect
thereto, then the Borrower shall, on the date of such reduction, repay or
prepay Revolving Credit Borrowings or Swingline Loans (or a combination thereof)
and/or replace outstanding Letters of Credit in an amount sufficient to
eliminate such excess.

 

(b)           Not later than the third Business Day
following the completion of any Asset Sale or Recovery Event, the Borrower
shall apply 100% of the Net Cash Proceeds received with respect thereto to
prepay outstanding Term Loans in accordance with Section 2.13(e).

 

(c)           No later than the earlier of (i) 90
days after the end of each fiscal year of the Borrower, commencing with the
fiscal year ending on December 31, 2005, and (ii) the date on which the
financial statements with respect to such period are delivered pursuant to
Section 5.4(a), the Borrower shall prepay outstanding Term Loans in
accordance with Section 2.13(e) in an aggregate principal amount equal to
50% of Excess Cash Flow for the fiscal year then ended;  provided, however, that
in the event the Leverage Ratio at the end of such fiscal year was equal to or
less than 3.75 to 1.00 and greater than 3.25 to 1.00, then such amount shall be
reduced to 25% of such Excess Cash Flow and in the event the Leverage Ratio at
the end of such fiscal year was equal to or less than 3.25 to 1.00, no such
prepayment shall be required.

 

(d)           In the event that any Loan Party or
any subsidiary of a Loan Party shall receive Net Cash Proceeds from the
issuance or other disposition of Indebtedness for money borrowed (or similar
transaction evidenced by bonds, debentures, notes or similar instruments) of
any Loan Party or any subsidiary of a Loan Party (other than Indebtedness for
money borrowed (or similar transaction evidenced by bonds, debentures, notes or
similar instruments) permitted pursuant to Section 6.1, except for
Indebtedness incurred under (i) the proviso to Section 6.1(g)(i) to the
extent the proceeds thereof are not applied to finance the cash consideration
payable in a Permitted Acquisition (including the refinancing of 

 

36

 

Indebtedness of the Acquired
Entity and the payment of related fees and expenses) or (ii) Section 6.1(j),
for which a mandatory prepayment shall be required), the Borrower shall,
substantially simultaneously with (and in any event not later than the third
Business Day next following) the receipt of such Net Cash Proceeds by such Loan
Party or such subsidiary, apply an amount equal to 100% of such Net Cash
Proceeds to prepay outstanding Term Loans in accordance with
Section 2.13(e).

 

(e)           Mandatory prepayments of outstanding
Term Loans under this Agreement shall be allocated ratably between the Term
Loans and the Other Term Loans, if any, and shall be applied first, in
chronological order to the installments of principal in respect of the Term
Loans and Other Term Loans scheduled to be paid within 12 months after such
mandatory prepayment and second, pro rata against the remaining
scheduled installments of principal due in respect of the Term Loans and Other
Term Loans under Section 2.11.

 

(f)            If, on any Determination Date, the
Aggregate Alternative Currency Exposure exceed 105% of the Alternative Currency
Sublimit, the Borrower shall, without notice or demand, within three Business
Days after such Determination Date, prepay Aternative Currency Loans in an
aggregate amount such that, after giving effect thereto, the Aggregate
Alternative Currency Exposure do not exceed the Alternative Currency Sublimit.

 

(g)           The Borrower shall deliver to the
Administrative Agent, at the time of each prepayment required under this
Section 2.13, (i) a certificate signed by a Financial Officer of the
Borrower setting forth in reasonable detail the calculation of the amount of
such prepayment and (ii) to the extent practicable, at least three days prior
written notice of such prepayment.  Each
notice of prepayment shall specify the prepayment date, the Type of each Loan
being prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid.  All prepayments of Borrowings
under this Section 2.13 shall be subject to Section 2.15, but shall
otherwise be without premium or penalty.

 

                SECTION
2.14.  Reserve Requirements; Change in Circumstances.  (a) 
Notwithstanding any other provision of this Agreement, if any Change in
Law shall 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 or the Issuing Bank (except any such reserve requirement
which is reflected in the Eurodollar Rate) or shall impose on such Lender or
the Issuing Bank 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 or the Issuing Bank of making or maintaining
any Eurodollar Loan or increase the cost to any Lender of issuing or
maintaining any Letter of Credit or purchasing or maintaining a participation
therein or to reduce the amount of any sum received or receivable by such
Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), in each case, by an amount deemed by such Lender or the Issuing
Bank to be material, then the Borrower will pay to such Lender or the Issuing
Bank, as the case may be, upon demand such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.

 

(b)           If any Lender or the Issuing Bank
shall have determined that any Change in Law regarding capital adequacy has or
would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s
holding company, if any, as a consequence of this Agreement or the Loans made
or participations in Letters of Credit purchased by such Lender pursuant hereto
or the Letters of Credit issued by the Issuing Bank pursuant hereto to a level
below that which such Lender or the Issuing Bank or such Lender’s or the
Issuing Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or the Issuing Bank’s policies and the
policies of such Lender’s or the Issuing Bank’s holding company with respect to
capital adequacy) by an amount deemed by such Lender or the Issuing Bank to

 

37

 

be material, then from time
to time the Borrower shall pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any
such reduction suffered.

 

(c)           A certificate of a Lender or the
Issuing Bank setting forth the amount or amounts necessary to compensate such
Lender or the Issuing Bank or its holding company, as applicable, as specified
in paragraph (a) or (b) above shall be delivered to the Borrower and shall be
conclusive absent manifest error.  The
Borrower shall pay such Lender or the Issuing Bank the amount shown as due on
any such certificate delivered by it within 10 days after its receipt of the
same.

 

(d)           Failure or delay on the part of any
Lender or the Issuing Bank to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to
demand such compensation; provided, that the Borrower shall not be under
any obligation to compensate any Lender or the Issuing Bank under paragraph (a)
or (b) above with respect to increased costs or reductions with respect to any
period prior to the date that is 180 days prior to such request if such Lender
or the Issuing Bank knew or could reasonably have been expected to know of the
circumstances giving rise to such increased costs or reductions and of the fact
that such circumstances would result in a claim for increased compensation by
reason of such increased costs or reductions; provided,  further, that the foregoing
limitation shall not apply to any increased costs or reductions arising out of
the retroactive application of any Change in Law within such 180-day
period.  The protection of this
Section shall be available to each Lender and the Issuing Bank regardless
of any possible contention of the invalidity or inapplicability of the Change
in Law that shall have occurred or been imposed.

 

                SECTION
2.15.  Indemnity.  The Borrower shall indemnify each Lender against any loss or
expense that such Lender may sustain or incur as a consequence of (a) any
event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made
by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice
of such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause (a) being called a “Breakage Event”) or (b)
any default in the making of any payment or prepayment required to be made
hereunder.  In the case of any Breakage
Event, such loss shall include an amount equal to the excess, as reasonably
determined by such Lender, of (i) its cost of obtaining funds for the
Eurodollar Loan that is the subject of such Breakage Event for the period from
the date of such Breakage Event to the last day of the Interest Period in
effect (or that would have been in effect) for such Loan over (ii) the amount
of interest likely to be realized by such Lender in redeploying the funds
released or not utilized by reason of such Breakage Event for such period, but
such loss shall not, in any event, include any lost profit or loss of
applicable margin.  A certificate of any
Lender setting forth any amount or amounts which such Lender is entitled to
receive pursuant to this Section 2.15 shall be delivered to the Borrower
and shall be conclusive absent manifest error.

 

                SECTION
2.16.  Pro Rata Treatment.  Each Borrowing, each payment or prepayment
of principal of any Borrowing, each payment of interest on the Loans, each
payment of the Commitment Fees or the L/C Participation Fees, each reduction of
the Term Loan Commitments or the Revolving Credit Commitments and each conversion
of any Borrowing to or continuation of any Borrowing as a Borrowing of any Type
shall be allocated pro rata among the Lenders in accordance with their
respective applicable Commitments (or, if such Commitments shall have expired
or been terminated, in accordance with the respective principal amounts of
their outstanding Loans or participations in L/C Disbursements, as

 

38

 

applicable).  Each Lender agrees that in computing such
Lender’s portion of any Borrowing to be made hereunder, the Administrative
Agent may, in its discretion, round each Lender’s percentage of such Borrowing
to the next higher or lower whole dollar amount.

 

                SECTION
2.17.  Sharing of Setoffs.  Each Lender agrees that if it shall, through
the exercise of a right of banker’s lien, setoff or counterclaim against the
Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary) in
respect of any Loan or L/C Disbursement as a result of which the unpaid portion
of its Loans and participations in L/C Disbursements shall be proportionately
less than the unpaid portion of the Loans and participations in L/C
Disbursements of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the Loans and L/C
Exposure of such other Lender, so that the aggregate unpaid amount of the Loans
and L/C Exposure and participations in Loans and L/C Exposure held by each
Lender shall be in the same proportion to the aggregate unpaid amount of all
Loans and L/C Exposure then outstanding as the amount of its Loans and L/C
Exposure prior to such exercise of banker’s lien, setoff or counterclaim or
other event was to the amount of all Loans and L/C Exposure outstanding prior
to such exercise of banker’s lien, setoff or counterclaim or other event; provided,
however, that if any such purchase or purchases or adjustments shall be
made pursuant to this Section 2.17 and the payment giving rise thereto
shall thereafter be recovered, such purchase or purchases or adjustments shall
be rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. 
The Borrower and Holdings expressly consent to the foregoing
arrangements and agree that any Lender holding a participation in a Loan or L/C
Disbursement deemed to have been so purchased may exercise any and all rights
of banker’s lien, setoff or counterclaim with respect to any and all moneys
owing by the Borrower and Holdings to such Lender by reason thereof as fully as
if such Lender had made a Loan directly to the Borrower in the amount of such
participation.

 

                SECTION
2.18.  Payments.  (a)  The Borrower shall
make each payment (including principal of or interest on any Borrowing or any
L/C Disbursement or any Fees or other amounts) hereunder and under any other
Loan Document not later than 12:00 (noon), Local Time, on the date when due in
Dollars or the relevant Alternative Currency, as applicable, and in immediately
available funds, without setoff, defense or counterclaim.  Each such payment (other than (i) Issuing
Bank Fees, which shall be paid directly to the Issuing Bank, and (ii) principal
of and interest on Swingline Loans, which shall be paid directly to the
Swingline Lender except as otherwise provided in Section 2.20(e)) shall be
made to the Administrative Agent at the Funding Office, or at such other
location as the Administrative Agent shall notify the Borrower from time to
time in accordance with Section 9.1. 
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.

 

(b)           Except as otherwise expressly
provided herein, whenever any payment (including principal of or interest on
any Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a Business
Day, such payment may be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of interest
or Fees, if applicable.

 

                SECTION
2.19.  Taxes.  (a)  Any and all payments
by or on account of any obligation of the Borrower or any Loan Party hereunder
or under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided, that if
the Borrower or any 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

 

39

 

applicable
to additional sums payable under this Section) the Administrative Agent or such
Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower or such Loan Party
shall make such deductions and (iii) the Borrower or such Loan Party shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.

 

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

 

(c)           The Borrower shall indemnify the
Administrative Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent or such Lender, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrower or any Loan
Party hereunder or under any other Loan Document (including 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 (other than penalties or interest
attributable to (i) a failure or delay by the Administrative Agent or such
Lender, as applicable, in making such written demand to the Borrower or (ii)
the gross negligence or willful misconduct of the Administrative Agent or such
Lender, as applicable), 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 Borrower by a Lender, or
by the Administrative Agent on its behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

(d)           As soon as practicable after any
payment of Indemnified Taxes or Other Taxes by the Borrower or any other Loan
Party to a Governmental Authority, the Borrower 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 the 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.

 

                SECTION
2.20.  Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate.  (a)  In the event (i) any
Lender or the Issuing Bank delivers a certificate requesting compensation
pursuant to Section 2.14, (ii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank pursuant to
Section 2.19, (iii) any Lender becomes a Defaulting Lender or (iv) any
Lender refuses to consent to any amendment, waiver or other modification of any
Loan Document requested by the Borrower that requires the consent of a greater
percentage of the Lenders than the Required Lenders and such amendment, waiver
or other modification is consented to by the Required Lenders, the Borrower
may, at its sole expense and effort (including with respect to the processing
and recordation fee referred to in Section 9.4(b)), upon notice to such
Lender or the Issuing Bank and the Administrative Agent, require such Lender or
the Issuing Bank to transfer and assign, without recourse, representation or
warranty, except as to warranty as to its ownership of the assigned obligations
(in accordance with and subject to the restrictions contained in
Section 9.4), all of its interests, rights and obligations under this
Agreement to an assignee that shall assume such assigned obligations and, with
respect to clause (iv) above, shall consent to such requested amendment, waiver
or other modification of any Loan Document (which assignee may be another
Lender,

 

40

 

if
a Lender accepts such assignment); provided that (x) such assignment shall not
conflict with any law, rule or regulation or order of any court or other
Governmental Authority having jurisdiction, (y) the Borrower shall have
received the prior written consent of the Administrative Agent (and, if a
Revolving Credit Commitment is being assigned, of the Issuing Bank and the
Swingline Lender), which consent shall not unreasonably be withheld, and (z)
the Borrower or such assignee shall have paid to the affected Lender or the
Issuing Bank in immediately available funds an amount equal to the sum of the
principal of and interest accrued to the date of such payment on the outstanding
Loans or L/C Disbursements of such Lender or the Issuing Bank plus all Fees and
other amounts accrued for the account of such Lender or the Issuing Bank
hereunder (including any amounts under Section 2.14 and
Section 2.15); provided, further, that, if prior to any such
transfer and assignment the circumstances or event that resulted in such
Lender’s or the Issuing Bank’s claim for compensation under Section 2.14
or the amounts paid pursuant to Section 2.19, as the case may be, cease to
cause such Lender or the Issuing Bank to suffer increased costs or reductions
in amounts received or receivable or reduction in return on capital or cease to
result in amounts being payable under Section 2.19, as the case may be
(including as a result of any action taken by such Lender or the Issuing Bank
pursuant to paragraph (b) below), or if such Lender or the Issuing Bank shall
waive its right to claim further compensation under Section 2.14 in
respect of such circumstances or event or shall waive its right to further payments
under Section 2.19 in respect of such circumstances or event or shall
consent to the proposed amendment, waiver, consent or other modification, as
the case may be, then such Lender or the Issuing Bank shall not thereafter be
required to make any such transfer and assignment hereunder.

 

(b)           If (i) any Lender or the Issuing Bank
shall request compensation under Section 2.14 or (ii) the Borrower is
required to pay any additional amount to any Lender or the Issuing Bank or any
Governmental Authority on account of any Lender or the Issuing Bank, pursuant
to Section 2.19, then such Lender or the Issuing Bank shall use reasonable
efforts (which shall not require such Lender or the Issuing Bank to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any action
inconsistent with its internal policies or legal or regulatory restrictions or
suffer any disadvantage or burden deemed by it to be significant) (x) to file
any certificate or document reasonably requested in writing by the Borrower or
(y) to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or Affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14 or would
reduce amounts payable pursuant to Section 2.19, as the case may be, in
the future.  The Borrower hereby agrees
to pay all reasonable costs and expenses incurred by any Lender or the Issuing
Bank in connection with any such filing or assignment, delegation and transfer.

 

                SECTION 2.21.  Swingline
Loans.  (a)  Swingline Commitment.  Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, the Swingline
Lender agrees to make loans to the Borrower at any time and from time to time
on and after the Closing Date and until the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitments in
accordance with the terms hereof, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of all
Swingline Loans exceeding $5,000,000 in the aggregate or (ii) the Aggregate
Revolving Credit Exposure, after giving effect to any Swingline Loan, exceeding
the Total Revolving Credit Commitment. 
Each Swingline Loan shall be in a principal amount that is an integral
multiple of $100,000 and not less than $100,000.  The Swingline Commitment may be terminated or reduced from time
to time as provided herein.  Within the
foregoing limits, the Borrower may borrow, pay or prepay and reborrow Swingline
Loans hereunder, subject to the terms, conditions and limitations set forth
herein.

 

(b)           Swingline Loan Borrowing Procedure.
The Borrower shall notify the Swingline Lender by fax, or by telephone
(confirmed by fax), not later than 12:00 (noon), New York City time, on the day
of a proposed Swingline Loan.  Such
notice shall be delivered on a Business Day, shall be irrevocable and shall
refer to this Agreement and shall specify the requested date (which shall be a
Business Day) and

 

41

 

amount of such Swingline
Loan and the wire transfer instructions for the account of the Borrower to
which the proceeds of such Swingline Loan should be transferred. The Swingline
Lender shall promptly make each Swingline Loan by wire transfer to the account
specified by the Borrower in such request.

 

(c)           Prepayment.  The Borrower shall have the right at any
time and from time to time to prepay any Swingline Loan, in whole or in part,
upon giving written or fax notice (or telephonic notice promptly confirmed by
written notice) to the Swingline Lender and to the Administrative Agent before
12:00 (noon), New York City time on the date of prepayment at the Swingline
Lender’s address for notices specified in Section 9.1.

 

(d)           Interest.  Each Swingline Loan shall be an ABR Loan
and, subject to the provisions of Section 2.7, shall bear interest at the
rate provided for the ABR Revolving Loans as provided in Section 2.6(a).

 

(e)           Participations.  The Swingline Lender may by written notice
given to the Administrative Agent not later than 11:00 a.m., New York City
time, on any Business Day require the Revolving Credit Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans
outstanding.  Such notice shall specify
the aggregate amount of Swingline Loans in which the Revolving Credit Lenders
will participate.  The Administrative
Agent will, promptly upon receipt of such notice, give notice to each Revolving
Credit Lender, specifying in such notice such Lender’s Pro Rata Percentage of
such Swingline Loan or Loans.  In
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely
and unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such
Revolving Credit Lender’s Pro Rata Percentage of such Swingline Loan or
Loans.  Each Revolving Credit Lender
acknowledges and agrees that its obligation to acquire participations in Swingline
Loans pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.  Each Revolving Credit
Lender shall comply with its obligation under this paragraph by wire transfer
of immediately available funds, in the same manner as provided in
Section 2.2(c) with respect to Loans made by such Lender (and
Section 2.2(c) shall apply, mutatis
mutandis, to the payment obligations of the Lenders) and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Lenders.  The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and
not to the Swingline Lender.  Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower (or other party liable for obligations of the Borrower) of any
default in the payment thereof.

