Document:

Exhibit 10.1

 

EXECUTION COPY

 

 

$800,000,000

 

CREDIT AGREEMENT

 

Dated as of

 

June 9, 2008,

 

among

 

SCIENTIFIC GAMES INTERNATIONAL, INC.,

as Borrower,

 

SCIENTIFIC GAMES CORPORATION,

as Holdings and a Guarantor,

 

The Several Lenders

from Time to Time Parties Hereto,

 

and

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

J.P. MORGAN SECURITIES INC.

and

BANC OF AMERICA SECURITIES LLC

as Joint Lead Arrangers and Joint Bookrunners

 

BANK OF AMERICA, N.A.

and

UBS SECURITIES LLC

as Co-Syndication Agents,

 

and

 

ING CAPITAL LLC  and

BANK OF TOKYO - MITSUBISHI UFJ TRUST COMPANY,

as Co-Documentation Agents

 

 

[CS&M No. 6701-464]

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  1.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
  1.1.

  	
  Defined
  Terms

  	
  1

  
	
   

  	
  1.2.

  	
  Other
  Definitional Provisions

  	
  33

  
	
   

  	
  1.3.

  	
  Currency
  Conversion

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  2.

  	
  AMOUNT AND
  TERMS OF TERM LOANS

  	
  34

  
	
   

  	
  2.1.

  	
  Term
  Commitments; Term Loans

  	
  34

  
	
   

  	
  2.2.

  	
  Procedure
  for Term Loan Borrowing

  	
  35

  
	
   

  	
  2.3.

  	
  Repayment of
  Term Loans

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  3.

  	
  AMOUNT AND
  TERMS OF REVOLVING COMMITMENTS

  	
  35

  
	
   

  	
  3.1.

  	
  Revolving
  Commitments

  	
  35

  
	
   

  	
  3.2.

  	
  Procedure
  for Revolving Loan Borrowing

  	
  36

  
	
   

  	
  3.3.

  	
  Swingline
  Commitment

  	
  37

  
	
   

  	
  3.4.

  	
  Procedure
  for Swingline Borrowing; Refunding of Swingline Loans

  	
  37

  
	
   

  	
  3.5.

  	
  Commitment
  Fees, etc.

  	
  39

  
	
   

  	
  3.6.

  	
  Termination
  or Reduction of Revolving Commitments

  	
  39

  
	
   

  	
  3.7.

  	
  L/C
  Commitment

  	
  39

  
	
   

  	
  3.8.

  	
  Procedure
  for Issuance of Letters of Credit

  	
  40

  
	
   

  	
  3.9.

  	
  Fees and
  Other Charges

  	
  40

  
	
   

  	
  3.10.

  	
  L/C
  Participations

  	
  41

  
	
   

  	
  3.11.

  	
  Reimbursement
  Obligation of the Borrower

  	
  42

  
	
   

  	
  3.12.

  	
  Obligations
  Absolute

  	
  43

  
	
   

  	
  3.13.

  	
  Letter of Credit
  Payments

  	
  44

  
	
   

  	
  3.14.

  	
  Applications

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  4.

  	
  GENERAL
  PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

  	
  44

  
	
   

  	
  4.1.

  	
  Optional
  Prepayments

  	
  44

  
	
   

  	
  4.2.

  	
  Mandatory
  Prepayments

  	
  45

  
	
   

  	
  4.3.

  	
  Conversion
  and Continuation Options

  	
  46

  
	
   

  	
  4.4.

  	
  Limitations
  on Eurocurrency Tranches

  	
  47

  
	
   

  	
  4.5.

  	
  Interest
  Rates and Payment Dates

  	
  47

  
	
   

  	
  4.6.

  	
  Computation
  of Interest and Fees

  	
  47

  
	
   

  	
  4.7.

  	
  Inability to
  Determine Interest Rate

  	
  48

  
	
   

  	
  4.8.

  	
  Pro Rata
  Treatment and Payments

  	
  49

  
	
   

  	
  4.9.

  	
  Requirements
  of Law

  	
  51

  
	
   

  	
  4.10.

  	
  Taxes

  	
  53

  
	
   

  	
  4.11.

  	
  Indemnity

  	
  55

  

 

i

 

	
   

  	
  4.12.

  	
  Change of
  Lending Office

  	
  55

  
	
   

  	
  4.13.

  	
  Replacement
  of Lenders

  	
  56

  
	
   

  	
  4.14.

  	
  Evidence of
  Debt

  	
  56

  
	
   

  	
  4.15.

  	
  Illegality

  	
  57

  
	
   

  	
  4.16.

  	
  Foreign
  Currency Exchange Rate

  	
  57

  
	
   

  	
  4.17.

  	
  Incremental
  Facilities

  	
  57

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  5.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  59

  
	
   

  	
  5.1.

  	
  Financial
  Condition

  	
  59

  
	
   

  	
  5.2.

  	
  No Change

  	
  59

  
	
   

  	
  5.3.

  	
  Corporate
  Existence; Compliance with Law

  	
  59

  
	
   

  	
  5.4.

  	
  Power;
  Authorization; Enforceable Obligations

  	
  59

  
	
   

  	
  5.5.

  	
  No Legal Bar

  	
  60

  
	
   

  	
  5.6.

  	
  Litigation

  	
  60

  
	
   

  	
  5.7.

  	
  No Default

  	
  60

  
	
   

  	
  5.8.

  	
  Ownership of
  Property; Liens

  	
  60

  
	
   

  	
  5.9.

  	
  Intellectual
  Property

  	
  60

  
	
   

  	
  5.10.

  	
  Taxes

  	
  61

  
	
   

  	
  5.11.

  	
  Federal
  Regulations

  	
  61

  
	
   

  	
  5.12.

  	
  Labor
  Matters

  	
  61

  
	
   

  	
  5.13.

  	
  ERISA

  	
  61

  
	
   

  	
  5.14.

  	
  Investment
  Company Act; Other Regulations

  	
  62

  
	
   

  	
  5.15.

  	
  Subsidiaries

  	
  62

  
	
   

  	
  5.16.

  	
  [Reserved]

  	
  62

  
	
   

  	
  5.17.

  	
  Environmental
  Matters

  	
  62

  
	
   

  	
  5.18.

  	
  Accuracy of
  Information, etc.

  	
  63

  
	
   

  	
  5.19.

  	
  Security
  Documents

  	
  63

  
	
   

  	
  5.20.

  	
  Solvency

  	
  64

  
	
   

  	
  5.21.

  	
  Senior
  Indebtedness

  	
  64

  
	
   

  	
  5.22.

  	
  Regulation H

  	
  64

  
	
   

  	
  5.23.

  	
  Material
  Contracts

  	
  64

  
	
   

  	
  5.24.

  	
  Insurance

  	
  65

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  6.