 

                SECTION
2.22.  Letters of Credit.  (a)  General.  The Borrower may request the issuance of a
Letter of Credit denominated in Dollars or in an Alternative Currency for its
own account or for the account of any Subsidiary, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time while the Revolving Credit Commitments remain in effect.  This Section shall not be construed to
impose an obligation upon the Issuing Bank to issue any Letter of Credit that
is inconsistent with the terms and conditions of this Agreement.

 

42

 

(b)           Notice of Issuance, Amendment,
Renewal, Extension; Certain Conditions. 
In order to request the issuance of a Letter of Credit (or to amend,
renew or extend an existing Letter of Credit), the Borrower shall hand deliver
or fax to the Issuing Bank 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, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) below), whether such Letter of Credit shall
be issued in Dollars or an Alternative Currency, 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 such Letter of Credit. The Issuing
Bank shall promptly (i) notify the Administrative Agent in writing of the
amount and expiry date of each Letter of Credit issued by it and (ii) provide a
copy of each such Letter of Credit (and any amendments, renewals or extensions
thereof) to the Administrative Agent.  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
Borrower shall be deemed to represent and warrant that, after giving effect to
such issuance, amendment, renewal or extension (i) the L/C Exposure shall not
exceed $50,000,000, (ii) the Aggregate Alternative Currency Exposure shall not
exceed $50,000,000 and (iii) the Aggregate Revolving Credit Exposure shall not
exceed the Total Revolving Credit Commitment. 
The Borrower shall be deemed to have complied with the notification and
other information delivery requirements set forth in this Section 2.22(b)
in respect of the Letter of Credit in the form attached hereto as
Schedule 2.22(b), which Letter of Credit shall be issued on the Closing
Date.

 

(c)           Expiration Date.  Each Letter of Credit shall expire at the
close of business on the earlier of the date one year after the date of the
issuance of such Letter of Credit and the date that is five Business Days prior
to the Revolving Credit Maturity Date, unless such Letter of Credit expires by
its terms on an earlier date; provided, that a Letter of Credit may,
upon the request of the Borrower, include a provision whereby such Letter of
Credit shall be renewed automatically for additional consecutive periods of 12
months or less (but not beyond the date that is five Business Days prior to the
Revolving Credit Maturity Date) unless the Issuing Bank notifies the
beneficiary thereof at least 30 days prior to the then-applicable expiration
date that such Letter of Credit will not be renewed.

 

(d)           Participations.  By the issuance of a Letter of Credit and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Revolving Credit Lender, and each such
Lender hereby acquires from the Issuing Bank, a participation in such Letter of
Credit equal to such Lender’s Pro Rata Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the issuance
of such Letter of Credit.  In
consideration and in furtherance of the foregoing, each Revolving Credit Lender
hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Lender’s Pro Rata Percentage
of each L/C Disbursement made by the Issuing Bank and not reimbursed by the
Borrower (or, if applicable, another party pursuant to its obligations under
any other Loan Document) forthwith on the date due as provided in
Section 2.2(f).  Each Revolving
Credit 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 the occurrence and continuance of a Default or an Event
of Default, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.

 

(e)           Reimbursement.  If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrower shall pay to the
Administrative Agent (or directly to the Issuing Bank, with concurrent notice
to the Administrative Agent) an amount (in the currency in which the Letter of
Credit was denominated) equal to such L/C Disbursement not later than two hours
after the Borrower shall have received notice from the Issuing Bank that
payment of such draft will be made, or, if the Borrower shall

 

43

 

have received such notice
later than 10:00 a.m., Local Time, on any Business Day, not later than 10:00
a.m., Local Time, on the immediately following Business Day.

 

(f)            Obligations Absolute.  The Borrower’s obligations to reimburse L/C
Disbursements as provided in paragraph (e) above 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 any Loan Document, or any term or
provision therein;

 

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

 

(iii)   the existence of any
claim, setoff, defense or other right that the Borrower, any other party
guaranteeing, or otherwise obligated with, the Borrower, any Subsidiary or
other Affiliate thereof or any other person may at any time have against the
beneficiary under any Letter of Credit, the Issuing Bank, the Administrative
Agent or any Lender or any other person, whether in connection with this
Agreement, any other Loan Document or any other related or unrelated agreement
or transaction;

 

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

 

(v)   payment by the Issuing
Bank 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; and

 

(vi)   any other act or omission
to act or delay of any kind of the Issuing Bank, the Lenders, the
Administrative Agent or any other person or 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
the Borrower’s obligations hereunder.

 

Without
limiting the generality of the foregoing, it is expressly understood and agreed
that the absolute and unconditional obligation of the Borrower hereunder to
reimburse L/C Disbursements will not be excused by the gross negligence or
willful misconduct of the Issuing Bank. 
However, the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower that
are caused by the Issuing Bank’s gross negligence or willful misconduct in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof; it is understood that the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the Issuing Bank’s exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit

 

44

 

with
the terms thereof shall, in each case, be deemed not to constitute willful
misconduct or gross negligence of the Issuing Bank.

 

(g)           Disbursement Procedures.  The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit.  The
Issuing Bank shall as promptly as possible give telephonic notification,
confirmed by fax, to the Administrative Agent and the Borrower of such demand
for payment and whether the Issuing Bank has made or will make an L/C
Disbursement thereunder; provided, that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Credit Lenders with respect to any
such L/C Disbursement.  The
Administrative Agent shall promptly give each Revolving Credit Lender notice
thereof.

 

(h)           Interim Interest.  If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of the Issuing Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of
the date of payment by the Borrower or the date on which interest shall
commence to accrue thereon as provided in Section 2.2(f), at the rate per
annum that would apply to such amount if such amount were an ABR Revolving Loan.

 

(i)            Resignation or Removal of the
Issuing Bank.  The Issuing Bank may
resign at any time by giving 30 days’ prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Issuing Bank, the Administrative Agent
and the Lenders.  Subject to the next
succeeding paragraph, upon the acceptance of any appointment as the Issuing
Bank hereunder by a Lender that shall agree to serve as successor Issuing Bank,
such successor shall succeed to and become vested with all the interests,
rights and obligations of the retiring Issuing Bank and the retiring Issuing
Bank shall be discharged from its obligations to issue additional Letters of
Credit hereunder.  At the time such
removal or resignation shall become effective, the Borrower shall pay all
accrued and unpaid fees pursuant to Section 2.5(c)(ii).  The acceptance of any appointment as the
Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement
entered into by such successor, in a form satisfactory to the Borrower and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Issuing Bank under this Agreement and the other Loan Documents and
(ii) references herein and in the other Loan Documents to the term “Issuing
Bank” shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require.  After the resignation or
removal of the Issuing Bank hereunder, the retiring Issuing Bank shall remain a
party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement and the other Loan Documents with respect to
Letters of Credit issued by it prior to such resignation or removal, but shall
not be required to issue additional Letters of Credit.

 

(j)            Cash Collateralization.  If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Administrative Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date; provided, however, that the obligation
to deposit such cash 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 with respect to the Borrower
described in clause (g) or (h) of Article VII.  Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the Obligations.  The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of

 

45

 

withdrawal, over such
account.  Other than any interest earned
on the investment of such deposits in Permitted Investments, which investments
shall be made at the option and sole discretion of the Administrative Agent,
such deposits shall not bear interest. 
Interest or profits, if any, on such investments shall accumulate in
such account.  Moneys in such account
shall (i) automatically be applied by the Administrative Agent to reimburse the
Issuing Bank for L/C Disbursements for which it has not been reimbursed, (ii)
be held for the satisfaction of the reimbursement obligations of the Borrower
for the L/C Exposure at such time and (iii) if the maturity of the Loans has
been accelerated (but subject to the consent of Revolving Credit Lenders
holding participations in outstanding Letters of Credit representing greater
than 50% of the aggregate undrawn amount of all outstanding Letters of Credit),
be applied to satisfy the Obligations. 
If the Borrower 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 Borrower within
three Business Days after all Events of Default have been cured or waived.

 

(k)           Additional Issuing Banks.  The Borrower may, at any time and from time
to time with the consent of the Administrative Agent (which consent shall not
be unreasonably withheld) and such Lender, designate one or more additional
Lenders to act as an Issuing Bank under the terms of the Agreement.  Any Lender designated as an Issuing Bank
pursuant to this paragraph (k) shall be deemed to be an “Issuing Bank” (in
addition to being a Lender) in respect of Letters of Credit issued or to be
issued by such Lender, and, with respect to such Letters of Credit, such term
shall thereafter apply to the other Issuing Bank and such Lender.

 

                SECTION
2.23.  Increase in Term Loan Commitments.  (a) 
The Borrower may, by written notice to the Administrative Agent from
time to time, request Incremental Term Loan Commitments in an amount not to
exceed the Incremental Term Loan Amount from one or more Incremental Term
Lenders (which may include any existing Lender) willing to provide such
Incremental Term Loans in their own discretion; provided, that (i)
before submitting any such request to a Person that is not a Lender, the
Borrower shall first give each existing Lender the opportunity to provide such
Incremental Term Loan Commitments (in which case, existing Lenders shall have
no more than two (2) Business Days from the date of such notice to indicate
whether they are willing to provide such Incremental Term Loans) and (ii) each
Incremental Term Lender, if not already a Lender hereunder, shall be subject to
the approval of the Administrative Agent (which approval shall not be
unreasonably withheld).  Such notice
shall set forth (i) the amount of the Incremental Term Loan Commitments being
requested (which shall be in minimum increments of $1,000,000 and a minimum
amount of $5,000,000 or equal to the remaining Incremental Term Loan Amount),
(ii) the date on which such Incremental Term Loan Commitments are requested to
become effective (which shall not be less than 10 Business Days after the date
of such notice) and (iii) whether such Incremental Term Loan Commitments are to
be Term Loan Commitments or commitments to make term loans with terms different
from the Term Loans (“Other Term Loans”).

 

(b)           The Borrower and each Incremental
Term Lender shall execute and deliver to the Administrative Agent an
Incremental Term Loan Assumption Agreement and such other documentation as the
Administrative Agent shall reasonably specify to evidence the Incremental Term
Loan Commitment of such Incremental Term Lender.  Each Incremental Term Loan Assumption Agreement shall specify the
terms of the Incremental Term Loans to be made thereunder; provided,
that, without the prior written consent of the Required Lenders, (i) the final
maturity date of any Other Term Loans shall be no earlier than the Term Loan
Maturity Date and (ii) the average life to maturity of any Other Term Loans
shall be no shorter than the average life to maturity of the Term Loans and provided, further, that, if the interest rate margin in respect of any Other
Term Loan would exceed the Applicable Percentage for the Term Loans by more
than 1⁄2 of 1% (it being understood that any such increase may take the form of
original issue discount (“OID”), with OID being equated to the interest
rates in a manner determined by the Administrative Agent based on an assumed
four-year life to maturity), the Applicable Percentage for

 

46

`the Term Loans shall be
increased so that the interest rate margin in respect of such Other Term Loan
(giving effect to any OID issued in connection with such Other Term Loan) is no
more than 1⁄2 of 1% higher than the Applicable Percentage for the Term Loans.  The Administrative Agent shall promptly
notify each Lender as to the effectiveness of each Incremental Term Loan
Assumption Agreement.  Each of the
parties hereto hereby agrees that, upon the effectiveness of any Incremental
Term Loan Assumption Agreement, this Agreement shall be amended to the extent
(but only to the extent) necessary to reflect the existence and terms of the
Incremental Term Loan Commitment evidenced thereby as provided for in
Section 9.8(b).  Any such deemed
amendment may be memorialized in writing by the Administrative Agent with the
Borrower’s consent (not to be unreasonably withheld) and furnished to the other
parties hereto.

 

(c)                                  Notwithstanding the foregoing, no Incremental
Term Loan Commitment shall become effective under this Section 2.23 unless
(i) on the date of such effectiveness, the conditions set forth in paragraphs
(b) and (c) of Section 4.1 shall be satisfied and the Administrative Agent
shall have received a certificate to that effect dated such date and executed
by a Financial Officer of the Borrower, (ii) the Administrative Agent shall
have received (with sufficient copies for each of the Incremental Term Lenders)
legal opinions, board resolutions and other closing certificates and
documentation consistent with those delivered on the Closing Date under
Section 4.2 and (iii) the Borrower would be in Pro Forma Compliance after
giving effect to such Incremental Term Loan Commitment and the Loans to be made
thereunder and the application of the proceeds therefrom as if made and applied
on such date.

 

(d)                                 Each of the parties hereto hereby agrees that
the Administrative Agent may take any and all action as may be reasonably
necessary to ensure that all Incremental Term Loans (other than Other Term
Loans), when originally made, are included in each Borrowing of outstanding
Term Loans on a pro rata basis, and the Borrower agrees that Section 2.15
shall apply to any conversion of Eurodollar Term Loans to ABR Term Loans
reasonably required by the Administrative Agent to effect the foregoing.  In addition, to the extent any Incremental
Term Loans are not Other Term Loans, the scheduled amortization payments under
Sections 2.11(a) required to be made after the making of such Incremental Term
Loans shall be ratably increased by the aggregate principal amount of such
Incremental Term Loans.

 

ARTICLE III

 

Representations and Warranties

 

Each
of Holdings and the Borrower represents and warrants to the Administrative
Agent, the Issuing Bank and each of the Lenders that (both prior to and after
giving effect to the Acquisition):

 

               SECTION 3.1.  Organization;
Powers.  Holdings, the
Borrower and each of the Subsidiaries (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(b) has all requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required, except where the failure so to qualify
could not reasonably be expected to result in a Material Adverse Effect, and
(d) has the power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated hereby or thereby to which it is or will be a party and, in the
case of the Borrower, to borrow hereunder.

 

                SECTION 3.2.  Authorization.  The Transactions (a) have been duly
authorized by all requisite corporate and, if required, stockholder action and
(b) will not (i) violate (A) any provision of law, statute, rule or regulation,
or of the certificate or articles of incorporation or other constitutive
documents or by-laws of Holdings, the Borrower or any Subsidiary, (B) any order
of any Governmental Authority or (C) any

 

47

 

provision
of any indenture, material agreement or other material instrument to which
Holdings, the Borrower or any Subsidiary is a party or by which any of them or
any of their property is or may be bound, (ii) except as set forth on
Schedule 3.2, be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under, or give rise
to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, material agreement or
other material instrument or (iii) result in the creation or imposition of any
Lien upon or with respect to any property or assets now owned or hereafter
acquired by Holdings, the Borrower or any Subsidiary (other than any Lien
created hereunder or under the Security Documents).

 

               SECTION 3.3.  Enforceability.  This Agreement has been duly executed and
delivered by Holdings and the Borrower and constitutes, and each other Loan
Document when executed and delivered by each Loan Party party thereto will
constitute, a legal, valid and binding obligation of such Loan Party
enforceable against such Loan Party in accordance with its terms.

 

                SECTION
3.4.  Governmental Approvals. 
Except as set forth on Schedule 3.4, no action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except
for (a) the filing of Uniform Commercial Code financing statements and filings
with the United States Patent and Trademark Office and the United States
Copyright Office, (b) recordation of any Mortgages, (c) such as have been made
or obtained and are in full force and effect or which are not material to the
consummation of the Transactions and (d) those approvals, consents, exemptions,
authorizations or other actions, notices or filings, the failure of which to
obtain or make could not reasonably be expected to have a Material Adverse
Effect.

 

                SECTION
3.5.  Financial Statements. 
(a)  The Borrower has heretofore
furnished to the Lenders (i) the consolidated balance sheets and related
statements of income, stockholders’ equity and cash flows of the Company and
its consolidated subsidiaries as of and for the fiscal year ended
January 3, 2004, audited by and accompanied by the unqualified opinion of
Ernst & Young LLP, independent public accountants and (ii) the unaudited
consolidated balance sheet and related statements of income, stockholders’
equity and cash flows of the Company and its consolidated subsidiaries as of
and for each fiscal quarter subsequent to January 3, 2004 ended 45 days
before the Closing Date.  Such financial
statements present fairly, in all material respects, the financial condition
and results of operations and cash flows of the Company and its consolidated
subsidiaries as of such dates and for such periods.  Except as set forth on Schedule 3.5(a), such balance sheets
and the notes thereto disclose all material liabilities, direct or contingent,
of the Borrower and its consolidated subsidiaries as of the dates thereof.  Such financial statements were prepared in
accordance with GAAP applied on a consistent basis, except that the unaudited
financial statements are subject to normal year-end adjustments and do not
contain notes thereto.

 

(b)                                 The Borrower has heretofore delivered to the
Lenders the unaudited pro forma consolidated balance sheet of the Company and
its consolidated subsidiaries at May 13, 2004, prepared giving effect to the
Transactions as if they had occurred on such date.  Such pro forma financial statements have been prepared in good
faith by the Borrower, based on the assumptions used to prepare the pro forma
financial information contained in the Confidential Information Memorandum
(which assumptions are believed by the Borrower on the date hereof and on the
Closing Date to be reasonable), are based on the best information available to
the Borrower as of the date of delivery thereof, accurately reflect, in all
material respects, all adjustments required to be made to give effect to the
Transactions and present fairly, in all material respects, on a pro forma basis
the estimated consolidated financial position of the Company and its
consolidated subsidiaries as of such date and for such periods, assuming that
the Transactions had actually occurred at such date or at the beginning of such
period, as the case may be.

 

               SECTION 3.6.  No
Material Adverse Change. 
No event, change or condition has occurred that has had, or could
reasonably be expected to have, a material adverse effect on the business,
operations, assets, liabilities,

 

48

 

financial
condition or results of operations of Holdings, the Borrower and the
Subsidiaries, taken as a whole, since January 3, 2004.

 

                SECTION 3.7.  Title
to Properties; Possession Under Leases.  (a) 
Each of Holdings, the Borrower and each of the Subsidiaries has good and
marketable title to, or valid leasehold interests in, all its material
properties and material assets, except for minor defects in title that do not
materially interfere with its ability to conduct its business or to utilize
such assets for their intended purposes and Liens permitted by Section 6.2
and except where the failure to have such title could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.  All such material properties
and assets are free and clear of Liens, other than Liens expressly permitted by
Section 6.2.

 

(b)                                 Each of Holdings, the Borrower and each of
the Subsidiaries has complied with all material obligations due and payable or
required to be performed under all material leases to which it is a party and
all such material leases are in full force and effect.  Each of Holdings, the Borrower and each of
the Subsidiaries enjoys peaceful and undisturbed possession under all such
leases, except where the failure to so enjoy could not reasonably be expected
to have a Material Adverse Effect.

 

                SECTION 3.8.  Subsidiaries.  Schedule 3.8 sets forth as of the
Closing Date a list of all Subsidiaries and the percentage ownership interest
of Holdings or the Borrower therein. 
The shares of Equity Interests so indicated on Schedule 3.8 are
owned by Holdings or the Borrower, directly or indirectly, free and clear of
all Liens (other than Liens created under the Security Documents).

 

                SECTION 3.9.  Litigation;
Compliance with Laws. 
(a)  Except as set forth on
Schedule 3.9, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of Holdings or the Borrower, threatened against or affecting
Holdings, the Borrower, any Subsidiary or any business, property or rights of
any such person (i) that involve any Loan Document or the Transactions or (ii)
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.

 

(b)                                 Since the date of this Agreement, there has
been no change in the status of the matters disclosed on Schedule 3.9
that, individually or in the aggregate, has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.

 

(c)                                  None of Holdings, the Borrower or any of the
Subsidiaries or any of their respective material properties or material assets
is in violation of, nor will the continued operation of their material
properties and material assets as currently conducted violate, any law, rule or
regulation (including any zoning, building, Environmental Law, ordinance, code
or approval or any building permits), or is in default with respect to any
judgment, writ, injunction, decree or order of any Governmental Authority,
where such violation or default could reasonably be expected to result in a
Material Adverse Effect.

 

                SECTION 3.10.  Agreements.  (a) 
None of Holdings, the Borrower or any of the Subsidiaries is a party to
any agreement or instrument or subject to any corporate restriction that has
resulted or could reasonably be expected to result in a Material Adverse
Effect.

 

(b)                                 None of Holdings, the Borrower or any of the
Subsidiaries is in default in any manner under any provision of any indenture
or other agreement or instrument evidencing Indebtedness, or any other
agreement or instrument to which it is a party or by which it or any of its
properties or assets are or may be bound, where such default could reasonably
be expected to result in a Material Adverse Effect.

 

49

 

                SECTION 3.11.  Federal
Reserve Regulations. 
(a)  None of Holdings, the
Borrower or any of the Subsidiaries 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.

 

(b)                                 No part of the proceeds of any Loan or any
Letter of Credit will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the Regulations
of the Board, including Regulation T, U or X.

 

                SECTION 3.12.  Investment
Company Act; Public Utility Holding Company Act.  None of Holdings, the Borrower or any
Subsidiary is (a) an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a “holding company”
as defined in, or subject to regulation under, the Public Utility Holding Company
Act of 1935.

 

                SECTION 3.13.  Use of
Proceeds.  The Borrower
will use the proceeds of the Loans (other than any Incremental Term Loans) and
will request the issuance of Letters of Credit only for the purposes specified
in Section 5.8.  The Borrower will
use the proceeds of any Incremental Term Loans solely as set forth in the
applicable Incremental Term Loan Assumption Agreement.

 

                SECTION 3.14.  Tax
Returns.  Each of the
Holdings, the Borrower and each of the Subsidiaries has filed or caused to be
filed all Federal and all material state, local and foreign tax returns or
materials required to have been filed by it and has paid or caused to be paid
all material taxes due and payable by it and all assessments received by it,
except taxes that are being contested in good faith by appropriate proceedings
and for which Holdings, the Borrower or such Subsidiary, as applicable, shall
have set aside on its books adequate reserves and except for taxes the
nonpayment of which could not reasonably be expected to have a Material Adverse
Effect.

 

                SECTION 3.15.  No
Material Misstatements. 
None of (a) the Confidential Information Memorandum or (b) any other
information, report, financial statement, exhibit or schedule furnished by
or on behalf of Holdings or the Borrower to the Administrative Agent or any
Lender in connection with the negotiation of any Loan Document or included
therein or delivered pursuant thereto contained, which, in the case of clauses
(a) and (b), when taken as a whole and together with the representations and
warranties contained in this Agreement, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading; provided that to
the extent any such information, report, financial statement, exhibit or
schedule was based upon or constitutes a forecast or projection, each of
Holdings and the Borrower represents only that it acted in good faith and
utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit or schedule and it is
understood that actual results may differ from forecasts and projections.

 

                SECTION 3.16.  Employee
Benefit Plans.  Each of
the Borrower and each of its ERISA Affiliates is in compliance in all material
respects with the applicable provisions of ERISA and the Code and the
regulations and published interpretations thereunder.  No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events, could reasonably be
expected to result in a Material Adverse Effect.  The present value of all benefit liabilities under any
underfunded Plan (based on the assumptions used to fund such plan and when
considered together with all such underfunded Plans) did not, as of the last
annual valuation dates applicable thereto, exceed the fair market value of the
assets of such underfunded Plans by an amount that could reasonably be expected
to result in a Material Adverse Effect.

 

50

 

                SECTION 3.17.  Environmental
Matters.  (a)  Except as set forth in Schedule 3.17
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, none of Holdings, the Borrower or any of the 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.

 

(b)                                 Since the date of this Agreement, there has
been no change in the status of the matters disclosed on Schedule 3.17
that, individually or in the aggregate, has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.

 

                SECTION 3.18.  Insurance.  Schedule 3.18 sets forth a true,
complete and correct description of all insurance maintained by the Borrower or
by the Borrower for its Subsidiaries as of the date hereof and the Closing
Date.  As of each such date, such
insurance is in full force and effect and all premiums have been duly paid if
due.  The Borrower and its Subsidiaries
have insurance in such amounts and covering such risks and liabilities as are,
when considered in its entirety, in the good faith judgment of the Borrower
prudent in the ordinary course of business of the Borrower and its
Subsidiaries.

 

                SECTION 3.19.  Security
Documents.  (a)  The Guarantee and Collateral Agreement, upon
execution and delivery thereof by the parties thereto, will create in favor of
the Administrative Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral (as defined in
the Guarantee and Collateral Agreement) and the proceeds thereof and (i) when
the Pledged Collateral (as defined in the Guarantee and Collateral Agreement)
is delivered to the Administrative Agent, the Guarantee and Collateral
Agreement shall constitute a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Pledged Collateral, in each case prior and superior in right to any other
person, and (ii) when financing statements in appropriate form are filed in the
offices specified on Schedule 3.19(a), the Lien created under the
Guarantee and Collateral Agreement will constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
all such Collateral as to which a security interest may be perfected by such a
filing (other than Intellectual Property, as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
person, other than with respect to Liens expressly permitted by
Section 6.2.

 

(b)                                 Upon the recordation of the Guarantee and
Collateral Agreement with the United States Patent and Trademark Office and the
United States Copyright Office, together with the financing statements in
appropriate form filed in the offices specified on Schedule 3.19(a), the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
the Intellectual Property (as defined in the Guarantee and Collateral
Agreement) in which a security interest may be perfected by filing in the
United States and its territories and possessions, in each case prior and
superior in right to any other person (it being understood that subsequent
recordings in the United States Patent and Trademark Office and the United States
Copyright Office may be necessary to perfect a Lien on registered trademarks,
trademark applications and copyrights acquired by the Loan Parties after the
date hereof).

 

(c)                                  The Mortgages are effective to create in
favor of the Administrative Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable Lien on all of the Loan Parties’ right,
title and interest in and to the Mortgaged Property thereunder and the proceeds
thereof, and when the Mortgages are filed in the offices specified on
Schedule 3.19(d), the Mortgages shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in such Mortgaged Property and the proceeds thereof, in each case prior and
superior in right to any other person, other than with respect to the rights of
persons pursuant to Liens expressly permitted by Section 6.2.

 

51

 

                SECTION 3.20.  Location
of Real Property and Leased Premises.  Schedule 3.20(a) lists completely and correctly as of the
Closing Date all domestic real property owned by the Borrower and the
Subsidiaries and the addresses thereof. 
The Borrower and the Subsidiaries, as the case may be, as of the Closing
Date, own in fee all the real property set forth on Schedule 3.20(a).  Schedule 3.20(b) lists completely and
correctly as of the Closing Date all material domestic real property leased by
the Borrower and the Subsidiaries and the addresses thereof.  The Borrower and the Subsidiaries, as the
case may be, as of the Closing Date, have valid leasehold interests in all the
real property set forth on Schedule 3.20(b).

 

                SECTION 3.21.  Labor
Matters.  As of the date
hereof and the Closing Date, there are no strikes, lockouts or slowdowns against
Holdings, the Borrower or any Subsidiary pending or, to the knowledge of
Holdings or the Borrower, threatened. 
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 Holdings, the Borrower or any
Subsidiary is bound.  Except to the
extent any of the following, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, (a) the hours worked
by and payments made to employees of Holdings, the Borrower and the
Subsidiaries have not been in violation in any material respect of the Fair
Labor Standards Act or any other applicable Federal, state, local or foreign
law dealing with such matters and (b) all payments due from Holdings, the
Borrower or any Subsidiary, or for which any claim may be made against
Holdings, the Borrower or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of Holdings, the Borrower or such Subsidiary.

 

                SECTION 3.22.  Solvency.  Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the assets of the Loan Parties taken as a whole, at
a fair valuation, will exceed their debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of
the Loan Parties taken as a whole will be greater than the amount that will be
required to pay the probable liability of their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) the Loan Parties taken as a whole will be able
to pay their debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (d) the Loan
Parties taken as a whole will not have unreasonably small capital with which to
conduct the business in which they are engaged as such business is now
conducted and is proposed to be conducted following the Closing Date.

 

                SECTION 3.23.  Representations
and Warranties in Acquisition Documents.  All representations and warranties set forth
in the Acquisition Documents were true and correct at the time as of which such
representations and warranties were made (or deemed made) except where the
failure to be true and correct could not reasonably be likely to have a
Material Adverse Effect.

 

                SECTION 3.24.  Senior
Indebtedness.  The
Obligations constitute “Senior Indebtedness” under and as defined in the Senior
Subordinated Note Indenture.

 

                SECTION 3.25.  Certain
Treasury Regulation Matters. 
The Borrower does not intend to treat the Loans and related transactions
as being a “reportable” transaction (within the meaning of Treasury Regulation
1.6011-4).  The Borrower acknowledges
that the Administrative Agent and one or more of the Lenders may treat its
Loans as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1 to the extent that the Borrower’s application of the
proceeds of the Loans requires the same and the Administrative Agent and such
Lender or Lenders, as applicable, may, in connection therewith, maintain such
lists and other records as they may determine is required by such Treasury
Regulation.

 

                SECTION 3.26.  Foreign
Assets Control Regulations, Etc.  None of the requesting or borrowing of the Loans, the requesting
or issuance, extension or renewal of any Letters of Credit or the use of the
proceeds of any

 

52

 

thereof
will violate the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as
amended) (the “Trading With the Enemy Act”) or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) (the “Foreign Assets Control Regulations”) or
any enabling legislation or executive order relating thereto (which for the
avoidance of doubt shall include, but shall not be limited to (a) Executive
Order 13224 of September 21, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (Public Law 107-56)).  To the knowledge of the Borrower, neither the
Borrower nor any of its Subsidiaries (a) is a “blocked person” as described in
the Executive Order, the Trading With the Enemy Act or the Foreign Assets
Control Regulations or (b) engages transactions with any such “blocked person”
blocked by such order, law or regulation.

 

ARTICLE IV

 

Conditions of Lending

 

The
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder are subject to the satisfaction of the following
conditions:

 

                SECTION 4.1.  All
Credit Events.  On the
date of each Borrowing, including each Borrowing of a Swingline Loan and on the
date of each issuance, amendment, extension or renewal of a Letter of Credit
(each such event being called a “Credit Event”):

 

(a)                                  The Administrative Agent shall have received
a notice of such Borrowing as required by Section 2.3 (or such notice
shall have been deemed given in accordance with Section 2.3) or, in the
case of the issuance, amendment, extension or renewal of a Letter of Credit,
the Issuing Bank and the Administrative Agent shall have received a notice
requesting the issuance, amendment, extension or renewal of such Letter of
Credit as required by Section 2.22(b) or, in the case of the Borrowing of
a Swingline Loan, the Swingline Lender and the Administrative Agent shall have
received a notice requesting such Swingline Loan as required by
Section 2.21(b).

 

(b)                                 The representations and warranties set forth
in Article III hereof and in each other Loan Document shall be true and
correct in all material respects on and as of the date of such Credit Event
with the same effect as though made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date,
in which case they shall be true and correct in all material respects on and as
of such earlier date.

 

(c)                                  At the time of and immediately after such
Credit Event, no Event of Default or Default shall have occurred and be
continuing.

 

Each
Credit Event shall be deemed to constitute a representation and warranty by the
Borrower and Holdings on the date of such Credit Event as to the matters
specified in paragraphs (b) and (c) of this Section 4.1.

 

                SECTION 4.2.  First
Credit Event.  On the
Closing Date:

 

(a)                                  The Administrative
Agent shall have received, on behalf of itself, the Lenders and the Issuing
Bank, a favorable written opinion of (i) Willkie Farr & Gallagher, counsel
for Holdings and the Borrower, substantially to the effect set forth in Exhibit
E-1, and (ii) each local counsel listed on Schedule 4.2(a), substantially
to the effect set forth in Exhibit E-2, in each case

 

53

 

(A) dated the Closing Date, (B) addressed to the Issuing Bank, the
Administrative Agent and the Lenders and (C) covering such other matters
relating to the Loan Documents and the Transactions as the Administrative Agent
shall reasonably request, and Holdings and the Borrower hereby request such
counsel to deliver such opinions.

 

(b)                                 All legal matters
incident to this Agreement, the Borrowings and extensions of credit hereunder
and the other Loan Documents shall be reasonably satisfactory to the Lenders,
to the Issuing Bank and to the Administrative Agent.

 

(c)                                  The Administrative
Agent shall have received (i) a copy of the certificate or articles of
incorporation, including all amendments thereto, of each Loan Party, certified
as of a recent date by the Secretary of State of the state of its organization,
and a certificate as to the good standing of each Loan Party as of a recent
date, from such Secretary of State; (ii) a certificate of the Secretary or
Assistant Secretary of each Loan Party dated the Closing Date and certifying
(A) that attached thereto is a true and complete copy of the by-laws of such
Loan Party as in effect on the Closing Date and at all times since a date prior
to the date of the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the Board of
Directors of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which such person is a party and, in the
case of the Borrower, the borrowings hereunder, and that such resolutions have
not been modified, rescinded or amended and are in full force and effect, (C)
that the certificate or articles of incorporation of such Loan Party have not
been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above and (D) as
to the incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf of
such Loan Party; (iii) a certificate of another officer as to the incumbency
and specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (ii) above; and (iv) such other documents as the
Lenders, the Issuing Bank or the Administrative Agent may reasonably request.

 

(d)                                 The Administrative
Agent shall have received a certificate, dated the Closing Date and signed by a
Financial Officer of the Borrower, confirming compliance with the conditions
precedent set forth in paragraphs (b) and (c) of Section 4.1.

 

(e)                                  The Administrative
Agent and the Syndication Agent shall have received all Fees and other amounts
due and payable on or prior to the Closing Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder or under any other Loan Document.

 

(f)                                    The Security
Documents shall have been duly executed by each Loan Party that is to be a
party thereto and shall be in full force and effect on the Closing Date.  The Administrative Agent on behalf of the
Secured Parties shall have a security interest in the Collateral of the type
and priority described in each Security Document, except to the extent
otherwise provided herein or in such Security Documents.

 

(g)                                 The Administrative
Agent shall have received a Perfection Certificate with respect to the Loan
Parties dated the Closing Date and duly executed by a Responsible Officer of
the Borrower, and shall have received the results of a search of the Uniform
Commercial Code filings (or equivalent filings) made with respect to the Loan
Parties in the states (or other jurisdictions) of formation of such persons, in
which the chief executive office of each such person is located and in the
other jurisdictions in which such persons maintain property, in each case as
indicated on such Perfection Certificate, together with copies of the financing
statements

 

54

 

(or similar documents) disclosed by such search, and accompanied by
evidence satisfactory to the Administrative Agent that the Liens indicated in
any such financing statement (or similar document) would be permitted under
Section 6.2 or have been or will be contemporaneously released or
terminated.

 

(h)                                 (i)  Each of the Mortgages, substantially in the
form of Exhibit F, relating to each of the Mortgaged Properties shall have been
duly executed by the parties thereto and delivered to the Administrative Agent
and shall be in full force and effect, (ii) each of such Mortgaged Properties
shall not be subject to any Lien other than those permitted under
Section 6.2, (iii) each of such Mortgages shall have been filed and
recorded in the recording office as specified on Schedule 3.19(d) (or a
lender’s title insurance policy or a final marked commitment, in form and
substance acceptable to the Administrative Agent, insuring such Mortgage as a
first lien on such Mortgaged Property (subject to any Lien permitted by
Section 6.2) shall have been received by the Administrative Agent) and, in
connection therewith, the Administrative Agent shall have received evidence
satisfactory to it of each such filing and recordation and (iv) the
Administrative Agent shall have received such other documents, including a
policy or policies of title insurance issued by a nationally recognized title
insurance company, together with such endorsements, coinsurance and reinsurance
as may be reasonably requested by the Administrative Agent and the Lenders,
insuring the Mortgages as valid first liens on the Mortgaged Properties, free
of Liens other than those permitted under Section 6.2.