  	
  CONDITIONS
  PRECEDENT

  	
  65

  
	
   

  	
  6.1.

  	
  Conditions
  to Initial Extension of Credit

  	
  65

  
	
   

  	
  6.2.

  	
  Conditions
  to Each Extension of Credit

  	
  68

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  7.

  	
  AFFIRMATIVE
  COVENANTS

  	
  68

  
	
   

  	
  7.1.

  	
  Financial
  Statements

  	
  68

  
	
   

  	
  7.2.

  	
  Certificates;
  Other Information

  	
  69

  
	
   

  	
  7.3.

  	
  Payment of
  Obligations

  	
  70

  
	
   

  	
  7.4.

  	
  Maintenance
  of Existence; Compliance

  	
  70

  
	
   

  	
  7.5.

  	
  Maintenance
  of Property; Insurance

  	
  71

  
	
   

  	
  7.6.

  	
  Inspection
  of Property; Books and Records; Discussions

  	
  71

  
	
   

  	
  7.7.

  	
  Notices

  	
  71

  

 

ii

 

	
   

  	
  7.8.

  	
  Environmental
  Laws

  	
  72

  
	
   

  	
  7.9.

  	
  Additional
  Collateral, etc.

  	
  72

  
	
   

  	
  7.10.

  	
  Further
  Assurances

  	
  74

  
	
   

  	
  7.11.

  	
  Use of
  Proceeds

  	
  75

  
	
   

  	
  7.12.

  	
  [Intentionally
  Omitted.]

  	
  75

  
	
   

  	
  7.13.

  	
  [Intentionally Omitted.]

  	
  75

  
	
   

  	
  7.14.

  	
  Lease
  Amendment

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  8.

  	
  NEGATIVE
  COVENANTS

  	
  75

  
	
   

  	
  8.1.

  	
  Financial
  Condition Covenants

  	
  75

  
	
   

  	
  8.2.

  	
  Indebtedness

  	
  76

  
	
   

  	
  8.3.

  	
  Liens

  	
  78

  
	
   

  	
  8.4.

  	
  Fundamental
  Changes

  	
  80

  
	
   

  	
  8.5.

  	
  Disposition
  of Property

  	
  81

  
	
   

  	
  8.6.

  	
  Restricted
  Payments

  	
  81

  
	
   

  	
  8.7.

  	
  Payment
  Blockage Notice

  	
  83

  
	
   

  	
  8.8.

  	
  Investments

  	
  83

  
	
   

  	
  8.9.

  	
  Payments and
  Modifications of Certain Debt Instruments

  	
  85

  
	
   

  	
  8.10.

  	
  Transactions
  with Affiliates

  	
  85

  
	
   

  	
  8.11.

  	
  Sales and
  Leasebacks

  	
  86

  
	
   

  	
  8.12.

  	
  Changes in
  Fiscal Periods

  	
  86

  
	
   

  	
  8.13.

  	
  Negative
  Pledge Clauses

  	
  86

  
	
   

  	
  8.14.

  	
  Clauses
  Restricting Subsidiary Distributions

  	
  87

  
	
   

  	
  8.15.

  	
  Lines of
  Business

  	
  87

  
	
   

  	
  8.16.

  	
  Hedge
  Agreements

  	
  87

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  9.

  	
  EVENTS OF
  DEFAULT

  	
  87

  
	
   

  	
   

  	
   

  	
   

  
	
  Section

  	
  10.

  	
  THE AGENTS

  	
  91

  
	
   

  	
  10.1.

  	
  Appointment

  	
  91

  
	
   

  	
  10.2.

  	
  Delegation
  of Duties

  	
  91

  
	
   

  	
  10.3.

  	
  Exculpatory
  Provisions

  	
  91

  
	
   

  	
  10.4.

  	
  Reliance by
  Agents

  	
  92

  
	
   

  	
  10.5.

  	
  Notice of Default

  	
  92

  
	
   

  	
  10.6.

  	
  Non-Reliance
  on Agents and Other Lenders

  	
  92

  
	
   

  	
  10.7.

  	
  Indemnification

  	
  93

  
	
   

  	
  10.8.

  	
  Agent in Its
  Individual Capacity

  	
  93

  
	
   

  	
  10.9.

  	
  Successor
  Administrative Agent

  	
  94

  
	
   

  	
  10.10.

  	
  Agents
  Generally

  	
  94

  
	
   

  	
  10.11.

  	
  Lead
  Arrangers and Syndication Agents

  	
  94

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 

  	
  11.

  	
  MISCELLANEOUS

  	
  94

  
	
   

  	
  11.1.

  	
  Amendments
  and Waivers

  	
  94

  
	
   

  	
  11.2.

  	
  Notices

  	
  97

  
	
   

  	
  11.3.

  	
  No Waiver;
  Cumulative Remedies

  	
  98

  

 

iii

 

	
   

  	
  11.4.

  	
  Survival

  	
  99

  
	
   

  	
  11.5.

  	
  Payment of
  Expenses and Taxes

  	
  99

  
	
   

  	
  11.6.

  	
  Successors
  and Assigns

  	
  100

  
	
   

  	
  11.7.

  	
  Adjustments;
  Set-off

  	
  104

  
	
   

  	
  11.8.

  	
  Counterparts

  	
  104

  
	
   

  	
  11.9.

  	
  Severability

  	
  104

  
	
   

  	
  11.10.

  	
  Integration

  	
  105

  
	
   

  	
  11.11.

  	
  GOVERNING
  LAW

  	
  105

  
	
   

  	
  11.12.

  	
  Submission
  to Jurisdiction; Waivers

  	
  105

  
	
   

  	
  11.13.

  	
  Acknowledgments

  	
  105

  
	
   

  	
  11.14.

  	
  Releases of
  Guarantees and Liens

  	
  106

  
	
   

  	
  11.15.

  	
  Confidentiality

  	
  106

  
	
   

  	
  11.16.

  	
  WAIVERS OF
  JURY TRIAL

  	
  107

  
	
   

  	
  11.17.

  	
  [Reserved]

  	
  107

  
	
   

  	
  11.18.

  	
  Conversion
  of Currencies

  	
  107

  
	
   

  	
  11.19.