 

(i)                                     The Administrative
Agent shall have received a copy of, or a certificate as to coverage under, the
insurance policies required by Section 5.2 and the applicable provisions
of the Security Documents, each of which shall be endorsed or otherwise amended
to include a customary lender’s loss payable endorsement and to name the
Administrative Agent on behalf of the Secured Parties as additional insured, in
form and substance satisfactory to the Administrative Agent.

 

(j)                                     Acquisition,
etc.  The following transactions
shall have been consummated, in each case on terms and conditions reasonably
satisfactory to the Lenders:

 

(1)                                  the Acquisition shall
have been consummated.

 

(2)                                  Holdings shall have
received at least $275,000,000 from the proceeds of equity issued by Holdings,
and such proceeds shall have been contributed to the Borrower (the “Holdings
Equity Contribution”);

 

(3)                                  the Borrower shall
have received at least $225,000,000 and €150,000,000 in gross cash proceeds
from the issuance of the Senior Subordinated Notes;

 

(4)                                  the Administrative
Agent shall have received satisfactory evidence that the fees and expenses to
be incurred in connection with the Acquisition and the financing thereof shall
not exceed $55,000,000;

 

(5)                                  (i) The
Administrative Agent shall have received satisfactory evidence that the
Existing Credit Agreement shall have been terminated and all amounts thereunder
shall have been paid in full and (ii) arrangements satisfactory to the
Administrative Agent shall have been made for the termination of all Liens
granted in connection therewith; and

 

55

 

(6)                                  Immediately after
giving effect to the Transactions and the other transactions contemplated
hereby, the Borrower and the Subsidiaries shall have outstanding no
Indebtedness or preferred stock other than (a) Indebtedness outstanding under
this Agreement, (b) the Senior Subordinated Notes and (c) Indebtedness set
forth on Schedule 6.01. 
Immediately after giving effect to the Transactions and the other
transactions contemplated hereby, Holdings shall have no outstanding
Indebtedness or preferred stock other than (a) its Guarantee of the
Indebtedness outstanding under this Agreement and its Guarantee of the Senior
Subordinated Notes.

 

(k)                                  The Lenders shall
have received the financial statements and opinion referred to in
Section 3.5.

 

(l)                                     All requisite
Governmental Authorities shall have approved or consented to the Transactions
and the other transactions contemplated hereby to the extent required, all
applicable appeal periods shall have expired and there shall not be any pending
or threatened litigation, governmental, administrative or judicial action that
could reasonably be expected to prevent or impose materially burdensome
conditions on the Transactions or the other transactions contemplated
hereby.  All requisite third-party
consents necessary for the consummation of the Acquisition shall have been
obtained except for those third-party consents where the failure to so obtain
such consents would not have a Material Adverse Effect.

 

(m)                               The Lenders shall have
received a certificate of the chief financial officer of the Borrower
certifying that the Leverage Ratio as at January 3, 2004 for fiscal year
2003 is no greater than 6.1 to 1.0 and containing all information and
calculations necessary for determining such ratio.

 

(n)                                 The aggregate amount
of the Holdings Equity Contribution shall be no less than the product of (x)
0.25 and (y) the Total Enterprise Value of the Borrower.

 

(o)                                 The Administrative
Agent shall have received a solvency certificate from the chief financial
officer of the Borrower documenting the solvency of the Borrower and its
Subsidiaries after giving effect to the Transactions, in form and substance
reasonably satisfactory to the Administrative Agent.

 

ARTICLE V

 

Affirmative Covenants

 

Each
of Holdings and the Borrower covenants and agrees with each Lender that so long
as this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document shall have been paid
in full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, each of Holdings and the Borrower
will, and will cause each of the Material Subsidiaries to:

 

                SECTION 5.1.  Existence;
Businesses and Properties. 
(a)  Do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence, except as otherwise expressly permitted under Section 6.5.

 

56

 

(b)                                 Do or cause to be done all things necessary
to obtain, preserve, renew, extend and keep in full force and effect all
rights, licenses, permits, franchises, authorizations, patents, copyrights,
trademarks and trade names used in or relating to the conduct of its business,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; maintain and operate such business in substantially
the manner in which it is presently conducted and operated, including any
reasonable extension, development or expansion thereof; comply with all
applicable laws, rules, regulations and decrees and orders of any Governmental
Authority, whether now in effect or hereafter enacted, except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect;
and at all times maintain and preserve all property material to the conduct of
such business and keep such property in good repair, working order and
condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

                SECTION 5.2.  Insurance.  (a) 
Keep its insurable properties adequately insured at all times by
financially sound and reputable insurers; maintain such other insurance, to
such extent and against such risks, including fire and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses operating in the same or similar locations, including public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any
properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law.

 

(b)                                 Cause all such policies covering any
Collateral to be endorsed or otherwise amended to include a customary lender’s
loss payable endorsement, in form and substance satisfactory to the
Administrative Agent, which endorsement shall provide that, from and after the
Closing Date, if the insurance carrier shall have received written notice from
the Administrative Agent of the occurrence of an Event of Default, the insurance
carrier shall pay all proceeds otherwise payable to the Borrower or the Loan
Parties under such policies directly to the Administrative Agent; cause all
such policies to provide that neither the Borrower, the Administrative Agent
nor any other party shall be a coinsurer thereunder and to contain a
“Replacement Cost Endorsement”, without any deduction for depreciation, and
such other provisions as the Administrative Agent may reasonably require from
time to time to protect their interests; deliver evidence of all such policies
to the Administrative Agent; upon the occurrence of an Event of Default,
deliver original or certified copies of all such policies to the Administrative
Agent upon its request; cause each such policy to provide that it shall not be
canceled, modified or not renewed (i) by reason of nonpayment of premium upon
not less than 10 days’ prior written notice thereof by the insurer to the
Administrative Agent (giving the Administrative Agent the right to cure
defaults in the payment of premiums) or (ii) for any other reason upon not less
than 30 days’ prior written notice thereof by the insurer to the Administrative
Agent; deliver to the Administrative Agent, prior to the cancellation,
modification or nonrenewal of any such policy of insurance, evidence of a
renewal or replacement policy (or other evidence of renewal of a policy
previously delivered to the Administrative Agent) together with evidence
satisfactory to the Administrative Agent of payment of the premium therefor.

 

(c)                                  If at any time the area in which the Premises
(as defined in the Mortgages) are located is designated (i) a “flood hazard
area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), obtain flood insurance in such
total amount as the Administrative Agent or the Required Lenders may from time
to time require, and otherwise comply with the National Flood Insurance Program
as set forth in the Flood Disaster Protection Act of 1973, as it may be amended
from time to time, or (ii) a “Zone 1” area, obtain earthquake insurance in such
total amount as the Administrative Agent or the Required Lenders may from time
to time require.

 

57

 

(d)                                 With respect to any Mortgaged Property, carry
and maintain comprehensive general liability insurance including a “broad form”
commercial general liability endorsement and coverage on an occurrence basis
against claims made for personal injury (including bodily injury, death and
property damage) and umbrella liability insurance against any and all claims,
in no event for a combined single limit of less than $15,000,000, naming the
Administrative Agent as an additional insured, on forms satisfactory to the
Administrative Agent.

 

(e)                                  Notify the Administrative Agent immediately
whenever any separate insurance concurrent in form or contributing in the event
of loss with that required to be maintained under this Section 5.2 is
taken out by the Borrower; and promptly deliver to the Administrative Agent a
duplicate original copy of such policy or policies.

 

                SECTION 5.3.  Taxes.  Pay all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect
of its property, before the same shall become delinquent or in default;
provided, however, that such payment and discharge shall not be required with
respect to any such tax, assessment, charge or levy so long as (a) the validity
or amount thereof shall be contested in good faith by appropriate proceedings and
the Borrower shall have set aside on its books adequate reserves with respect
thereto in accordance with GAAP and such contest operates to suspend collection
of the contested obligation, tax, assessment or charge and enforcement of a
Lien and, in the case of a Mortgaged Property, there is no risk of forfeiture
of such property or (b) the nonpayment thereof could not reasonably be expected
to result in a Material Adverse Effect.

 

                SECTION 5.4.  Financial
Statements, Reports, etc. 
In the case of the Borrower, furnish to the Administrative Agent (either
physically or through electronic delivery reasonably acceptable to the
Administrative Agent), which shall furnish to each Lender:

 

(a)                                  within 90 days after
the end of each fiscal year, its consolidated balance sheet and related
statements of income, stockholders’ equity and cash flows showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the close of
such fiscal year and the results of its operations and the operations of such
Subsidiaries during such year, together with comparative figures for the
immediately preceding fiscal year, all audited by Ernst & Young LLP or
other independent public accountants of recognized national standing and
accompanied by an opinion of such accountants (which shall not be qualified in
any material respect) to the effect that such consolidated financial statements
fairly present the financial condition and results of operations of the
Borrower and its 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, its
consolidated balance sheet and related statements of income, stockholders’
equity and cash flows showing the financial condition of the Borrower and its
consolidated Subsidiaries as of the close of such fiscal quarter and the
results of its operations and the operations of such Subsidiaries during such
fiscal quarter and the then elapsed portion of the fiscal year, and comparative
figures for the same periods in the immediately preceding fiscal year, all
certified by one of its Financial Officers as fairly presenting the financial
condition and results of operations of the Borrower and its consolidated Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments;

 

(c)                                  concurrently with any
delivery of financial statements under paragraph (a), or (b) above, a
certificate of the accounting firm (in the case of paragraph (a)) or Financial
Officer (in the case of paragraph (b)) opining on or certifying such statements
(which certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility

 

58

 

for legal interpretations and which may be provided by a Financial
Officer if accounting firms generally are not providing such certificates) (i)
certifying that no Event of Default or Default has occurred or, if such an
Event of Default or Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto and (ii) setting forth computations in reasonable detail satisfactory
to the Administrative Agent demonstrating compliance with the covenants
contained in Sections 6.6, 6.10, 6.11 and 6.12 and, in the case of a
certificate delivered with the financial statements required by paragraph (a)
above, (x) setting forth the Borrower’s calculation of Excess Cash Flow and (y)
certifying that there has been no change in the business activities, assets or
liabilities of Holdings, or if there has been any such change, describing such
change in reasonable detail and certifying that Holdings is in compliance with
Section 6.8;

 

(d)                                 within 45 days after
the commencement of each fiscal year of the Borrower, a detailed consolidated
budget for such fiscal year (including a projected consolidated balance sheet
and related statements of projected operations and cash flows as of the end of
and for such fiscal year);

 

(e)                                  promptly after the
same become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by Holdings, the Borrower or any
Subsidiary with the SEC, or any Governmental Authority succeeding to any or all
of the functions of said Commission, or with any national securities exchange,
or, after the initial Public Equity Offering (disregarding for purposes of this
Section 5.4(e) the Net Cash Proceeds dollar threshold contained in the
definition of such term), distributed to its shareholders, as the case may be;

 

(f)                                    promptly after the
receipt thereof by Holdings or the Borrower or any Subsidiary, a copy of any
“management letter” received by any such person from its certified public
accountants and the management’s response thereto; and

 

(g)                                 promptly, from time to
time, such other information regarding the operations, business affairs and
financial condition of Holdings, the Borrower or any Subsidiary, or compliance
with the terms of any Loan Document, as the Administrative Agent or any Lender
may reasonably request.

 

Documents
required to be delivered pursuant to Section 5.4(a), (b) or (e) (to the
extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (i) on which the Borrower posts such documents,
or provides a link thereto on the Borrower’s website on the Internet at the
Borrower’s website address; or (ii) on which such documents are posted on the
Borrower’s behalf on IntraLinks/IntraAgency or another relevant website, if
any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent).

 

                SECTION 5.5.  Litigation
and Other Notices. 
Furnish to the Administrative Agent, the Issuing Bank and each Lender
prompt written notice of the following:

 

(a)                                  any Event of Default or Default, specifying the
nature and extent thereof and the corrective action (if any) taken or proposed
to be taken with respect thereto;

 

(b)                                 the filing or commencement of, or any threat
or notice of intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against the Borrower or any Affiliate thereof that could reasonably
be expected to result in a Material Adverse Effect;

 

59

 

(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 ERISA Affiliates in an
aggregate amount exceeding $2,500,000; and

 

(d)                                 any development that has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect.

 

               SECTION 5.6.  Information
Regarding Collateral. 
(a)  Furnish to the
Administrative Agent prompt written notice of any change in (i) any Loan
Party’s legal name, (ii) the jurisdiction of organization or formation of any
Loan Party, (iii) any Loan Party’s identity or corporate structure or (iv) any
Loan Party’s Federal Taxpayer Identification Number.  Holdings and the Borrower agree not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code 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.  Holdings and the Borrower also agree
promptly to notify the Administrative Agent if any material portion of the
Collateral is damaged or destroyed.

 

(b)                                 In the case of the Borrower, each year, at
the time of delivery of the annual financial statements with respect to the
preceding fiscal year pursuant to Section 5.4(a), deliver to the
Administrative Agent a certificate of a Financial Officer setting forth the
information required pursuant to Section 2 of the Perfection Certificate
or confirming that there has been no change in such information since the date
of the Perfection Certificate delivered on the Closing Date or the date of the
most recent certificate delivered pursuant to this Section 5.6.

 

                SECTION 5.7.  Maintaining
Records; Access to Properties and Inspections.  Keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
requirements of law are made of all dealings and transactions in relation to
its business and activities.  Each Loan
Party will, and will cause each of its subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the financial records and the properties of Holdings, the Borrower
or any Material Subsidiary at reasonable times and as often as reasonably
requested (but not, except during the continuance of an Event of Default, more
than two times per fiscal year) and to make extracts from and copies of such
financial records, and permit any representatives designated by the
Administrative Agent or any Lender to discuss the affairs, finances and
condition of Holdings, the Borrower or any Material Subsidiary with the
officers thereof and independent accountants therefor.  Except following the occurrence and during
the continuance of any Default, the Borrower shall be entitled to have a
representative present at all such discussions and to obtain a copy of all
written requests for information relating to any Loan Party made by the
Administrative Agent or any Lender to any third party.

 

                SECTION 5.8.  Use of
Proceeds.  Use the
proceeds of (a) the Term Loans (other than the Incremental Term Loans) to pay
(i) a portion of the Existing Credit Agreement and other existing Indebtedness
of the Borrower, (ii) transaction costs incurred in connection with the
Transactions and (iii) a portion of the purchase price set forth in the
Acquisition Agreement, (b) the Revolving Loans and Swingline Loans for working
capital and general corporate purposes; provided, that up to $10,000,000
in the aggregate of Revolving Loans and Swingline Loans may be borrowed on the
Closing Date to pay the costs described in clauses (a)(i) through (a)(iii)
above, (c) the Letters of Credit for general corporate purposes and (d)
Incremental Term Loans for general corporate purposes (including Permitted
Acquisitions).

 

                SECTION 5.9.  Further
Assurances.  Execute any
and all further documents, financing statements, agreements and instruments,
and take all further action (including (i) filing Uniform Commercial Code and
other financing statements, mortgages and deeds of trust and (ii) delivering
duly executed deposit account control agreements as contemplated by, and within
the time period referred to in, the Guarantee and

 

60

 

Collateral
Agreement) that may be required under applicable law, or that the Required
Lenders or the Administrative Agent may reasonably request, in order to
effectuate the transactions contemplated by the Loan Documents and in order to
grant, preserve, protect and perfect the validity and first priority of the
security interests created or intended to be created by the Security
Documents.  The Borrower will cause any
subsequently acquired or organized Domestic Subsidiary (other than any Inactive
Subsidiary) or any Domestic Subsidiary that ceases to be an Inactive Subsidiary
to become a Loan Party by executing the Guarantee and Collateral Agreement and
each other applicable Security Document in favor of the Administrative
Agent.   In addition, subject to the
last sentence of this Section 5.9, from time to time, the Borrower will,
at its cost and expense, promptly secure the Obligations by pledging or creating,
or causing to be pledged or created, perfected security interests with respect
to such of its assets and properties as the Administrative Agent or the
Required Lenders shall designate (it being understood that it is the intent of
the parties that the Obligations shall be secured by substantially all the
assets of the Borrower and its Subsidiaries (including real and other
properties acquired subsequent to the Closing Date, but excluding real property
with a value of less than $1,000,000, leasehold real property, other immaterial
leasehold property, and other Excluded Property (as defined in the Guarantee
and Collateral Agreement).  Such
security interests and Liens will be created under the Security Documents and
other security agreements, mortgages, deeds of trust and other instruments and
documents in form and substance satisfactory to the Administrative Agent, and
the Borrower shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Administrative Agent shall reasonably request to
evidence compliance with this Section 5.9.  The Borrower agrees to provide such evidence as the
Administrative Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien.  In furtherance of the foregoing, the Borrower will give prompt
notice to the Administrative Agent of the acquisition by it or any of the
Domestic Subsidiaries of any real property (or any interest in real property)
having a value in excess of $1,000,000. 
The actions required under this Section 5.9 shall be taken with 30
days (or such later time as may be acceptable to the Administrative Agent)
after the event giving rise to the requirement to take such action.  Notwithstanding the foregoing, (x) the
Administrative Agent shall not take a security interest in those assets as to
which the Administrative Agent shall determine, in its reasonable discretion,
that the cost of obtaining such Lien (including any mortgage, stamp,
intangibles or other tax) are excessive in relation to the benefit to the
Lenders of the security afforded thereby and (y) Liens required to be granted
pursuant to this Section 5.9 shall be subject to exceptions and
limitations consistent with those set forth in the Collateral Documents as in
effect on the Closing Date (to the extent appropriate in the applicable
jurisdiction).

 

                SECTION 5.10.   Certain Treasury Regulation Matters.  In the event the Borrower determines to take
any action inconsistent with its intention as set forth in the first sentence
of Section 3.25, it will promptly notify the Administrative Agent thereof.