  	
  Interest
  Rate Limitation

  	
  107

  

 

SCHEDULES:

 

	
  1.1(a)

  	
   

  	
  Mortgaged Property

  
	
  1.1(b)

  	
   

  	
  Specified Hedge Agreements

  
	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Commitments

  
	
  3.7

  	
   

  	
  Existing Letters of Credit

  
	
  5.4

  	
   

  	
  Consents, Authorization, Filings and Notices

  
	
  5.6

  	
   

  	
  Litigation

  
	
  5.15(a)

  	
   

  	
  Subsidiaries

  
	
  5.15(b)

  	
   

  	
  Outstanding Equity Commitments

  
	
  5.19(a)

  	
   

  	
  UCC Filing Jurisdictions

  
	
  5.19(b)

  	
   

  	
  Mortgage Filing Jurisdictions

  
	
  5.22

  	
   

  	
  Regulation H

  
	
  5.23

  	
   

  	
  Material Contracts

  
	
  5.24

  	
   

  	
  Insurance

  
	
  8.2(d)

  	
   

  	
  Existing Indebtedness

  
	
  8.3(l)

  	
   

  	
  Existing Liens

  
	
  8.8(f)

  	
   

  	
  Existing Investments

  
	
  8.13(c)

  	
   

  	
  Specified Contracts – Negative Pledge

  
	
  8.13(d)

  	
   

  	
  Specified Contracts – Prohibition of Assignment

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Form of Guarantee and Collateral Agreement

  
	
  B

  	
   

  	
  Form of Compliance Certificate

  
	
  C-1

  	
   

  	
  Form of Closing Certificate for Borrower

  
	
  C-2

  	
   

  	
  Form of Closing Certificate for Loan Parties

  
	
  D

  	
   

  	
  Form of Mortgage

  

 

iv

 

	
  E

  	
   

  	
  Form of Assignment and Assumption

  
	
  F-1

  	
   

  	
  Form of Legal Opinion of Kramer Levin Naftalis &
  Frankel LLP

  
	
  F-2

  	
   

  	
  Form of Legal Opinion of Ira H. Raphaelson

  
	
  G

  	
   

  	
  Form of Exemption Certificate

  

 

v

 

CREDIT AGREEMENT, dated as of June 9,
2008, among SCIENTIFIC GAMES INTERNATIONAL, INC., a Delaware corporation, as
Borrower, SCIENTIFIC GAMES CORPORATION, a Delaware corporation, as Holdings and
a Guarantor, the several banks and other financial institutions or entities
from time to time parties to this Agreement, and JPMORGAN CHASE BANK, N.A., as
administrative agent.

 

WHEREAS, the Borrower has
requested that (a) the Term Lenders extend credit in the form of Term
Loans on the Effective Date in an aggregate principal amount not in excess of
$550,000,000 and (b) the Revolving Lenders extend credit in the form of
Revolving Loans, the Swingline Lender extend credit in the form of Swingline
Loans and the Issuing Lenders issue Letters of Credit, in each case at any time
and from time to time during the Revolving Commitment Period, such that the
aggregate Revolving Extensions of Credit will not exceed $250,000,000 at any
time.  In addition, the Borrower may
request that the Lenders and prospective Additional Lenders agree to make
available Incremental Facilities pursuant to Section 4.17 from time to
time after the Effective Date in an aggregate amount not to exceed
$200,000,000.  The proceeds of the Term
Loans will be used to effectuate the Existing Credit Agreement Repayment and
for general corporate purposes.  The
proceeds of the Revolving Loans on the Effective Date will be used to
effectuate the Existing Credit Agreement Repayment.  The proceeds of the Revolving Loans after the
Effective Date and the proceeds of the Swingline Loans after the Effective Date
will be used only for general corporate purposes (including Permitted
Acquisitions).  Letters of Credit will be
used only for general corporate purposes; and

 

WHEREAS, the Lenders are
willing to extend such credit to the Borrower, and the Issuing Lenders are
willing to issue Letters of Credit for the account of the Borrower, on the
terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, the parties
hereto agree as follows:

 

SECTION 1.   DEFINITIONS

 

1.1.          Defined Terms.  As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

 

“Additional Lenders”:  as defined in Section 4.17.

 

“Adjustment Date”:  as defined in the definition of the term “Applicable
Margin”.

 

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

 

“Administrative
Questionnaire”:  shall mean an
Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affected Foreign Currency”:  as defined in Section 4.7(c).

 

 

“Affiliate”:  as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.  For purposes
of this definition, “control” (including, with correlative meanings, the terms “controlling”,
“controlled by” and “under common control with”), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through
the ownership of voting securities or by contract or otherwise.

 

“Agents”:  the collective reference to the Syndication
Agents, the Documentation Agents and the Administrative Agent, which term shall
include, for purposes of Section 10 only, the Issuing Lenders.

 

“Aggregate Exposure”:  with respect to any Lender at any time, the
sum of (a) the aggregate then unpaid principal amount of such Lender’s
Term Loans, (b) the amount of such Lender’s Revolving Commitments then in
effect and (c) if the Revolving Commitments of a Class have been
terminated, the amount of such Lender’s Revolving Extensions of Credit of such Class then
outstanding.

 

“Aggregate Exposure
Percentage”:  with respect to any
Lender at any time, the ratio (expressed as a percentage) of such Lender’s
Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at
such time.

 

“Agreement”:  this Credit Agreement.

 

“Agreement Currency”:  as defined in Section 11.18(b).

 

“Applicable Creditor”:  as defined in Section 11.18(b).

 

“Applicable Margin”:  for any day with respect to a Loan, the
applicable rate per annum set forth below under the caption “Applicable Margin
for Eurocurrency Loans” or “Applicable Margin for Base Rate Loans”, as the case
may be, based upon the Consolidated Leverage Ratio as of the most recent
determination date; provided that prior to the date on which the
financial statements specified in Section 7.1 for the first fiscal quarter
ended after the Effective Date are required to be delivered, the Applicable
Margin shall be deemed to be as specified in Category 2.

 

2

 

	
  Consolidated Leverage Ratio

  	
   

  	
  Applicable Margin

  for Eurocurrency

  Loans

  	
   

  	
  Applicable Margin for

  Base Rate Loans

  	
   

  
	
  Category 1

  Greater than
  or equal to 4.00:1.00

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 2

  Less than
  4.00:1.00 but greater than or equal to 3.25:1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 3

  Less than
  3.25:1.00 but greater than or equal to 2.75:1.00

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 4

  Less than
  2.75:1.00 but greater than or equal to 2.25:1.00

  	
   

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 5

  Less than
  2.25:1.00

  	
   

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  

 

For purposes of the foregoing,
the Applicable Margin shall be adjusted, on and after the first Adjustment Date
(as defined below) occurring after the Effective Date, based on changes in the
Consolidated Leverage Ratio, with such adjustments to become effective on the
date (the “Adjustment Date”) that is three Business Days after the date on
which the relevant financial statements are delivered to the Lenders pursuant
to Section 7.1 and to remain in effect until the next adjustment to be
effected pursuant to this paragraph.  If
any financial statements referred to above are not delivered within the time
periods specified in Section 7.1, then, until the date that is three
Business Days after the date on which such financial statements are delivered,
the highest rate set forth in each column of the grid above shall apply.  On each Adjustment Date, the Applicable
Margin shall be adjusted to be equal to the Applicable Margin opposite the
Category determined to exist on such Adjustment Date from the financial
statements relating to such Adjustment Date.