 

                SECTION 5.11.  Hedging
Agreements.  In the case
of the Borrower, within 90 days after the Closing Date, enter into, and
thereafter maintain, Hedging Agreements with one or more Lenders (or Affiliates
thereof) to the extent necessary to provide that at least 50% of the aggregate
principal amount of Funded Debt of the Borrower outstanding on the Closing Date
is subject to either a fixed interest rate or interest rate protection for a
period of not less than two years from the Closing Date, which Hedging
Agreements shall have terms and conditions reasonably satisfactory to the
Administrative Agent.

 

                SECTION
5.12.  Environmental Laws. 
Except, in each case, as would not, individually or in the aggregate,
have a Material Adverse Effect:

 

(a)  Comply in all material respects with, and
use reasonable efforts to ensure compliance in all material respects by all
tenants and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply in all material respects with and maintain, and use
reasonable efforts to ensure that all

 

61

 

tenants
and subtenants obtain and comply in all material respects with and maintain,
any and all Environmental Permits required of them by any applicable
Environmental Laws.  For purposes of
this Section 5.12(a), noncompliance with the foregoing shall be deemed not
to constitute a breach of this covenant, provided, that upon learning of
any actual or suspected noncompliance, Borrower shall promptly undertake
reasonable efforts to achieve compliance.

 

(b)                                 Conduct and complete in all material respects
all investigations, studies, sampling and testing, and all remedial, removal
and other actions required to be undertaken by any Group Member under
Environmental Laws and promptly comply with all orders and directives
applicable to any Group Member of all Governmental Authorities regarding
Environmental Laws; provided, however, that this covenant shall
be deemed not violated if the relevant Group Member promptly challenges in good
faith any such order or directive in a manner consistent with all applicable
Environmental Laws and other Requirements of Law and pursues such challenge or challenges
diligently.

 

(c)                                  Generate, use, treat, store, release, dispose
of, and otherwise manage Materials of Environmental Concern in a manner that
would not reasonably be expected to result in a material liability to any Group
Member or to materially affect any real property owned or leased by any of
them; and take reasonable efforts to prevent any other Person from generating,
using, treating, storing, releasing, disposing of, or otherwise managing
Materials of Environmental Concern in a manner that could reasonably be
expected to result in a material liability to, or materially affect any real
property owned or operated by, any Group Member.  For purposes of this Section 5.12(c), noncompliance with the
foregoing shall be deemed not to constitute a breach of this covenant, provided,
that, upon learning of any actual or suspected noncompliance, the Borrower
shall promptly undertake reasonable efforts to remove such Materials of
Environmental Concern or otherwise remediate them in a manner consistent with
applicable Environmental Law.

 

(d)                                 Maintain, update as appropriate, and
implement in all material respects an ongoing program reasonably designed to
ensure that all the properties and operations of the Group Members are
regularly and reasonably reviewed by competent professionals to identify and
promote compliance with and to reasonably and prudently manage any liabilities
or potential liabilities under any Environmental Law that may affect any Group
Member, including, without limitation, compliance and liabilities relating
to:  discharges to air and water;
acquisition, transportation, storage and use of hazardous materials; waste
disposal; repair, maintenance and improvement of properties; employee health
and safety; species protection; and recordkeeping.

 

ARTICLE VI

 

Negative Covenants

 

Each
of Holdings and the Borrower covenants and agrees with each Lender that, so
long as this Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Fees and
all other expenses or amounts payable under any Loan Document have been paid in
full and all Letters of Credit have been cancelled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, neither Holdings nor the Borrower
will, nor will they cause or permit any of the Material Subsidiaries to:

 

                SECTION
6.1.  Indebtedness. 
Incur, create, assume or permit to exist any Indebtedness, except:

 

62

 

(a)                                  Indebtedness existing
on the date hereof and set forth in Schedule 6.1, including in the case of
lines of credit the maximum amount of Indebtedness permitted to be incurred
thereunder;

 

(b)                                 Indebtedness created
hereunder and under the other Loan Documents;

 

(c)                                  intercompany
Indebtedness of Holdings, the Borrower and the Subsidiaries to the extent
permitted by Section 6.4(c);

 

(d)                                 Indebtedness of the
Borrower or any Subsidiary incurred to finance the acquisition, construction or
improvement of any fixed or capital assets, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof (plus the amount of any interest, premiums or
penalties required to be paid thereon plus fees and expenses associated
therewith); provided, that (i) such Indebtedness is incurred prior to or
within 120 days after such acquisition or the completion of such construction
or improvement and (ii) the aggregate principal amount of Indebtedness
permitted by this Section 6.1(d), when combined with the aggregate
principal amount of all Capital Lease Obligations and Synthetic Lease
Obligations incurred pursuant to Section  6.1(e), shall not exceed
$25,000,000 at any time outstanding;

 

(e)                                  Capital Lease
Obligations and Synthetic Lease Obligations in an aggregate principal amount,
when combined with the aggregate principal amount of all Indebtedness incurred
pursuant to Section 6.1(d), not in excess of $25,000,000 at any time
outstanding;

 

(f)                                    Indebtedness under
completion guarantees, performance or surety bonds or with respect to workers’
compensation claims, in each case incurred in the ordinary course of business;

 

(g)                                 (i) Indebtedness of
the Borrower in respect of the Senior Subordinated Notes in an aggregate
principal amount not to exceed $400,000,000 at any time outstanding; provided,
however, that additional Indebtedness of the Borrower in respect of the
Senior Subordinated Notes may be incurred so long as (w) the Borrower complies
with the provisions of Section 2.13(d), (x) no Default or Event of Default
shall have occurred or shall result therefrom, (y) the Borrower will be in Pro
Forma Compliance and (z) to the extent the Borrower uses the proceeds of such
Indebtedness to finance the cash consideration payable in a Permitted
Acquisition (including the refinancing of Indebtedness of the Acquired Entity
and the payment of related fees and expenses), the principal amount of such
Indebtedness incurred, when combined with the aggregate principal amount of
Indebtedness incurred pursuant to Section 6.1(i), shall not exceed
$250,000,000 at any time outstanding; and (ii) Guarantees of any Guarantor in
respect of such Indebtedness, provided that such Guarantees are
subordinated to the same extent as the obligations of the Borrower in respect
of the Senior Subordinated Notes;

 

(h)                                 Indebtedness acquired
or assumed by the Borrower or any Subsidiary in connection with any Permitted
Acquisition in an aggregate principal amount not in excess of $20,000,000 at
any time outstanding; provided, that such Indebtedness existed at the
time of such Permitted Acquisition and was not created in connection therewith
or in contemplation thereof;

 

(i)                                     unsecured
subordinated Indebtedness of Holdings or the Borrower (which may be Guaranteed
by any Loan Party on a subordinated basis) the proceeds of which are used to
finance the cash consideration payable in a Permitted Acquisition (including
the refinancing of Indebtedness of the Acquired Entity and the payment of
related fees and expenses) in an aggregate principal amount, when combined with
the aggregate principal amount of all

 

63

 

Indebtedness incurred pursuant to the proviso to Section 6.1(g)(i)
(to the extent the proceeds thereof are not required to be applied to the
prepayment of outstanding Term Loans pursuant to Section 2.13(d)), not in
excess of $250,000,000 at any time outstanding; provided, that such
Indebtedness (i) matures after the six-month anniversary of the Term Loan
Maturity Date, (ii) requires no scheduled payment of principal prior to its
maturity, (iii)  contains subordination
provisions that are no less favorable to the Lenders than the subordination
provisions contained in the Senior Subordinated Note Indenture and (iv) does
not require the issuer thereof or any other obligor thereon to maintain any
specified financial condition or performance (other than as a condition to the
taking of certain actions);

 

(j)                                     additional
unsecured subordinated Indebtedness of Holdings or the Borrower (which may be
Guaranteed by any Loan Party on a subordinated basis) the proceeds of which are
used to prepay outstanding Term Loans pursuant to Section 2.13(d); provided,
that such Indebtedness (i) matures after the six-month anniversary of the Term
Loan Maturity Date, (ii) requires no scheduled payment of principal prior to
its maturity, (iii) contains subordination provisions that are no less
favorable to the Lenders than the subordination provisions contained in the
Senior Subordinated Note Indenture and (iv) does not require the issuer thereof
or any other obligor thereon to maintain any specified financial condition or
performance (other than as a condition to the taking of certain actions);

 

(k)                                  Indebtedness under or
in respect of Hedging Agreements that are not speculative in nature;

 

(l)                                     Indebtedness
incurred to extend, renew or refinance any Indebtedness described in
Section 6.1(a), (d), (g), (h), (i) or (j) (“Refinancing Indebtedness”);
provided, that (i) such Refinancing Indebtedness is in an aggregate
principal amount not greater than the aggregate principal amount of the
Indebtedness being extended, renewed or refinanced, plus the amount of any
interest, premiums or penalties required to be paid thereon plus fees and expenses
associated therewith, (ii) such Refinancing Indebtedness has a later or equal
final maturity and a longer or equal weighted average life to maturity than the
Indebtedness being extended, renewed or refinanced, (iii) if the Indebtedness
being extended, renewed or refinanced is subordinated to the Obligations, the
Refinancing Indebtedness is subordinated to the Obligations on terms no less
favorable to the Lenders than the Indebtedness being extended, renewed or
refinanced, (iv) only the obligors in respect of the Indebtedness being
extended, renewed or refinanced may become obligated with respect to such
Refinancing Indebtedness, (v) the security interest(s) granted in connection
with such Refinancing Indebtedness, if any, shall not cover more collateral, in
any material respect, than the security interest(s), if any, granted in
connection with the Indebtedness being refinanced and (vi) the non-economic
covenants, events of default, remedies and other provisions of the Refinancing
Indebtedness, when taken as a whole, shall be materially no less favorable to
the Lenders than those contained in the Indebtedness being extended, renewed or
refinanced;

 

(m)                               Indebtedness arising
from the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds in the
ordinary course of business, so long as such Indebtedness is extinguished
within three Business Days of the incurrence thereof;

 

(n)                                 Indebtedness of
Foreign Subsidiaries not to exceed $50,000,000 in the aggregate at any one
time;

 

64

 

(o)                                 Indebtedness of
Holdings incurred for the purpose of making Restricted Payments or purchasing
stock of management so long as such Indebtedness (i) matures at least six
months after the Term Loan Maturity Date, (ii) requires no scheduled payment of
principal prior to maturity, (iii) does not permit any payments in cash of
interest or other amounts in respect of the principal thereof and (iv) is
subordinated to the prior payment in full of the Obligations on terms
reasonably acceptable to the Administrative Agent;

 

(p)                                 Cash Management
Obligations and other Indebtedness in respect of netting services, overdraft
protections and similar arrangements in each case in connection with deposit
accounts;

 

(q)                                 Indebtedness
consisting of (i) the financing of insurance premiums or (ii) take-or-pay
obligations contained in supply arrangements, in each case, in the ordinary
course of business;

 

(r)                                    Indebtedness
incurred by the Borrower or any of its Subsidiaries constituting reimbursement
obligations with respect to letters of credit issued in the ordinary course of
business, including without limitation letters of credit in respect of workers
compensation claims, health, disability or other employee benefits or property,
casualty or liability insurance or self-insurance or other Indebtedness with
respect to reimbursement-type obligations regarding workers compensation
claims; provided, that (i) upon the drawing of such letters of credit or
the incurrence of such Indebtedness, such obligations are reimbursed within 30
days following such drawing or incurrence and (ii) such letters of credit are
not provided to secure the repayment of other Indebtedness of Holdings, the
Borrower or any of their respective Subsidiaries; and

 

(s)                                  other Indebtedness of
the Borrower or the Domestic Subsidiaries in an aggregate principal amount not
exceeding $50,000,000 at any time outstanding.

 

                SECTION 6.2. 
Liens.  Create, incur, assume or permit to exist any
Lien on any property or assets (including Equity Interests or other securities
of any person, including any Subsidiary) now owned or hereafter acquired by it
or on any income or revenues or rights in respect of any thereof, except:

 

(a)                                  Liens on property or
assets of the Borrower and its Subsidiaries existing on the date hereof and set
forth in Schedule 6.2; provided, that such Liens shall secure only
those obligations which they secure on the date hereof and any extensions,
renewals and replacements thereof permitted hereunder;

 

(b)                                 any Lien created under
the Loan Documents;

 

(c)                                  any Lien existing on
any property or asset prior to the acquisition thereof by the Borrower or any
Subsidiary; provided, that (i) such Lien is not created in contemplation
of or in connection with such acquisition, (ii) such Lien does not apply to any
other property or assets of the Borrower or any Subsidiary and (iii) such Lien
does not materially interfere with the use, occupancy and operation of any
Mortgaged Property;

 

(d)                                 Liens for taxes not
yet due or which are being contested in compliance with Section 5.3;

 

(e)                                  carriers’,
landlords’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business and securing obligations
that are not due and payable or which are being contested in compliance with
Section 5.3;

 

65

 

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

 

(g)                                 deposits to secure the
performance of bids, trade contracts (other than for Indebtedness), leases
(other than Capital Lease Obligations), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

 

(h)                                 zoning restrictions,
easements, rights-of-way, restrictions on use of real property and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, do not materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of the Borrower
or any of its Subsidiaries as currently operated;

 

(i)                                     purchase money
security interests in real property, improvements thereto or equipment
hereafter acquired (or, in the case of improvements, constructed) by the
Borrower or any Subsidiary; provided, that (i) such security interests
secure Indebtedness permitted by Section 6.1, (ii) such security interests
are incurred, and the Indebtedness secured thereby is created, within 120 days
after such acquisition (or construction), and (iii) such security interests do
not apply to any other property or assets of the Borrower or any Subsidiary (it
being agreed that transactions with the same vendor or any Affiliate of such
vendor may be cross-collateralized);

 

(j)                                     Liens arising out
of judgments or awards in respect of which Holdings, the Borrower or any of the
Subsidiaries shall in good faith be prosecuting an appeal or proceedings for
review in respect of which there shall be secured a subsisting stay of
execution pending such appeal or proceedings; provided, that the
aggregate amount of all such judgments or awards (and any cash and the fair
market value of any property subject to such Liens) does not exceed $10,000,000
at any time outstanding;

 

(k)                                  any interest or title
of a licensor, lessor or sublessor under any license or lease agreement
pursuant to which rights are granted to the Borrower or any Subsidiary;

 

(l)                                     licenses, leases
or subleases granted by the Borrower or any Subsidiary to third persons in the
ordinary course of business not interfering in any material respect with the
business of the Borrower or any Subsidiary;

 

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

 

(n)                                 restrictions imposed
in the ordinary course of business on the sale or distribution of designated
inventory pursuant to agreements with customers under which such inventory is
consigned by the customer or such inventory is designated for sale to one or
more customers;

 

(o)                                 (i) Liens on the
assets of a Foreign Subsidiary that is not a Subsidiary Guarantor securing
Indebtedness permitted to be incurred by such Foreign Subsidiary pursuant to
Section 6.1(m) and (ii) other Liens on the assets of a Foreign Subsidiary
that is not a Subsidiary Guarantor securing Indebtedness by such Foreign Subsidiary
not, in the case of this clause (ii), in excess of $1,000,000;

 

66

 

(p)                                 any interest of a
lessor under Liens arising from precautionary UCC financing statement filings
regarding leases entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business;

 

(q)                                 Liens arising out of
conditional sale, title retention, consignment or similar arrangements for the
sale of goods entered into by the Borrower or any of its Subsidiaries in the ordinary
course of business;

 

(r)                                    Liens deemed to
exist in connection with investments in repurchase agreements permitted under
this Agreement;

 

(s)                                  Liens that are
contractual or statutory setoff rights arising in the ordinary course of
business with financial institutions, relating to pooled deposit accounts or
sweep accounts of Holdings and its Subsidiaries to permit satisfaction of
overdraft or similar obligations incurred in the ordinary course of business or
relating to purchase orders or other agreements entered into with customers of
Holdings or any of its Subsidiaries in the ordinary course of business;

 

(t)                                    Liens solely on any
cash earnest money deposits by the Borrower or any of its Subsidiaries in
connection with any letter of intent or purchase agreement permitted under this
Agreement; and

 

(u)                                 other Liens on the
assets of the Borrower or any Domestic Subsidiary that do not, individually or
in the aggregate, secure obligations (or encumber property with a fair market
value) in excess of $50,000,000 at any one time.

 

                SECTION 6.3.  Sale
and Lease-Back Transactions. 
Enter into any arrangement, directly or indirectly, with any person
whereby it shall sell or transfer any property, real or personal, used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property which it intends to use for
substantially the same purpose or purposes as the property being sold or
transferred unless (a) the sale of such property is permitted by Section 6.5
and (b) any Capital Lease Obligations, Synthetic Lease Obligations or Liens
arising in connection therewith are permitted by Sections 6.1 and 6.2, as
applicable.

 

                SECTION 6.4.  Investments,
Loans and Advances. 
Purchase, hold or acquire any Equity Interests, evidences of
indebtedness or other securities of, make or permit to exist any loans or
advances to, or make or permit to exist any investment or any other interest
in, any other person, except:

 

(a)                                  (i) investments by
Holdings, the Borrower and the Subsidiaries existing on the date hereof in the
Equity Interests of the Borrower and the Subsidiaries and (ii) additional
investments by Holdings, the Borrower and the Subsidiaries in the Equity
Interests of the Borrower and the Subsidiaries; provided, that (A) any
such Equity Interests held by a Loan Party shall be pledged pursuant to the
Guarantee and Collateral Agreement (subject to the limitations applicable to
voting stock of a Foreign Subsidiary referred to therein) and (B) the aggregate
amount of investments by Loan Parties in, and loans and advances by Loan
Parties to, Subsidiaries that are not Loan Parties (other than in connection
with (a) any transfer made to pay off the Existing Credit Agreement and (b) the
Proposed Restructuring) (determined without regard to any write-downs or
write-offs of such investments, loans and advances but taking into account
repayments, redemptions, return of capital, etc.) under this clause (ii) shall
not exceed at any time outstanding the sum of (v) $25,000,000, (w) the
principal amount of any loan the proceeds of which are used to fund Capital
Expenditures in an aggregate amount not to exceed $15,000,000 (provided,
that any such loan made by a Loan Party to a Subsidiary that is not a

 

67

 

Loan Party must have a maturity of no greater than, and must be repaid
within, two (2) years from the date of issuance), (x) the principal amount of
any dividend by a Subsidiary that is not a Loan Party to a Loan Party made in
the form of a promissory note payable by such Subsidiary that is not a Loan
Party to such Loan Party (provided, that, in connection with the
issuance of such promissory note, no loans, advances or other payments were
made by such Loan Party to such Subsidiary that is not a Loan Party), (y) the
amount of any investment or principal amount of any advance funded with the
proceeds of Equity Interests issued by Holdings and (z) the amount of any
investment or principal amount of any advance the proceeds of which are used to
fund a Permitted Acquisition and which such Loan Party obtained through items
(I) through (IV) of Section 6.4(g)(iii)(D);

 

(b)                                 Permitted Investments;

 

(c)                                  loans or advances
made by the Borrower to any Subsidiary and made by the Borrower or any
Subsidiary to Holdings, the Borrower or any other Subsidiary; provided,
that (i) any such loans and advances made by a Loan Party shall be evidenced by
a promissory note pledged to the Administrative Agent for the ratable benefit
of the Secured Parties pursuant to the Guarantee and Collateral Agreement, (ii)
the amount of such loans and advances made by Loan Parties to Subsidiaries that
are not Loan Parties shall be subject to the limitation set forth in clause (a)
above and (iii) the aggregate amount of outstanding loans and advances made to
Holdings shall not exceed $3,000,000 during any fiscal year of the Borrower or
$15,000,000 at any time during the term of this Agreement; provided,
that the amount of any loans and advances that can be made during any fiscal
year pursuant to clause (iii) above shall be increased by the amount of unused
permitted loans and advances for any preceding fiscal year so long as the
aggregate amount of such loans and advances does not exceed $15,000,000 at any
time during the term of this Agreement;

 

(d)                                 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;

 

(e)                                  the Borrower and the
Subsidiaries may make loans and advances in the ordinary course of business to
their respective employees so long as the aggregate principal amount thereof at
any time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed $10,000,000 at any time
and advances in the ordinary course of business of payroll payments to
employees;

 

(f)                                    the Borrower may
enter into Hedging Agreements that are not speculative in nature;

 

(g)                                 the Borrower or any
Subsidiary may acquire all or substantially all the assets of a person or line
of business of such person, or not less than 100% of the Equity Interests
(except for directors’ qualifying shares) of a person (referred to herein as
the “Acquired Entity”); provided, that (i) such acquisition was
not preceded by an unsolicited tender offer for such Equity Interests by, or
proxy contest initiated by, Holdings, the Borrower or any Subsidiary; (ii) the
Acquired Entity shall be a going concern and after giving effect to the acquisition
the Borrower shall be in compliance with Section 6.8; (iii) at the time of
such transaction (A) both before and after giving effect thereto, no Event of
Default or Default shall have occurred and be continuing; (B) the Borrower
would be in Pro Forma Compliance (assuming for purposes of making such
determination with respect to the covenant set forth in Section 6.12 that
the Leverage Ratio is at least 0.25 to 1.00 lower than the Leverage Ratio set
forth therein and in effect at the time such

 

68

 

determination is made); (C) after giving effect to such acquisition,
there must be at least $10,000,000 of unused and available Revolving Credit
Commitments; and (D) each Permitted Acquisition shall only consist of, or be
financed with (I) cash and Permitted Investments of the Borrower and its
Subsidiaries, (II) the proceeds of Equity Interests of Holdings, (III)
Incremental Term Loans and (IV) Indebtedness incurred under
Section 6.1(c), (g), (h), (i), (n) and (s) (or any Refinancing
Indebtedness thereof), and (iv) the Borrower shall comply, and shall cause the
Acquired Entity to comply, with the applicable provisions of Section 5.9
and the Security Documents (any acquisition of an Acquired Entity meeting all
the criteria of this Section 6.4(g) being referred to herein as a “Permitted
Acquisition”);

 

(h)                                 the Borrower and its
Subsidiaries may acquire and hold receivables owing to it, if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms (including the dating of receivables) of
the Borrower or such Subsidiary;

 

(i)                                     Holdings may
acquire and hold obligations of one or more officers or other employees of
Holdings or its subsidiaries in connection with such officers’ or employees’
acquisition of Equity Interests of Holdings;

 

(j)                                     the Borrower and
its Subsidiaries may acquire and hold non-cash consideration issued by the
purchaser of assets in connection with a sale of such assets to the extent permitted
by Section 6.5;

 

(k)                                  investments, loans
and advances existing on the date hereof and set forth in Schedule 6.4;
and

 

(l)                                     investments by the
Borrower or any Subsidiary in joint ventures or similar arrangements in an
aggregate amount at any time outstanding not to exceed $5,000,000;

 

(m)                               in addition to
investments permitted by paragraphs (a) through (l) above, additional
investments, loans and advances by the Borrower and the Subsidiaries so long as
the aggregate amount invested, loaned or advanced pursuant to this paragraph
(m) (determined without regard to any write-downs or write-offs of such
investments, loans and advances but taking into account repayments,
redemptions, return of capital etc.) does not exceed (i) $75,000,000 in the
aggregate at any one time outstanding or (ii) $35,000,000 in the aggregate at
any one time outstanding with respect to investments in foreign joint ventures
or similar arrangements (provided, that clause (ii) above shall not
limit investments in Foreign Subsidiaries).

 

                SECTION 6.5.  Mergers,
Consolidations, Sales of Assets and Acquisitions.  (a) 
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 the assets (whether now owned or hereafter acquired) of
the Borrower or less than all the Equity Interests of any Subsidiary, or
purchase, lease or otherwise acquire (in one transaction or a series of
transactions) all or any substantial part of the assets of any other person,
except that (i) the Borrower and any Subsidiary may purchase and sell
inventory, materials and equipment in the ordinary course of business and may
license intellectual property in the ordinary course of business and (ii) if at
the time thereof and immediately after giving effect thereto no Event of
Default or Default shall have occurred and be continuing (u) any Subsidiary may
change its form of organization in compliance with Section 5.6(a), if
applicable, (v) any Person may make investments and advances permitted by
Section 6.4, (w) any wholly owned Subsidiary may merge into the Borrower
in a transaction in which the Borrower is the surviving corporation, (x) any

 

69

 

wholly
owned Subsidiary may merge into or consolidate with any other wholly owned
Subsidiary in a transaction in which the surviving entity is a wholly owned
Subsidiary and no person other than the Borrower, a wholly owned Subsidiary or
the De Minimis Holders receives any consideration (provided, that if any
party to any such transaction is a Loan Party, the surviving entity of such
transaction shall be a Loan Party), (y) the Borrower and the Subsidiaries may make
Permitted Acquisitions and (z) any Subsidiary of the Borrower may merge with
another person in a transaction constituting an Asset Sale permitted hereunder.

 

(b)                                 Engage in any Asset Sale otherwise permitted
under paragraph (a) above unless (i) such Asset Sale is for consideration at
least 75% of which is cash (other than in the case of a like-kind exchange or
trade-in of one asset for another asset used or useful in the business of the
Borrower and its Subsidiaries), (ii) such consideration is at least equal to
the fair market value of the assets being sold, transferred, leased or disposed
of and (iii) other than in the case of the sale of one or more parcels of real
property in connection with the relocation of the operations of the Borrower or
any Subsidiary, the fair market value of all assets sold, transferred, leased
or disposed of pursuant to this paragraph (b) shall not exceed $35,000,000 in
any fiscal year.

 

                SECTION 6.6.  Restricted
Payments; Restrictive Agreements.  (a)  Declare or make, or
agree to declare or make, directly or indirectly, any Restricted Payment
(including pursuant to any Synthetic Purchase Agreement but excluding any
Restricted Payment made to consummate the Transactions), or incur any
obligation (contingent (unless the contingency is the repayment of the
Obligations or receipt of consent from the requisite lenders under this
Agreement) or otherwise) to do so; provided, however, that:

 

(i) any Subsidiary may declare and pay dividends or make other
distributions ratably to its equity holders;

 

(ii) so long as no Event of Default or Default shall have occurred and
be continuing or would result therefrom, Holdings may (and the Borrower may
make distributions to Holdings to enable Holdings to repurchase or make
distributions to Parent to enable it to) repurchase Equity Interests of
Holdings or Parent owned by employees of Holdings or Parent, the Borrower or
the Subsidiaries or make payments to employees of Holdings or Parent, the
Borrower or the Subsidiaries upon termination of employment of such employees
(including as a result of retirement or severance) in connection with the
exercise of stock options, stock appreciation rights or similar equity
incentives or equity based incentives pursuant to management incentive plans or
in connection with the death or disability of such employees in an aggregate
amount not to exceed $5,000,000 in any fiscal year (it being agreed that (A)
any amount not utilized in any fiscal year may be carried forward and utilized
in any subsequent fiscal year, (B) such amount shall be increased by the amount
of cash proceeds received by Holdings from the sale of Equity Interests of
Holdings or Parent to such employees after the Closing Date to the extent such
proceeds are contributed directly or indirectly to the Borrower as common
equity and (C) any proceeds of key man life insurance actually received by the
Borrower or Holdings may be used or distributed by the Borrower or Holdings for
purposes of such repurchases without regard to such amount);

 

(iii) so long as no Event of Default under clause (b) or (c) of
Article VII shall have occurred and be continuing, the Borrower may pay
dividends to Holdings to permit Holdings to pay management fees in an aggregate
amount not to exceed $3,000,000 per fiscal year; provided, that (a) any
such amount referred to above, if not so expended in the fiscal year for which
it is permitted, may be carried over for expenditure in the next two succeeding
fiscal years and (b) management fees paid pursuant to this clause (iii) during
any fiscal year shall be deemed made, first, in respect of amounts
carried over from the fiscal year two years prior thereto pursuant to

 

70

 

clause
(a) above, second, in respect of amounts carried over from the
immediately prior fiscal year pursuant to clause (a) above, and, third,
in respect of amounts permitted for such fiscal year as provided above;

 

(iv) the Borrower and Holdings may make Restricted Payments to Holdings
and/or Parent  (x) the proceeds of which
shall be applied by Holdings and/or Parent to pay out of pocket general
corporate and overhead expenses incurred by Holdings and/or Parent not to
exceed $5,000,000 during any fiscal year of the Borrower and (y) in the form of
Tax Payments, to the extent directly attributable to (or arising as a result
of) the operations of the Borrower and the Subsidiaries; provided, however,
that (A) the amount of such dividends shall not exceed the amount that the
Borrower and the Subsidiaries would be required to pay in respect of Federal,
State and local taxes were the Borrower and the Subsidiaries to pay such taxes
as stand-alone taxpayers, (B) all Restricted Payments made to Holdings and/or
Parent pursuant to this clause (iv) are used by Holdings and/or Parent for the
purposes specified herein within 20 days of the receipt thereof and (C) in the
case of any Restricted Payment made to Holdings pursuant to this clause (iv),
Holdings owns, beneficially and of record, 100% of the issued and outstanding
Equity Interests of the Borrower at the time of such Restricted Payment;

 

(v) in addition to the foregoing Restricted Payments and so long as no
Default or Event of Default shall have occurred and be continuing or would
result therefrom, the Borrower may make additional Restricted Payments to
Holdings the proceeds of which may be utilized by Holdings to make additional
Restricted Payments, in an aggregate amount not to exceed 100% of Cumulative
Excess Cash Flow that is Not Otherwise Applied if the Leverage Ratio as of the
last day of the immediately preceding four fiscal quarters (after giving pro
forma effect to such additional Restricted Payments) was less than 3.25 to
1.00;

 

(vi) Holdings may make Restricted Payments in any fiscal year to the
extent made with the proceeds of an incurrence of Indebtedness or equity
issuance (so long as such equity issuance is to any person other than a Loan
Party) permitted hereunder; and

 

(vii) Holdings, the Borrower and its Subsidiaries may make additional
Restricted Payments not in excess of $10,000,000 in the aggregate so long as no
Default or Event of Default shall have occurred and be continuing or would
result therefrom.

 

Notwithstanding
the foregoing, in the event that the failure to comply with any Financial
Performance Covenant is cured through the exercise of the Cure Right set forth
in Article VII, Section 6.6(a)(iii), (v) (vi) and (vii) above shall
only be available to the Loan Parties if (x) the Required Lenders consent to
the relevant Restricted Payment pursuant to Section 6.6(a)(iii), (v), (vi)
or (vii) or (y) the Borrower is in compliance with all Financial Performance
Covenants for the end of any two consecutive fiscal quarters following the
fiscal quarter in which the Borrower exercised its Cure Right.

 

(b)                                 Enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (i) the ability of Holdings, the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets to
secure the Obligations or (ii) the ability of any Subsidiary to pay dividends
or other distributions with respect to any of its Equity Interests or to make
or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided,
that (A) the foregoing shall not apply to restrictions and conditions imposed
by law or by any Loan Document or the Senior Subordinated Note Indenture, (B)
the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of stock or assets of a Subsidiary
pending such sale, provided, such restrictions and conditions apply only
to the Subsidiary that is to be sold and such sale is permitted

 

71

 

hereunder, (C) clause (i) 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, (D) clause (i) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof and
(E) clause (i) and (ii) of the foregoing shall not apply to restrictions and
conditions imposed (1) under debt agreements of Foreign Subsidiaries incurred
under Section 6.1(h) and Section 6.1(n) or (2) under contracts with
customers entered into the ordinary course of business that contain
restrictions on cash or other deposits or net worth.

 

                SECTION 6.7.  Transactions
with Affiliates.  Except
for transactions by or among Loan Parties, sell or transfer any property or
assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except that (a)
the Borrower or any Subsidiary may engage in any of the foregoing transactions
at prices and on terms and conditions not less favorable to the Borrower or
such Subsidiary than could be obtained on an arm’s-length basis from unrelated
third parties, (b) dividends and purchases may be paid and effected to the
extent provided in Section 6.6, (c) the Loan Parties may perform their
respective obligations under the terms of the Tax Sharing Agreement or any other
agreement with any of its Affiliates in effect on the Closing Date and set
forth on Schedule 6.7, or any amendments thereto that do not materially
increase the Loan Parties’ obligations thereunder, (d) reasonable fees and
compensation may be paid to, and indemnities may be provided on behalf of,
officers, directors and employees of, and consultants (other than the Sponsor)
to, Holdings, the Borrower and the Subsidiaries, as determined by the Board of
Directors or appropriate officers of the Borrower in good faith, (e) securities
may be issued and other payments, awards or grants (in cash, equity securities
or otherwise) may be made pursuant to, or with respect to the funding of,
employment arrangements, stock options and stock ownership plans approved by the
Board of Directors of the Borrower in good faith,  (f) the Loan Parties may perform their respective obligations
under the terms of any registration rights agreement, (g) loans, investments
and advances may be made to the extent permitted by Sections 6.1 and 6.4, (h)
Restricted Payments permitted to be made pursuant to Section 6.6, (i)
equity securities may be sold, (j) fees may be paid to the Sponsor in respect
of any acquisitions or dispositions with respect to which the Sponsor acts as
an adviser to Holdings, the Borrower or any Subsidiary in an amount not to
exceed 1% of the value of such transaction.

 

                SECTION 6.8.  Business
of Holdings, Borrower and Subsidiaries.  (a) 
With respect to Holdings, engage in any business activities or have any
assets or liabilities other than (i) its ownership of the Equity Interests of
the Borrower and liabilities incidental thereto, including its liabilities
hereunder and pursuant to the Guarantee and Collateral Agreement and (ii)
Indebtedness permitted under Section 6.1.

 

(b)                                 With respect to the Borrower and its
Subsidiaries, engage at any time in any business or business activity other
than the business currently conducted by them and business activities that
constitute a reasonable extension, development or expansion thereof (including
engaging in engineered components businesses not within the aerospace industry)
reasonably incidental thereto.

 

                SECTION 6.9.  Other
Indebtedness; Material Agreements.  (a)  Permit any
supplement, modification or amendment of any joint venture or similar agreement
or any indenture, instrument or agreement pursuant to which any Material
Indebtedness of Holdings, the Borrower or any of the Subsidiaries is
outstanding if the effect of such supplement, modification or amendment as a
whole would materially increase the obligations (including, without limitation,
the pricing thereof) of the obligor or confer additional material rights on the
holder of such Indebtedness (or the counterparty to the joint venture or
similar agreement, as applicable) in a manner that would be, or could
reasonably be expected to be, materially detrimental to the Borrower or  materially adverse to the interests of the
Lenders, as determined in good faith by the Borrower.

 

72

 

(b)                                 (i) Make any distribution, whether in cash,
property, securities or a combination thereof in excess of $15,000,000 in the
aggregate during the term of this Agreement, other than regular scheduled
payments of principal and interest as and when due (to the extent not
prohibited by applicable subordination provisions), in respect of, or pay, or
offer or commit to pay, or directly or indirectly (including pursuant to any
Synthetic Purchase Agreement) redeem, repurchase, retire or otherwise acquire for
consideration, or set apart any sum for the aforesaid purposes, any
subordinated Indebtedness (provided, however,
that the foregoing shall not prohibit any refinancings of Indebtedness in
accordance with Section 6.1(l) or the conversion of any such Indebtedness
into equity securities) or (ii) pay in cash any amount in respect of any
Indebtedness or preferred Equity Interests that may at the obligor’s option be
paid in kind or in other securities.