 

“Application”:  an application, in such form as an Issuing
Lender may specify from time to time, requesting such Issuing Lender to open a
Letter of Credit.

 

“Approved Fund”:  as defined in Section 11.6.

 

“Asset Sale”:  any Disposition of Property or series of
related Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b), (c), (d), (f) or (g) of Section 8.5) that
yields Net Cash Proceeds to any Group Member (valued at the initial principal
amount thereof in the case of non-cash proceeds consisting of notes or other
debt securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $5,000,000.

 

“Assignment and Assumption”:  an Assignment and Assumption, substantially
in the form of Exhibit E.

 

“Available Revolving
Commitment”:  as to any Revolving
Lender under either Revolving Facility at any time, an amount equal to the
excess, if any, of (a) such Lender’s 

 

3

 

Revolving
Commitment under such Revolving Facility then in effect over (b) such
Lender’s Revolving Extensions of Credit under such Revolving Facility then
outstanding; provided that, in calculating any Dollar Revolving Lender’s
Revolving Extensions of Credit under the Dollar Revolving Facility for the
purpose of determining commitment fees with respect to such Lender’s Available
Revolving Commitment under the Dollar Revolving Facility pursuant to Section 3.5,
the aggregate principal amount of Swingline Loans then outstanding shall be
deemed to be zero.

 

“Base Rate”:  for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate
in effect on such day plus 0.50%. 
For purposes hereof, “Prime Rate” shall mean the rate of interest
per annum publicly announced from time to time by the Reference Lender as its
prime rate in effect at its principal office in New York City.  Any change in the Base Rate 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.

 

“Base Rate Loans”:  Loans the rate of interest applicable to
which is based upon the Base Rate.

 

“Benefitted Lender”:  as defined in Section 11.7(a).

 

“Board”:  the Board of Governors of the Federal Reserve
System of the United States (or any successor thereto).

 

“Borrower”:  Scientific Games International, Inc., a
Delaware corporation.

 

“Borrowing Date”:  any Business Day specified by the Borrower as
a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.

 

“Business”:  as defined in Section 5.17(b).

 

“Business Day”:  a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by
law to close; provided that (a) when used in connection with a
Eurocurrency Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in deposits in the applicable currency in the
London interbank market, (b) when used in connection with a Multicurrency
Revolving Loan denominated in a Foreign Currency, the term “Business Day” shall
also exclude any day on which banks in (i) the jurisdiction of the account
to which the proceeds of such Loan are to be disbursed and (ii) the
jurisdiction in which payments of principal of and interest on such Loan are to
made are authorized or required by law to close and (c) when used in connection with any
Loan denominated in Euro, the term “Business Day” shall also exclude any day on
which the Trans-European Automated Real-Time Gross Settlement Express Transfer
System (TARGET) (or, if such clearing system ceases to be operative, such other
clearing system (if any) determined by the Administrative Agent to be a
suitable replacement) is not open for settlement of payment in Euro.

 

4

 

“Calculation Date”:  with respect to each Foreign Currency, the
fifteenth and last day of each calendar month (or, if such day is not a
Business Day, the next succeeding Business Day); provided that the
second Business Day preceding each Borrowing Date with respect to any
Multicurrency Revolving Loans denominated in a Foreign Currency shall also be a
“Calculation Date” with respect to such Foreign Currency.

 

“Capital Expenditures”:  for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for (a) the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its subsidiaries, (b) the
purchase or development of computer software or systems to the extent such
expenditures are capitalized on the consolidated balance sheet of such Person
and its subsidiaries in conformity with GAAP and (c) deferred installation
costs; provided that Capital Expenditures shall not include expenditures
recorded as consideration paid in connection with acquisitions permitted by Section 8.8(k) or
any other related expenditure made substantially contemporaneously therewith.

 

“Capital Lease Obligations”:  as to any Person, 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, for the
purposes of this Agreement, the amount of such obligations at any time shall be
the capitalized amount thereof at such time determined in accordance with GAAP.

 

“Capital Stock”:  any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of the
foregoing.

 

“Cash Collateral Account”:  as defined in Section 4.2(e).

 

“Cash Equivalents”:  (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition; (b) certificates
of deposit, time deposits, eurodollar time deposits or overnight bank deposits
having maturities of six months or less from the date of acquisition issued by
any Lender or by any commercial bank organized under the laws of the United
States or any state thereof having combined capital and surplus of not less
than $500,000,000; (c) commercial paper of an issuer rated at least “A-1”
by Standard & Poor’s Ratings Services (“S&P”) or “P-1” by
Moody’s Investors Service, Inc. (“Moody’s”), or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than
30 days, with respect to securities issued or fully guaranteed or insured
by the United States government; (e) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any 

 

5

 

political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least “A” by S&P or “A” by Moody’s; (f) securities with
maturities of six months or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; (g) shares of
Dollar denominated money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition or money market funds that (i) comply with the
criteria set forth in Securities and Exchange Conversion Rule 2a-7 under
the Investment Company Act of 1940, (ii) are rated “AAA” by S&P and “Aaa”
by Moody’s and (iii) have portfolio assets of at least $5,000,000,000; (h) in
the case of Subsidiaries doing business outside of the United States,
substantially similar investments to those set forth in clauses (a) through
(g) above denominated in foreign currencies; provided that
references to the United States shall be deemed to mean foreign countries
having a sovereign rating of “A” or better from either S&P or Moody’s; or (i) in
the case of Subsidiaries doing business outside of the United States,
substantially similar investments to those set forth in clauses (a) through
(g) above denominated in foreign currencies; provided that (i) such
investments are held in the ordinary course of business, (ii) the
aggregate amount of such investments do not exceed the Dollar Equivalent of
$50,000,000 at any time and (iii) such investments would otherwise
constitute Cash Equivalents under clause (h) above but for the
sovereign debt rating of the country issuing such foreign currency.

 

“Charges”:  as defined in Section 11.19.

 

“Class”:  (a) when used in reference to any Loan
or borrowing, refers to whether such Loan, or the Loans constituting such
borrowing, are Dollar Revolving Loans, Multicurrency Revolving Loans, Term
Loans or Swingline Loans, (b) when used in reference to any Commitment,
refers to whether such Commitment is a Dollar Revolving Commitment,
Multicurrency Revolving Commitment or Term Commitment and (c) when used in
reference to any Lender, refers to whether such Lender is a Dollar Revolving
Lender, Multicurrency Revolving Lender or Term Lender.

 

“Class Vote”:  as defined in Section 11.1.

 

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

 

“Collateral”:  all Property of the Loan Parties, now owned
or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.

 

“Commitment”:  a Term Commitment or a Revolving Commitment.

 

“Commitment Fee Rate”:  0.50% per annum.

 

“Commonly Controlled Entity”:  an entity, whether or not incorporated, that
is under common control with Holdings within the meaning of Section 4001
of ERISA or is part of a group that includes Holdings and that is treated as a
single employer under Section 414 of the Code.

 

6

 

“Compliance Certificate”:  a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.

 

“Conduit Lender”:  any special purpose entity 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, subject to the consent of the Administrative Agent and the Borrower
(which consent shall not be unreasonably withheld); 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 4.9, 4.10, 4.11 or 11.5 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”:  the Confidential
Information Memorandum relating to the Borrower and the Facilities dated May 2008,
and furnished to the Lenders.

 

“Consolidated EBITDA”:  for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period, the
sum of (a) income tax expense, (b) interest expense, amortization or
write-off of debt discount and debt issuance costs and commissions, discounts
and other fees and charges associated with Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but
not limited to, goodwill) and organization costs, (e) the earnout payments
with respect to the Global Draw Acquisition, the Games Media Acquisition, the
Racing Venue Acquisition and any Permitted Acquisitions (including any loss or
expense with respect to earnout payments with respect to such acquisitions), (f) any
extraordinary charges or losses determined in accordance with GAAP, (g) non-cash
stock-based compensation expenses, (h) any expenses, charges or losses
incurred after the Effective Date resulting from the Peru Investments in an
aggregate amount (for all periods combined) not to exceed $3,000,000, (i) the
non-cash portion of any non-recurring write-offs or write-downs as required in
accordance with GAAP and (j) any advisory fees and related expenses paid
to advisory firms in connection with Permitted Acquisitions; provided
that such amounts do not include (i) write-offs or write-downs of accounts
receivable or inventory and (ii) any write-off or write-down to the extent
it is in respect of cash payments to be made in a future period and minus,
to the extent included in the statement of such Consolidated Net Income for
such period, the sum of (a) interest income,  (b) any extraordinary income or gains
determined in accordance with GAAP and (c) any income or gains with
respect to earnout payments with respect to any acquisitions referred to in
clause (e).  For the purposes of
calculating Consolidated EBITDA for any period of four consecutive fiscal
quarters (each, a “Reference Period”) pursuant to any determination of
the Consolidated Leverage Ratio and the Consolidated Senior Debt Ratio, (i) if
at any time during such Reference Period Holdings or any Subsidiary shall have
made any Material Disposition, the Consolidated EBITDA for such Reference
Period shall be reduced by an amount equal to the Consolidated EBITDA (if
positive) 

 

7

 

attributable to the property
that is the subject of such Material Disposition for such Reference Period or
increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period and (ii) if during such
Reference Period Holdings or any Subsidiary shall have made a Material
Acquisition, Consolidated EBITDA for such Reference Period shall be calculated
after giving pro forma effect thereto as if such Material Acquisition occurred
on the first day of such Reference Period.

 

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

 

“Consolidated Interest Expense”:  for any period, total cash interest expense
(including that attributable to Capital Lease Obligations) of Holdings and its
Subsidiaries for such period with respect to all outstanding Indebtedness of
Holdings and its Subsidiaries (including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Hedge Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP
and excluding fees and expenses incurred in connection with the negotiation,
preparation and execution of this Agreement to the extent such fees are not
capitalized and are treated as interest expense in accordance with GAAP).

 

“Consolidated Leverage Ratio”:  as of the last day of any period, the ratio
of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA
for the period of four consecutive fiscal quarters then ended.

 

“Consolidated Net Income”:  for any period, the consolidated net income
(or loss) of Holdings and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of Holdings or is merged into or consolidated with Holdings or any
of its Subsidiaries, (b) the income (or deficit) of any Person (other than
a Subsidiary of Holdings) in which Holdings or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by Holdings or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of
Holdings (other than the Borrower) to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any Contractual Obligation (other than under any
Loan Document) or Requirement of Law applicable to such Subsidiary.

 

“Consolidated Senior Debt”:  all Consolidated Total Debt other than the
Senior Subordinated Securities.

 

“Consolidated Senior Debt
Ratio”:  as of the last day of any
period, the ratio of (a) Consolidated Senior Debt on such day to (b) Consolidated
EBITDA for the period of four consecutive fiscal quarters then ended.

 

“Consolidated Total Debt”:  at any date, the aggregate principal amount
of all Indebtedness of Holdings and its Subsidiaries at such date, determined
on a consolidated basis and required to be reflected on Holdings’s balance
sheet in accordance with GAAP.

 

8

 

“Continuing Directors”:  the directors of Holdings on the Effective
Date and each other director, if, in each case, such other director’s
nomination for election to the board of directors of Holdings is recommended by
a majority of the then Continuing Directors.

 

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

 

“Conversion Date”:  any date on which either (a) an Event of
Default under Section 9(f) has occurred or (b) the Commitments
shall have been terminated prior to the Revolving Termination Date and/or the
Loans shall have been declared immediately due and payable, in either case
pursuant to Section 9.

 

“Convertible Debentures
Conditions”:  either (a) on or
prior to the Convertible Debentures Trigger Date, the right of holders of the
Convertible Senior Subordinated Debentures to require Holdings to repurchase
Convertible Senior Subordinated Debentures on the Convertible Debentures
Repurchase Date shall have been eliminated or (b) on or prior to the
Convertible Debentures Trigger Date, the Convertible Senior Subordinated
Debentures shall have been refinanced, redeemed or defeased (or funds shall
have been segregated and held in a trust or in escrow, on terms and conditions
reasonably satisfactory to the Administrative Agent, for purposes of and in an
amount sufficient to discharge all payment obligations with respect to the
Convertible Senior Subordinated Debentures, other than the obligations of
Holdings to issue Equity Interests in connection with a conversion of the
Convertible Senior Subordinated Debentures), in each case in a manner permitted
hereunder (determined, for purposes of determining the Revolving Termination
Date or Term Loan Maturity Date, without giving effect to any amendment or
waiver that has not been approved by the Super Majority Facility Lenders with
respect to the applicable Facility), or (c) on the Convertible Debentures
Trigger Date, the Liquidity Condition is satisfied.

 

“Convertible Debentures
Options Transactions”:  collectively,
the transactions in connection with the issuance of the Convertible Senior
Subordinated Debentures contemplated by (i) the letter agreements dated as
of December 1, 2004, between Holdings and each of J.P. Morgan Securities
Inc., as agent for JPMorgan Chase Bank, N.A., London Branch, and Bear, Stearns
International Limited; (ii) the ISDA confirmations entered into on or
about December 23, 2004, between Holdings and each of J.P. Morgan
Securities Inc., as agent for JPMorgan Chase Bank, N.A., London Branch, and
Bear, Stearns International Limited and the related deemed 2002 ISDA Master
Agreements as referred to therein; and (iii) any other documents relating
to the matters referenced in clauses (i) or (ii) above.