 

                SECTION 6.10.  Capital
Expenditures.  (j)  Permit the aggregate amount of Capital
Expenditures made by the Borrower and the Subsidiaries in any fiscal year of
the Borrower to exceed the sum of (i) the amount set forth below for such
fiscal year as the “Capital Expenditure Base Amount” for such year, and (ii) the
Acquired CapEx Amount:

 

	
  Fiscal Year Ended

  	
   

  	
  Capital
  Expenditure Base Amount

  	
   

  
	
  January 1, 2005

  	
   

  	
  $45,000,000

  	
   

  
	
  December 31, 2005

  	
   

  	
  $45,000,000

  	
   

  
	
  December 30, 2006

  	
   

  	
  $45,000,000

  	
   

  
	
  December 29, 2007

  	
   

  	
  $45,000,000

  	
   

  
	
  January 3, 2009

  	
   

  	
  $45,000,000

  	
   

  
	
  January 2, 2010

  	
   

  	
  $45,000,000

  	
   

  
	
  January 1, 2011

  	
   

  	
  $45,000,000

  	
   

  
	
  December 31, 2011

  	
   

  	
  $45,000,000

  	
   

  

 

For
purposes of this Section 6.10, the “Acquired CapEx Amount”, with
respect to any Acquired Entity, shall equal the product of (x) the aggregate
amount of Capital Expenditures made by the Acquired Entity in the two fiscal
years prior to the date of the Permitted Acquisition and (y) 0.50.

 

(b)                                 The amount of permitted Capital Expenditures
set forth in paragraph (a) above (as adjusted in accordance with the terms
thereof) in respect of any fiscal year commencing with the fiscal year ending
on January 1, 2005, shall be increased (but not decreased) by the amount
of unused permitted Capital Expenditures for the two immediately preceding
fiscal years; provided, that Capital Expenditures made pursuant to this
Section during any fiscal year shall be deemed made, first, in
respect of amounts carried over from the fiscal year two years prior thereto
pursuant to the preceding sentence, second, in respect of amounts
carried over from the immediately prior fiscal year pursuant to the preceding
sentence, and, third, in respect of amounts permitted for such fiscal
year as provided above.

 

                SECTION 6.11.  Interest
Coverage Ratio.  Permit
the Interest Coverage Ratio for any period of four consecutive fiscal quarters,
in each case taken as one accounting period, ending on a date or during any
period set forth below to be less than the ratio set forth opposite such date
or period below:

 

73

 

	
  Date or Period

  	
   

  	
  Ratio

  	
   

  
	
  October 2, 2004 through July 1,
  2006

  	
   

  	
  2.25 to 1.00

  	
   

  
	
  September 30, 2006 through
  January 3, 2009

  	
   

  	
  2.50 to 1.00

  	
   

  
	
  April 4, 2009 through January 2,
  2010

  	
   

  	
  2.75 to 1.00

  	
   

  
	
  April 3, 2010 and each fiscal quarter
  thereafter

  	
   

  	
  3.00 to 1.00

  	
   

  

 

                SECTION 6.12.  Maximum
Leverage Ratio.  Permit
the Leverage Ratio at the end of any fiscal quarter ending on a date or during
a period set forth below to be greater than the ratio set forth opposite such
date or period below.

 

	
  Date or Period

  	
   

  	
  Ratio

  	
   

  
	
  October 2, 2004 through July 2,
  2005

  	
   

  	
  6.25 to 1.00

  	
   

  
	
  October 1, 2005

  	
   

  	
  6.00 to 1.00

  	
   

  
	
  December 31, 2005 through July 1,
  2006

  	
   

  	
  5.75 to 1.00

  	
   

  
	
  September 30, 2006 through
  December 30, 2006

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  March 31, 2007 through June 30,
  2007

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  September 29, 2007

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  December 29, 2007 through
  March 29, 2008

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  June 28, 2008 through
  September 27, 2008

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  January 3, 2009 through
  October 3, 2009

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  January 2, 2010 and each fiscal
  quarter thereafter

  	
   

  	
  4.00 to 1.00

  	
   

  

 

                SECTION 6.13.  Fiscal
Year.  With respect to
Holdings and the Borrower, change their fiscal year-end to a date other than
the end of the 52 or 53-week period ending the Saturday nearest to
December 31.

 

                SECTION 6.14.  Amendments
to Acquisition Documentation. 
(a)  Amend, supplement or
otherwise modify (pursuant to a waiver or otherwise) the terms and conditions
of the indemnities and licenses furnished to the Borrower or any of its
Subsidiaries pursuant to the Acquisition Documentation such that after giving
effect thereto such indemnities or licenses shall be materially less favorable
to the interests of the Loan Parties or the Lenders with respect thereto or (b)
otherwise amend, supplement or otherwise modify the terms and conditions of the
Acquisition Documentation or any such other documents except for any such
amendment, supplement or modification that (i) becomes effective after the
Closing Date and (ii) could not reasonably be expected to have a Material
Adverse Effect.

 

74

 

ARTICLE VII

 

Events of Default

 

In
case of the happening of any of the following events (“Events of Default”):

 

(a)                                  any representation or warranty made or deemed
made in or in connection with any Loan Document or the borrowings or issuances
of Letters of Credit hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or other
instrument furnished in connection with or pursuant to any Loan Document, shall
prove to have been false or misleading in any material respect when so made,
deemed made or furnished;

 

(b)                                 default shall be made in the payment of any
principal of any Loan or the reimbursement with respect to any L/C 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 by acceleration thereof or
otherwise;

 

(c)                                  default shall be made in the payment of any
interest on any Loan or L/C Disbursement or of any Fee or any other amount
(other than an amount referred to in (b) above) due under any Loan Document,
when and as the same shall become due and payable, and such default shall
continue unremedied for a period of three Business Days;

 

(d)                                 default shall be made in the due observance
or performance by Holdings, the Borrower or any Subsidiary of any covenant,
condition or agreement contained in Section 5.1(a), 5.5(a) or in
Article VI;

 

(e)                                  default shall be made in the due observance
or performance by Holdings, the Borrower or any Subsidiary of any covenant,
condition or agreement contained in any Loan Document (other than those
specified in (b), (c) or (d) above) and such default shall continue unremedied
for a period of 30 days after notice thereof from the Administrative Agent or
any Lender to the Borrower;

 

(f)                                    (i) 
Holdings, the Borrower or any Material Subsidiary shall fail to pay any
principal or interest, regardless of amount, due in respect of any Material
Indebtedness, when and as the same shall become due and payable, or (ii) any
other 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 (ii) 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;

 

(g)                                 an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of Holdings, the Borrower or any Material
Subsidiary, or of a substantial part of the property or assets of Holdings, the
Borrower or a Material Subsidiary, under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
Holdings, the Borrower or any Material Subsidiary or for a substantial part of
the property or assets of Holdings, the Borrower or a Subsidiary or (iii) the
winding-up or liquidation of Holdings, the Borrower or any Material Subsidiary;
and 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;

 

75

 

(h)                                 Holdings, the Borrower or any Material
Subsidiary shall (i) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or the
filing of any petition described in (g) above, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Holdings, the Borrower or any Material Subsidiary or for a
substantial part of the property or assets of Holdings, the Borrower or any
Material Subsidiary, (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, (vi) become unable, admit in writing
its inability or fail generally to pay its debts as they become due or (vii)
take any action for the purpose of effecting any of the foregoing;

 

(i)                                     one or more judgments for the payment of
money in an aggregate amount in excess of $10,000,000 (net of amounts covered
by independent third party insurance as to which the insurer has been notified
of such judgment or order and does not deny coverage and of amounts covered by
an indemnity from a Person that, in the reasonable judgment of the
Administrative Agent, is creditworthy) from a party  shall be rendered against Holdings, the Borrower, any Material
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 levy upon assets or properties of Holdings, the Borrower or any Material
Subsidiary to enforce any such judgment;

 

(j)                                     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 Borrower and its ERISA Affiliates in an aggregate amount exceeding
$10,000,000;

 

(k)                                  any Guarantee under the Guarantee and
Collateral Agreement for any reason shall cease to be in full force and effect
(other than in accordance with its terms), or any Guarantor shall deny in
writing that it has any further liability under the Guarantee and Collateral
Agreement (other than as a result of the discharge of such Guarantor in
accordance with the terms of the Loan Documents);

 

(l)                                     any security interest in any material item of
Collateral  purported to be created by any Security
Document shall cease to be, or shall be asserted by the Borrower or any other
Loan Party not to be, a valid, perfected, first priority (except as otherwise
expressly provided in this Agreement or such Security Document) security
interest in the securities, assets or properties covered thereby, except to the
extent that any such loss of perfection or priority results from the failure of
the Administrative Agent to maintain possession of certificates representing
securities pledged under the Pledge Agreement and except to the extent that
such loss is covered by a lender’s title insurance policy and the related
insurer shall not have denied or disclaimed in writing that such loss is
covered by such title insurance policy;

 

(m)                               the Indebtedness under the Senior
Subordinated Notes or any Guarantees thereof shall cease, for any reason, to be
validly subordinated to the Obligations, as provided in the Senior Subordinated
Note Indenture, or any Loan Party or any Affiliate of any Loan Party shall so
assert; or

 

(n)                                 there shall have occurred a Change in
Control;

 

then,
and in every such event (other than an event with respect to Holdings or the
Borrower described in paragraph (g) or (h) (i) - (v) above), 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 Borrower,
take either or both of the following actions, at the same or different
times:  (i) terminate forthwith the
Commitments and (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in 

 

76

 

part,
whereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrower, anything contained herein or in any other Loan Document
to the contrary notwithstanding; and in any event with respect to Holdings or
the Borrower described in paragraph (g) or (h) (i) - (v) above, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all
other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other
Loan Document to the contrary notwithstanding.

 

Notwithstanding
anything to the contrary contained in this Article VII, in the event that
the Borrower would otherwise fail to comply with the requirements of Sections
6.11 or 6.12 (each, a “Financial Performance Covenant”) at the end of
any fiscal quarter, at any time within ten days after the date on which a
Compliance Certificate must be delivered for the end of such fiscal quarter or
fiscal year, as applicable, Holdings shall have the right, exercisable at any time
during the term of this Agreement (provided that it may not be exercised with
respect to more than two fiscal quarters during any consecutive four fiscal
quarter period), to issue Permitted Cure Securities (as defined below) for cash
or otherwise receive cash contributions to the capital of Holdings, and to
contribute any such cash to the capital of Borrower (the “Cure Right”),
and upon the receipt by Borrower of such cash (the “Cure Amount”)
pursuant to the exercise by Holdings of such Cure Right, the Financial
Performance Covenants shall be recalculated giving effect to the following pro
forma adjustments:

 

(i)                     Consolidated EBITDA shall be increased solely for the purpose of
measuring the Financial Performance Covenants and not for any other purpose under
this Agreement, by an amount equal to the Cure Amount; and

 

(ii)                  if,
after giving effect to the foregoing recalculations, the Borrower shall then be
in compliance with the requirements of all Financial Performance Covenants, the
Borrower shall be deemed to have satisfied the requirements of the Financial
Performance Covenants as of the relevant date of determination with the same
effect as though there had been no failure to comply therewith at such date,
and the applicable breach or default of any such Financial Performance Covenant
that would have otherwise occurred on such date but for the application of the
foregoing recalculations shall be deemed not to have occurred.

 

As
used in this Article VII, the term “Permitted Cure Securities”
shall mean an equity security of Holdings having no mandatory redemption,
repurchase, repayment or similar requirements prior to the six-month
anniversary of the Term Loan Maturity Date and upon which all dividends or
distributions, at the election of Holdings, may be payable in additional shares
of such equity security.

 

ARTICLE VIII

 

The Agents

 

                SECTION
8.1.  Appointment. 
Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto.

 

77

 

Notwithstanding
any provision to the contrary elsewhere in this Agreement, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent.

 

                SECTION 8.2.  Delegation
of Duties.  The
Administrative Agent may execute any of its duties under this Agreement and the
other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties.  The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.

 

                SECTION 8.3.  Exculpatory
Provisions.  Neither any
Agent nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or any other Loan Document (except to the extent that any of the
foregoing are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from its or such Person’s own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Loan Party or any officer thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agents under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of any Loan Party a
party thereto to perform its obligations hereunder or thereunder.  The Agents shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any Loan
Party.

 

                SECTION 8.4.  Reliance
by Administrative Agent. 
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including counsel to
Holdings or the Borrower), independent accountants and other experts selected
by the Administrative Agent.  The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.

 

                SECTION 8.5.  Notice
of Default.  The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Administrative Agent
has received notice from a Lender, Holdings or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”.  In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders.  The

 

78

 

Administrative
Agent shall take such action with respect to such Default or Event of Default
as shall be reasonably directed by the Required Lenders (or, if so specified by
this Agreement, all Lenders); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.

 

                SECTION
8.6.  Non-Reliance on Agents and Other Lenders.  Each Lender expressly acknowledges that
neither the Agents nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates have made any representations or
warranties to it and that no act by any Agent hereafter taken, including any
review of the affairs of a Loan Party or any affiliate of a Loan Party, shall
be deemed to constitute any representation or warranty by any Agent to any
Lender.  Each Lender represents to the
Agents that it has, independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. 
Each Lender also represents that it will, independently and without
reliance upon any Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their affiliates.  Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by the Administrative Agent hereunder, the Administrative Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of any Loan Party or any affiliate
of a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.

 

                SECTION 8.7.  Indemnification.  The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by Holdings or the Borrower
and without limiting the obligation of Holdings or the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent’s gross negligence or willful misconduct.  The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.

 

                SECTION 8.8.  Agent
in Its Individual Capacity. 
Each Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though such
Agent were not an Agent.  With respect
to its Loans made or renewed by it and with respect to any Letter of Credit
issued or participated in by it, each Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Agent, and the terms “Lender” and
“Lenders” shall include each Agent in its individual capacity.

 

79

 

                SECTION 8.9.  Successor
Administrative Agent. 
The Administrative Agent may resign as Administrative Agent upon 10
days’ notice to the Lenders and the Borrower. 
If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 7(b), (c),
(g) or (h) with respect to the Borrower shall have occurred and be continuing)
be subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
“Administrative Agent” shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans.  If no successor agent has accepted
appointment as Administrative Agent by the date that is 10 days following a
retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become effective,
and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.  After any retiring Administrative Agent’s resignation as Administrative
Agent, the provisions of this Section 8 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement and the other Loan Documents.

 

                SECTION 8.10.  Co-Documentation
Agents and Syndication Agent. 
Neither the Co-Documentation Agents nor the Syndication Agent shall have
any duties or responsibilities hereunder in its capacity as such.

 

ARTICLE IX

 

Miscellaneous

 

                SECTION 9.1.  Notices.  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:

 

(a)                                  if to the Borrower or Holdings, to it at
13800 South Lakes Drive, Charlotte, NC 
28273, Attention: Lynn Amos, Fax No. (704) 587-8722, with a copy to
Warburg Pincus, 466 Lexington Avenue, New York, NY 10017, Attention: Jamie
Dimitri, Fax No. (212) 922-0933;

 

(b)                                 if to the Administrative Agent or the
Swingline Lender, to JPMorgan Chase Bank, Loan and Agency Services Group, 1111
Fannin, 10th Floor, Houston, TX, 77002 Attention: James DeLeon, Fax
No. (713) 750-2666, with a copy to JPMorgan Chase Bank, 270 Park Avenue, New
York, NY, 10017, Attention: Peter Dedousis, Fax No. (212) 270-5100;

 

(c)                                  if to the Funding Office with respect to
Alternative Currcncy Loans, to J.P. Morgan Europe Ltd., 125 London Wall,
London, England EC2A 5YJ, Attention: Loans Agency (Nichola Hall/Caroline
Walsh), Fax No. 44-207-777-2542/2360; and

 

(d)                                 if to a Lender, to it at its address (or fax
number) set forth on Schedule 2.1 or in the Assignment and Assumption
pursuant to which such Lender shall have become a party 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 if delivered by hand or overnight courier service or sent by fax or
on the date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in

 

80

 

this
Section 9.1 or in accordance with the latest unrevoked direction from such
party given in accordance with this Section 9.1.  As agreed to among the Borrower, the Administrative Agent, the
Swingline Lender and the applicable Lenders from time to time, notices and
other communications may also be delivered by e-mail to the e-mail address of a
representative of the applicable person provided from time to time by such
person.

 

               SECTION 9.2.  Survival
of Agreement.  All
covenants, agreements, representations and warranties made by the Borrower or
Holdings herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and the
Issuing Bank and shall survive the making by the Lenders of the Loans and the
issuance of Letters of Credit by the Issuing Bank, regardless of any
investigation made by the Lenders or the Issuing Bank or on their behalf, 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 or any other Loan Document is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not been
terminated.  The provisions of Sections
2.14, 2.15, 2.19 and 9.5 shall remain operative and in full force and effect
regardless of the expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or
any other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, any Lender or the Issuing Bank.

 

                SECTION 9.3.  Binding
Effect.  This Agreement
shall become effective when it shall have been executed by the Borrower,
Holdings and 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.

 

                SECTION 9.4.  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 Bank that issues any Letter of Credit),
except that (i) the 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 the 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.

 

(b)                                 (i) 
Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees (each, an “Assignee”) all or
a portion of its rights and obligations under this Agreement (including all or
a portion of its Commitments 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 (as defined below) or, if an
Event of Default has occurred and is continuing, any other Person;

 

(B)  the Administrative Agent, provided
that no consent of the Administrative Agent shall be required for an assignment
of all or any portion of a Term Loan to a Lender, an Affiliate of a Lender or
an Approved Fund; and

 

(C)  the Issuing Bank, provided
that no consent of the Issuing Bank shall be required for an assignment of all
or any portion of a Term Loan.

 

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

 

81

 

(A)  except in the case of an
assignment to a Lender, an affiliate of a Lender or an Approved Fund or an
assignment of the entire remaining amount of the assigning Lender’s Commitments
or Loans under any Facility, the amount of the Commitments 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 $5,000,000 (or, in the case of (x)
US$ Term Loans and Incremental Term Loans, $1,000,000 or (y) Euro Term Loans,
€1,000,000) unless each of the Borrower and the Administrative Agent otherwise
consent, provided that (1) no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing and (2) such
amounts shall be aggregated in respect of each Lender and its affiliates or
Approved Funds, if any;

 

(B)  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; and

 

(C)  the Assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an administrative
questionnaire.

 

For
the purposes of this Section 9.4, “Approved Fund” means any Person
(other than a natural person) 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) below, 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 Sections 2.14, 2.15, 2.19 and 9.5).  Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 9.4 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c)
of this Section.