 

“Convertible Debentures
Repurchase Date”:  the earliest date
on which any of the holders of the Convertible Senior Subordinated Debentures
may require Holdings to repurchase their Convertible Senior Subordinated
Debentures.  As of the Effective Date,
the Convertible Debentures Repurchase Date is June 1, 2010.

 

“Convertible Debentures
Trigger Date”:  March 1, 2010
or, if the Convertible Debentures Repurchase Date is amended to be a date other
than June 1, 2010, then the date that is 90 days prior to the Convertible
Debentures Repurchase Date.

 

9

 

“Convertible Senior
Subordinated Debentures”:  the
unsecured 0.75% Convertible Senior Subordinated Debentures due 2024 of Holdings
issued on or about December 23, 2004 in an aggregate principal amount of
$275,000,000 and the Indebtedness represented thereby.

 

“Default”:  any of the events specified in Section 9,
whether or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.

 

“Disposition”:  with respect to any Property, any sale,
lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof.  The terms “Dispose”
and “Disposed of” shall have correlative meanings.

 

“Disqualified Stock”:
any Capital Stock which, by its terms (or by the terms of any security or other
Capital Stock into which it is convertible or for which it is exchangeable), or
upon the happening of any event or condition, (a) matures or is
mandatorily redeemable (other than solely for Capital Stock that would not
constitute Disqualified Stock), pursuant to a sinking fund obligation or otherwise
(except as a result of a change of control or asset sale so long as any rights
of the holders thereof upon the occurrence of a change of control or asset sale
event shall be subject to the prior repayment in full of the Loans and all
other Obligations that are accrued and payable and the termination of the
Commitments and all outstanding Letters of Credit), (b) is redeemable at
the option of the holder thereof (other than solely for Capital Stock that
would not constitute Disqualified Stock), in whole or in part, (c) provides
for the scheduled payments of dividends in cash, or (d) is or becomes
convertible into or exchangeable for Indebtedness or any other Capital Stock
that would constitute Disqualified Stock, in each case, prior to the date that
is 90 days after the fifth anniversary of the Effective Date.

 

“Documentation Agents”:  ING Capital LLC and Bank of Tokyo -
Mitsubishi UFJ Trust Company, in their capacity as documentation agents for
each Facility.

 

“Dollar Equivalent”:  at any time as to any amount denominated in a
Foreign Currency, the equivalent amount in Dollars as determined by the
Administrative Agent at such time on the basis of the Exchange Rate for the
purchase of Dollars with such Foreign Currency on the most recent Calculation
Date for such Foreign Currency.

 

“Dollar L/C Obligations”:  at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Dollar
Letters of Credit and (b) the aggregate amount of drawings under Dollar Letters
of Credit that have not then been reimbursed pursuant to Section 3.11.

 

“Dollar Letters of Credit”:  as defined in Section 3.7(a).

 

“Dollar Revolving Commitment”:  as to any Lender, the obligation of such
Lender, if any, to make Dollar Revolving Loans and participate in Swingline
Loans and Dollar Letters of Credit in an aggregate principal and/or face amount
not to exceed the amount set forth under the heading “Dollar Revolving
Commitment” with respect to such Lender on Schedule 2.1 or in the Assignment
and Assumption pursuant to which such Lender became a party to this Agreement,
as the same may be changed from time to time pursuant to the terms hereof.  The original aggregate amount of the Dollar
Revolving Commitments is $150,000,000.

 

10

 

“Dollar Revolving Extensions
of Credit”:  as to any Dollar
Revolving Lender at any time, an amount equal to the sum of (a) the
aggregate principal amount of Dollar Revolving Loans held by such Lender then
outstanding, (b) such Lender’s Dollar Revolving Percentage of the Dollar
L/C Obligations then outstanding and (c) such Lender’s Dollar Revolving
Percentage of the aggregate principal amount of Swingline Loans then
outstanding.

 

“Dollar Revolving Facility”:  the credit facility represented by the Dollar
Revolving Commitments and Dollar Revolving Extensions of Credit.

 

“Dollar Revolving Lender”:  each Lender that has a Dollar Revolving
Commitment or any Dollar Revolving Extensions of Credit.

 

“Dollar Revolving Loans”:  as defined in Section 3.1(a).

 

“Dollar Revolving Percentage”:  as to any Dollar Revolving Lender at any
time, the percentage which such Lender’s Dollar Revolving Commitment then
constitutes of the Total Dollar Revolving Commitments (or, at any time after
the Dollar Revolving Commitments shall have expired or terminated, the
percentage which such Lender’s Dollar Revolving Extensions of Credit then
outstanding constitutes of the Total Dollar Revolving Extensions of Credit then
outstanding of all Dollar Revolving Lenders).

 

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

 

“Domestic Subsidiary”:  any Subsidiary of Holdings organized under
the laws of any jurisdiction within the United States; provided that any
such Subsidiary that is directly owned by a Foreign Subsidiary shall be deemed
not to be a “Domestic Subsidiary” (and thus shall be deemed to be a Foreign
Subsidiary) if and for so long as, in the Borrower’s reasonable judgment, there
would be any adverse tax consequences to, or such treatment as a “Domestic
Subsidiary” would otherwise be financially disadvantageous for, Holdings and
its Subsidiaries if such Subsidiary were to be treated as a “Domestic
Subsidiary” under the Loan Documents.

 

“Effective Date”:  the date on which the conditions specified in
Section 6.1 are satisfied.

 

“Environmental Laws”:  any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, binding agreements, judgments or
requirements of any Governmental Authority or other Requirements of Law (including
common law) regulating, relating to or imposing liability or standards of
conduct concerning pollution or protection of human health or the environment,
as have been, are now, or may at any time hereafter be in effect.

 

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

 

“Eurocurrency Base Rate”:  with respect to each day during each Interest
Period pertaining to a Eurocurrency Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars (or, in the case of a Eurocurrency
Loan that is a Multicurrency Revolving Loan denominated in a Foreign Currency,
the applicable Foreign Currency) for a period equal to 

 

11

 

such Interest Period commencing
on the first day of such Interest Period appearing on Page 3750 (or on the
Page for the applicable Foreign Currency) of the Telerate screen (or such
other page that may replace such page, as determined by the Administrative
Agent) as of 11:00 A.M., London time, two Business Days prior to the
beginning of such Interest Period (or, in the case of Eurocurrency Loans
denominated in British Pounds Sterling, the relevant Page of the Telerate
screen as of 11:00 A.M., London time, on the first day of such Interest
Period).  In the event that such rate
does not appear on Page 3750 (or on the Page for the applicable
Foreign Currency) of the Telerate screen (or otherwise on such screen), the “Eurocurrency
Base Rate” shall be determined by reference to such other comparable publicly
available service for displaying Eurocurrency 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 Dollar deposits (or, in the
case of a Eurocurrency Loan that is a Multicurrency Revolving Loan denominated
in a Foreign Currency, deposits in the applicable Foreign Currency) at or about
11:00 A.M., local time, two Business Days prior to the beginning of such
Interest Period in the interbank eurocurrency market where its eurocurrency 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.

 

“Eurocurrency Loans”:  Loans the rate of interest applicable to
which is based upon the Eurocurrency Rate.

 

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

 

	
   

  	
  Eurocurrency
  Base Rate

  	
   

  
	
   

  	
  1.00 -
  Eurocurrency Reserve Requirements

  	
   

  

 

“Eurocurrency Reserve
Requirements”:  for any day as
applied to a Eurocurrency Loan, the aggregate (without duplication) of the maximum
rates (expressed as a decimal fraction) of reserve requirements in effect on
such day (including any special, supplemental, marginal or 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.  Such reserve
requirements shall include those imposed pursuant to Regulation D.  Eurocurrency Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Eurocurrency Reserve Requirements shall be adjusted
automatically on and as of the effective date of any change in any reserve
requirement.

 

“Eurocurrency Tranche”:  with respect to any Facility, the collective
reference to Eurocurrency Loans in the same currency under such Facility the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).

 

12

 

“Event of Default”:  any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.

 

“Exchange Rate”:  on any day, with respect to any currency (the
“specified currency”), the rate at which such specified currency may be
exchanged into any other relevant currency (the “exchange currency”), as
set forth at approximately 11:00 A.M., London time, on such date on the
Reuters World Currency Page for such currency.  In the event that such rate does not appear
on any Reuters World Currency Page, the Exchange Rate shall be determined by
reference to such other publicly available service for displaying exchange
rates as may be agreed upon by the Administrative Agent and the Borrower, or,
in the absence of such agreement, 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
specified currency are then being conducted, at or about 10:00 A.M., local
time, on such date for the purchase of such exchange currency with the relevant
specified currency for delivery two 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, after consultation with the Borrower,
may use any reasonable method it deems appropriate to determine such rate, and
such determination shall be presumed correct absent manifest error.

 

“Excluded Indebtedness”:  all Indebtedness permitted by Section 8.2.

 

“Existing Credit Agreement”:  the Amended and Restated Credit Agreement
dated as of December 23, 2004, as amended and restated as of January 24,
2007, by and among Holdings, as borrower, the several lenders from time to time
party thereto and the Administrative Agent.

 

“Existing Credit Agreement
Repayment”:  (i) the termination
of all financing commitments under the Existing Credit Agreement, (ii) the
repayment of all loans and other amounts accrued and owing thereunder and (iii) the
release and the termination of all security interests and other liens securing
obligations thereunder.

 

“Existing Letters of Credit”:  the letters of credit listed on
Schedule 3.7 that are outstanding under the Existing Credit Agreement on
the Effective Date.

 

“Expenditure Use Amounts”:  at any date, the amount equal to the sum of
all amounts utilized by Holdings and its Subsidiaries on and after the
Effective Date to make Restricted Payments in reliance on the Permitted
Expenditure Amount.

 

“Facility”:  each of (a) the Term Facility, (b) the
Dollar Revolving Facility and (c) the Multicurrency Revolving Facility.

 

“Federal Funds Effective
Rate”:  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 the
Reference Lender from three federal funds brokers of recognized standing
selected by such Reference Lender.

 

13

 

“Fee Payment Date”:  the third Business Day after the last day of
each March, June, September and December and the last day of the
Revolving Commitment Period (or, in respect of either Class of Revolving
Commitments, on such earlier date as the Revolving Commitments of such Class shall
terminate as provided herein).

 

“Foreign Currency”:  (a) with respect to any Multicurrency
Revolving Loan or Multicurrency Revolving Letter of Credit, each of British
Pounds Sterling, Euro and any other currency approved by the Multicurrency
Revolving Lenders or the relevant Issuing Lender, as applicable, and the
Administrative Agent, provided that the Eurocurrency Base Rate applicable
to Multicurrency Revolving Loans denominated in a Foreign Currency approved
after the Effective Date may be amended as agreed by the Multicurrency
Revolving Lenders, the Administrative Agent and the Borrower and (b) solely
with respect to any Multicurrency Revolving Letter of Credit issued by JPMorgan
Chase Bank, N.A., each of British Pounds Sterling, Euro and Canadian Dollars,
and, to the extent available, Chilean Pesos, Swiss Francs, New Israeli Shekels,
Turkish Liras and Indian Rupees.

 

“Foreign Currency Equivalent”:  at any time as to any amount denominated in
Dollars, the equivalent amount in the relevant Foreign Currency or Currencies
as determined by the Administrative Agent at such time on the basis of the
Exchange Rate for the purchase of such Foreign Currency or Currencies with
Dollars on the date of determination thereof.

 

“Foreign Subsidiary”:  any Subsidiary of Holdings that is not a
Domestic Subsidiary.

 

“Funding Office”:  the office of the Administrative Agent
specified in Section 11.2, 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”:  generally accepted accounting principles in
the United States as in effect from time to time.  In the event that any Accounting Change (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then,
at any time, the Borrower (by notice to the Administrative Agent) may, or the
Administrative Agent, or the Required Lenders (in each case, by notice to the
Borrower) may, elect to require negotiations in order to amend such provisions
of this Agreement so as to equitably reflect such Accounting Changes with the
desired result that the criteria for evaluating the financial condition of
Holdings and its Subsidiaries shall be the same after such Accounting Changes
as if such Accounting Changes had not been made.  In the event of any such election, then,
until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders (or the
electing party has rescinded its election), all financial covenants, standards
and terms in this Agreement shall continue to be calculated or construed as if
such Accounting Changes had not occurred. 
“Accounting Changes” refers to (a) changes in accounting
principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board, the Emerging Issues
Task Force or, if applicable, the SEC or (b) changes in the application of
GAAP from the application used in preparation of Holdings’s audited financial
statements for its fiscal year ended December 31, 2007.

 

14

 

“Games Media Acquisition”:  the purchase of Games Media Limited, a
supplier of amusement and gaming terminals and content, and certain related
companies by one or more Group Members pursuant to a stock purchase agreement
for an initial consideration not exceeding £10,200,000 plus (a) working
capital adjustments, (b) future earnout payments and (c) other
payments pursuant to such stock purchase agreement subject to a maximum amount
to be agreed upon.