 

(iv)  The Administrative Agent, acting for this
purpose as an agent of the Borrower, 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 Commitments of,
and principal amount of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Bank 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.

 

(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.

 

82

 

(c)                                  (i) 
Any Lender may, without the consent of the Borrower or the
Administrative Agent, 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
Commitments 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
Bank 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 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 may provide that such Lender will not, without the consent of
the Participant, agree to any amendment, modification or waiver that (1)
requires the consent of each Lender directly affected thereby pursuant to
Section 9.8(b) and (2) directly affects such Participant.  Subject to paragraph (c)(ii) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15 and 2.19 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 2.17 as though it were a Lender, provided such Participant
shall be subject to Section 9.6 as though it were a Lender.

 

(ii)  A Participant shall not be entitled to
receive any greater payment under Section 2.14 or 2.19 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent.  Any Participant that is a Non-U.S. Lender
shall not be entitled to the benefits of Section 2.19 unless such
Participant complies with Section 2.19(e).

 

(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 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.

 

(e)                                  Notwithstanding the foregoing, any Conduit
Lender may assign any or all of the Loans it may have funded hereunder to its
designating Lender without the consent of the Borrower or the Administrative
Agent and without regard to the limitations set forth in
Section 9.4(b).  Each of Holdings,
the Borrower, each Lender and the Administrative Agent hereby confirms that it
will not institute against a Conduit Lender or join any other Person in instituting
against a Conduit Lender any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding under any state bankruptcy or similar law,
for one year and one day after the payment in full of the latest maturing
commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify,
save and hold harmless each other party hereto for any loss, cost, damage or
expense arising out of its inability to institute such a proceeding against
such Conduit Lender during such period of forbearance.

 

                SECTION 9.5.  Expenses;
Indemnity.  (a)  The Borrower and Holdings agree, jointly and
severally, to pay all out-of-pocket expenses incurred by the Administrative
Agent, the Issuing Bank and the Swingline Lender in connection with the
syndication of the credit facilities provided for herein and the preparation
and administration of this Agreement and the other Loan Documents or in
connection with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Administrative Agent or
any Lender in connection with the enforcement or protection of its rights in
connection with this Agreement and the

 

83

 

other
Loan Documents or in connection with the Loans made or Letters of Credit issued
hereunder, including the reasonable fees, charges and disbursements of Simpson
Thacher & Bartlett LLP, counsel for the Administrative Agent, and, in
connection with any such enforcement or protection, the fees, charges and
disbursements of any other counsel for the Administrative Agent or any Lender.

 

(b)                                 The Borrower and Holdings agree, jointly and
severally, to indemnify the Administrative Agent, each Lender, the Issuing Bank
and each Related Party of any of the foregoing persons (each such person being
called an “Indemnitee”) against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or
as a result of (i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated hereby or thereby,
the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or the consummation of the Transactions and
the other transactions contemplated hereby or thereby, (ii) the use of the
proceeds of the Loans or issuance of Letters of Credit, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) any actual or alleged
presence or Release of Hazardous Materials on any property currently or
formerly owned or operated by the Borrower or any of the Subsidiaries, or any
Environmental Liability related in any way to the Borrower or the Subsidiaries;
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 Holdings and the Borrower
fail to pay any amount required to be paid by them to the Administrative Agent,
the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, the
Issuing Bank or the Swingline 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, the Issuing Bank or the Swingline 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 Aggregate Revolving Credit Exposure, outstanding Term Loans and unused
Commitments at the time.

 

(d)                                 To the extent permitted by applicable law,
neither Holdings nor the Borrower shall assert, and each 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.

 

(e)                                  The provisions of this Section 9.5 shall
remain operative and in full force and effect regardless of the expiration of
the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the Commitments,
the expiration of any Letter of Credit, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, any Lender or
the Issuing Bank.  All amounts due under
this Section 9.5 shall be payable on written demand therefor.

 

                SECTION 9.6.  Right
of Setoff.  If an Event
of Default shall have occurred and be continuing, each Lender is hereby
authorized at any time and from time to time, except to the extent prohibited
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

 

84

 

other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower or Holdings against any of and all the obligations of
the Borrower or Holdings now or hereafter existing under this Agreement and
other Loan Documents held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured.  The rights of each Lender under this
Section 9.6 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

 

                SECTION 9.7.  Applicable
Law.  THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET
FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. 
EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN
ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF
NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS MOST RECENTLY PUBLISHED AND IN EFFECT, ON THE DATE SUCH
LETTER OF CREDIT WAS ISSUED, BY THE INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM
CUSTOMS”) AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS
OF THE STATE OF NEW YORK.

 

                SECTION 9.8.  Waivers;
Amendment.  (a)  No failure or delay of the Administrative
Agent, any Lender or the Issuing Bank in exercising any power or right
hereunder or under any other Loan Document 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 Bank and the Lenders hereunder and
under the other Loan Documents 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 any other Loan
Document or consent to any departure by the Borrower or any other Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  No notice or demand on the Borrower or
Holdings in any case shall entitle the Borrower or Holdings to any other or
further notice or demand in similar or other circumstances.

 

(b)                                 Neither this Agreement nor any of the
Security Documents nor any provision hereof or thereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower, Holdings and the Required Lenders; provided, however, that (x) the Borrower,
Holdings and the Administrative Agent may enter into an amendment to effect the
provisions of Section 2.23(b) upon the effectiveness of any Incremental
Term Loan Assumption Agreement (and any such amendment shall in any event be deemed
to have occurred upon such effectiveness) and (y) no such agreement under this
Section 9.8(b) shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan or any date for reimbursement of an L/C Disbursement,
or waive or excuse any such payment or any part thereof, or decrease the rate
of interest on any Loan or L/C Disbursement, without the prior written consent
of each Lender affected thereby, (ii) increase or extend the Commitment or
decrease or extend the date for payment of any Fees of or any other amount
actually due and payable hereunder to any Lender without the prior written
consent of such Lender, (iii) amend or modify the pro rata requirements of
Section 2.16, the provisions of Section 9.4(j), the provisions of
this Section, or release any Guarantor or all or substantially all of the
Collateral, without the prior written consent of each Lender, (iv) change the
provisions of any Loan Document in a manner that by its terms adversely affects
the rights in respect of payments due to Lenders holding Loans of one Class
differently from the rights of Lenders holding Loans of any other Class without
the prior written consent of Lenders holding a majority in interest of the

 

85

 

outstanding Loans and unused
Commitments of each adversely affected Class, (v) amend, modify or waive
compliance by Holdings or the Borrower with the provisions of Section 6.11
or 6.12 (or with the provisions of Section 4.1, as it relates to an Event
of Default following a breach of any provision of this Agreement) without the
prior written consent of Revolving Lenders holding a majority in interest of
the Revolving Credit Commitments, (vii) reduce the percentage contained in the
definition of the term “Required Lenders” without the prior written consent of
each Lender (it being understood that with the consent of the Required Lenders,
additional extensions of credit pursuant to this Agreement may be included in
the determination of the Required Lenders on substantially the same basis as
the Term Loan Commitments and Revolving Credit Commitments on the date hereof)
or (viii) without the prior written consent of each Lender directly affected
thereby, amend the definition of the term “Interest Period” in any way which
would permit Interest Periods to be in excess of six months without regard to
availability to Lenders; provided, further, that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Issuing Bank or the Swingline Lender hereunder or
under any other Loan Document without the prior written consent of the
Administrative Agent, the Issuing Bank or the Swingline Lender.  Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such Lender (it
being understood that any Commitments or Loans held or deemed held by any
Defaulting Lender shall be excluded for a vote of the Lenders hereunder
requiring any consent of the Lenders).

 

                SECTION
9.9.  Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any Loan or participation in any L/C
Disbursement, together with all fees, charges and other amounts which are
treated as interest on such Loan or participation in such L/C Disbursement
under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan or
participation in accordance with applicable law, the rate of interest payable
in respect of such Loan or participation hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan or participation but were not payable as a result of the operation
of this Section 9.9 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or participations or periods
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.

 

               SECTION 9.10.  Entire
Agreement.  This
Agreement, the Fee Letter and the other Loan Documents constitute the entire
contract between the parties relative to the subject matter hereof.  Any other previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. 
Nothing in this Agreement or in the other Loan Documents, expressed or
implied, is intended to confer upon any person (other than the parties hereto
and thereto, their respective successors and assigns permitted hereunder
(including any Affiliate of the Issuing Bank that issues any Letter of Credit)
and, to the extent expressly contemplated hereby, the Related Parties of each
of the Administrative Agent, the Issuing Bank and the Lenders) any rights,
remedies, obligations or liabilities under or by reason of this Agreement or
the other Loan Documents.

 

                SECTION 9.11.  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 RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS.  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

 

86

 

ENFORCE
THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.

 

                SECTION 9.12.  Severability.  In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction).  The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

               SECTION 9.13.  Counterparts.  This Agreement may be executed in counterparts
(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, and shall become effective as provided in
Section 9.3.  Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement.

 

                SECTION
9.14.  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 are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.

 

                SECTION 9.15.  Jurisdiction;
Consent to Service of Process. 
(a)  Each of Holdings and the
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, 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 New York 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 Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or the other Loan Documents against the Borrower, Holdings or their respective
properties in the courts of any jurisdiction.

 

(b)                                 Each of Holdings and the Borrower hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which 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 or the other Loan Documents in any New York State or Federal
court.  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.

 

(c)                                  Each of Holdings and the Borrower irrevocably
consents to service of process in the manner provided for notices in
Section 9.1.  Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

 

                SECTION 9.16.  Confidentiality.  Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be

 

87

 

disclosed
(i) to its and its Affiliates’ officers, directors, 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), (ii) to the extent requested by any regulatory authority or
quasi-regulatory authority (such as the National Association of Insurance
Commissioners), (iii) to the extent required by applicable laws or regulations
or by any subpoena or similar legal process, (iv) in connection with the
exercise of any remedies hereunder or under the other Loan Documents or any
suit, action or proceeding relating to the enforcement of its rights hereunder
or thereunder, (v) subject to an agreement containing provisions substantially
the same as those of this Section 9.16, to (A) any actual or prospective
assignee or pledgee of or participant in any of its rights or obligations under
this Agreement and the other Loan Documents or (B) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating
to the Borrower or any Subsidiary or any of their respective obligations, (vi)
with the consent of the Borrower or (vii) to the extent such Information
becomes publicly available other than as a result of a breach of this
Section 9.16.  For the purposes of
this Section, “Information” shall mean all information received from the Borrower
or Holdings and related to the Borrower or Holdings or their business, other
than any such information that was available to the Administrative Agent, the
Issuing Bank or any Lender on a nonconfidential basis prior to its disclosure
by the Borrower or Holdings; provided that, in the case of Information received
from the Borrower or Holdings 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 9.16 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 its own confidential information.

 

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

 

                SECTION 9.18.  Releases
of Guarantees and Liens. 
(a) Notwithstanding anything to the contrary contained herein or in any
other Loan Document, the Administrative Agent is hereby irrevocably authorized
by each Lender (without requirement of notice to or consent of any Lender
except as expressly required by Section 9.8) to take any action requested
by the Borrower having the effect of releasing any Collateral or guarantee
obligations (i) to the extent necessary to permit consummation of any
transaction not prohibited by any Loan Document or that has been consented to in
accordance with Section 9.8 or (ii) under the circumstances described in
paragraph (b) below.

 

(b)  At such time as the Loans, the Reimbursement
Obligations and the other obligations under the Loan Documents (other than
obligations under or in respect of Hedging Agreements) shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created by the
Security Documents, and the Security Documents and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent
and each Loan Party under the Security Documents shall terminate, all without
delivery of any instrument or performance of any act by any Person.

 

                SECTION 9.19.  Judgment
Currency.  (a) The
Borrower’s obligations hereunder and under the other Loan Documents to make
payments in a specified currency (the “Obligation Currency”) shall not
be discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by the Administrative Agent or a Lender of the full amount of the
Obligation Currency expressed to be payable to the Administrative Agent or such
Lender under this Agreement or

 

88

 

the
other Loan Documents.  If, for the
purpose of obtaining or enforcing judgment against any Loan Party in any court
or in any jurisdiction, it becomes necessary to convert into or from any
currency other than the Obligation Currency (such other currency being
hereinafter referred to as the “Judgment Currency”) an amount due in the
Obligation Currency, the conversion shall be made, at the rate of exchange (as
quoted by the Administrative Agent or if the Administrative Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated by the Administrative Agent) determined, in each case, as of the
Business Day immediately preceding the date on which the judgment is given
(such Business Day being hereinafter referred to as the “Judgment Currency
Conversion Date”).

 

(b)  If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, the Borrowers covenant and agree to pay, or cause to
be paid, such additional amounts, if any (but in any event not a lesser
amount), as may be necessary to ensure that the amount paid in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.

 

(c)  For purposes of determining any rate of
exchange or currency equivalent for this Section, such amounts shall include
any premium and costs payable in connection with the purchase of the Obligation
Currency.

 

89

 

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.

 

	
   

  	
  PP
  HOLDING CORPORATION,

  
	
   

  	
   

  
	
   

  	
  by
  

  	
  /s/
  Lynn Amos

  	
   

  
	
   

  	
   

  	
  Name:
  Lynn Amos

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer, Treasurer and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PP
  ACQUISITION CORPORATION,

  
	
   

  	
   

  
	
   

  	
  by
  

  	
  /s/
  Lynn Amos

  	
   

  
	
   

  	
   

  	
  Name:
  Lynn Amos

  
	
   

  	
   

  	
  Title:
  Chief Financial Officer, Treasurer and Secretary

  

 

 

	
  The
  undersigned hereby acknowledges and agrees

  that, upon the effectiveness of the Merger, it will

  succeed by operation of law to all of the rights and

  obligations of the Borrower set forth herein and that

  all references herein to the “Borrower” shall thereupon

  be deemed to be references to the undersigned.

  
	
   

  
	
   

  
	
  POLYPORE,
  INC.

  	
   

  
	
   

  	
   

  
	
  by 

  	
  /s/
  Lynn Amos

  	
   

  
	
  Name: Lynn Amos

  
	
  Title:

  
			

 

 

	
   

  	
  JPMORGAN
  CHASE BANK, individually and as

  Administrative Agent,

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Thomas H. Kozlark

  	
   

  
	
   

  	
   

  	
  Name:
  Thomas H. Kozlark

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEAR
  STEARNS CORPORATE LENDING INC.,

  individually and as Syndication Agent, 

  
	
   

  	
   

  
	
   

  	
  by
  

  	
  /s/
  Victor Bulzacchelli

  	
   

  
	
   

  	
   

  	
  Name:
  Victor Bulzacchelli

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION,

  individually and as Co-Documentation Agent,

  
	
   

  	
   

  
	
   

  	
  by
  

  	
  /s/
  Vish Sathappan

  	
   

  
	
   

  	
   

  	
  Name:
  Vish Sathappan

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

2

 

	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC.

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  G. Andrew Keith

  	
   

  
	
   

  	
   

  	
  Name:
  G. Andrew Keith

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UBS
  LOAN FINANCE LLC

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Wilfred V. Saint

  	
   

  
	
   

  	
   

  	
  Name:
  Wilfred V. Saint

  
	
   

  	
   

  	
  Title:
  Director, Banking Products Services U.S.

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Barbara Ezell-McMichael

  	
   

  
	
   

  	
   

  	
  Name:
  Barbara Ezell-McMichael

  
	
   

  	
   

  	
  Title:  Associate Director, Banking Products
  Services U.S.

  

 

 

	
   

  	
  ING
  CAPITAL LLC  

  
	
   

  	
   

  
	
   

  	
  by
  

  	
  /s/
  Simon Clark 

  
	
   

  	
   

  	
  Name:
  Simon Clark

  
	
   

  	
   

  	
  Title:
  Managing Director  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL
  CITY BANK  

  
	
   

  	
   

  
	
   

  	
  by
  

  	
  /s/
  Gavin D. Young 

  
	
   

  	
   

  	
  Name:
  Gavin D. Young

  
	
   

  	
   

  	
  Title:
  Account Officer  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPPENHEIMER
  SENIOR FLOATING RATE FUND  

  
	
   

  	
   

  
	
   

  	
  by
  

  	
  /S/
  David Foxhoven 

  
	
   

  	
   

  	
  Name:
  David Foxhoven

  
	
   

  	
   

  	
  Title:
  A.V.P.  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KZH
  CYPRESS TREE-1 LLC  

  
	
   

  	
   

  
	
   

  	
  by
  

  	
  /s/
  Dorian Herrera 

  
	
   

  	
   

  	
  Name:
  Dorian Herrera

  
	
   

  	
   

  	
  Title:
  Authorized Agent  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KZH
  SOLEIL-2 LLC  

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Dorian Herrera

  
	
   

  	
   

  	
  Name:
  Dorian Herrera

  
	
   

  	
   

  	
  Title:
  Authorized Agent  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KZH
  STERLING LLC  

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Dorian Herrera 

  
	
   

  	
   

  	
  Name:
  Dorian Herrera

  
	
   

  	
   

  	
  Title:
  Authorized Agent  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK
  OF TOKYO-MITSUBISHI TRUST COMPANY  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Chris Droussiotis

  
	
   

  	
   

  	
  Name:
  Chris Droussiotis

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

2

 

 

 

	
   

  	
  KZH
  CRESCENT-2 LLC  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Dorian Herrera 

  
	
   

  	
   

  	
  Name:
  Dorian Herrera

  
	
   

  	
   

  	
  Title:
  Authorized Agent  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KZH
  CRESCENT-3 LLC  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Dorian Herrera

  
	
   

  	
   

  	
  Name:
  Dorian Herrera

  
	
   

  	
   

  	
  Title:
  Authorized Agent  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KZH
  SOLEIL LLC  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  Dorian Herrera 

  
	
   

  	
   

  	
  Name:
  Dorian Herrera

  
	
   

  	
   

  	
  Title:
  Authorized Agent

  

 

3

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