 

“Gaming Approval”:  any and all approvals, authorizations,
consents, rulings, orders or directives of any Governmental Authority (i) necessary,
as of the Effective Date, to enable the Group Members to engage in the lottery,
gambling, horse racing or gaming business or otherwise continue to conduct
their business as it is conducted on the Effective Date, (ii) that
regulates gaming in any jurisdiction in which the Group Members conduct gaming
activities and has jurisdiction over such persons (including any successors to
any of them) or (iii) necessary, as of the Effective Date, to accomplish
the transactions contemplated hereby.

 

“Gaming Authority”:  as to any Person, any governmental agency,
authority, board, bureau, commission, department, office or instrumentality
with regulatory, licensing or permitting authority or jurisdiction over any
gaming business or enterprise or any Gaming Facility, or with regulatory,
licensing or permitting authority or jurisdiction over any gaming operation (or
proposed gaming operation) owned, managed or operated by any Group Member.

 

“Gaming Facility”:  as to any Person, any lottery operation,
gaming establishment and other property or assets directly ancillary thereto or
used in connection therewith, including, without limitation, any casinos,
hotels, resorts, race tracks, off-track wagering sites and other recreation and
entertainment facilities owned, managed or operated by any Group Member.

 

“Gaming Laws”:  as to any Person, (a) constitutions,
treaties, statutes or laws governing Gaming Facilities (including, without
limitation, pari-mutuel race tracks) and rules, regulations, codes and
ordinances of any Gaming Authority, and all administrative or judicial orders
or decrees or other laws pursuant to which any Gaming Authority possesses
regulatory, licensing or permit authority over gambling, gaming or Gaming
Facility activities conducted by any Group Member within its jurisdiction, (b) Gaming
Approvals and (c) orders, decisions, determinations, judgments, awards and
decrees of any Gaming Authority.

 

“Global Draw Acquisition”:  the purchase of Global Draw, Ltd., a supplier
of fixed odds betting terminals and systems, and interactive betting systems,
and certain related companies by one or more Group Members from Walter Grubmueller
and other parties.

 

“Governmental Authority”:  any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

 

“Group Members”:  the collective reference to Holdings and its
Subsidiaries (including the Borrower).

 

15

 

“Guarantee and Collateral
Agreement”:  the Guarantee and
Collateral Agreement executed and delivered by the Borrower, Holdings and each
Subsidiary Guarantor, substantially in the form of Exhibit A.

 

“Guarantee Obligation”:  as to any Person (the “guaranteeing person”),
any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the “primary
obligations”) of any other third Person (the “primary obligor”) in
any manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (iii) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable pursuant to the terms
of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person’s maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.

 

“Guarantors”: the
collective reference to Holdings and the Subsidiary Guarantors.

 

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

 

“Holdings”: Scientific
Games Corporation, a Delaware corporation.

 

“Incremental
Facilities”:  as defined in Section 4.17.

 

“Indebtedness”:  of any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than current trade payables incurred in the 

 

16

 

ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital
Lease Obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party or applicant under or in respect
of acceptances, letters of credit, surety bonds or similar arrangements, (g) the
liquidation value of all mandatorily redeemable preferred Capital Stock of such
Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above
and (i) all obligations of the kind referred to in clauses (a) through
(h) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on Property
(including accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such
obligation.  The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such entity, except to the extent that the terms of
such Indebtedness expressly provide that such Person is not liable therefor.

 

“Indemnified Liabilities”:  as defined in Section 11.5.

 

“Indemnitee”:  as defined in Section 11.5.

 

“Ineligible Assignee”:  (a) Holdings or any of its Subsidiaries
or other Affiliates (except any such Affiliate that is not a Subsidiary of
Holdings and is regularly engaged as its principal business in the purchase and
sale of senior secured loans) or (b) any other Person that is (i) to
the extent required under applicable Gaming Laws, a Person who is not
registered or licensed with, approved, qualified or found suitable by a Gaming
Authority, or has been disapproved, denied a license, qualification or approval
or found unsuitable by a Gaming Authority (whichever may be required under
applicable Gaming Laws) or (ii) a competitor of Holdings or an affiliate
or related entity of any such competitor.

 

“Insolvency”:  with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245
of ERISA.

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

“Intellectual Property”:  the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to sue at law or
in equity for any infringement or other impairment thereof, including the right
to receive all proceeds and damages therefrom.

 

“Interest Payment Date”:  (a) as to any Base Rate Loan (other than
a 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 Eurocurrency Loan having an 

 

17

 

Interest Period of three months
or less, the last day of such Interest Period, (c) as to any Eurocurrency
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 Dollar Revolving Loan that is a Base Rate Loan and is prepaid prior to
the end of the Revolving Commitment Period), 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”:  as to any Eurocurrency Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurocurrency Loan and ending one, two, three or six months
thereafter, or, if available from all participating Lenders, nine or 12 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 Eurocurrency Loan and ending one, two, three or six months
thereafter, or, if available from all participating Lenders, nine or 12 months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not later than 11:00 A.M., New York City time, three
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 Termination Date (in the case of a Revolving Facility) or beyond the
date final payment is due on the Term Loans; 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.

 

“Investments”:  as defined in Section 8.8.

 

“Issuing Lenders”:  JPMorgan Chase Bank, N.A., Wells Fargo Bank,
National Association and Toronto Dominion Texas (LLC), in their respective
capacities as an issuer of Letters of Credit hereunder, Bayerische Hypo- und
Vereinsbank AG, New York Branch, in its capacity as issuer of an Existing
Letter of Credit, and their respective successors or any other Revolving Lender
under the relevant Revolving Facility from time to time designated by the
Borrower as an Issuing Lender under such Revolving Facility with the consent of
such Revolving Lender and the Administrative Agent.  An Issuing Lender may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of such
Issuing Lender, in 

 

18

 

which case the term “Issuing
Lender” shall include any such Affiliate with respect to Letters of Credit
issued by such Affiliate.

 

“Judgment Currency”:  as defined in Section 11.18(b).

 

“L/C Commitment”:  $200,000,000.

 

“L/C Disbursement”:  the amount of a drawing under a Letter of
Credit that has not then been reimbursed pursuant to Section 3.11.

 

“L/C Fee Payment Date”:  the third Business Day after the last day of
each March, June, September and December and the last day of the
Revolving Commitment Period.

 

“L/C Obligations”:  Dollar L/C Obligations and Multicurrency L/C
Obligations.

 

“L/C Participants”:  with respect to any Letter of Credit issued
under a Revolving Facility or L/C Disbursement thereunder, the collective
reference to all the Revolving Lenders under such Revolving Facility other than
the Issuing Lender that issued such Letter of Credit (in the event such Issuing
Lender is a Revolving Lender).

 

“Lead Arranger”:  J.P. Morgan Securities Inc., in its capacity
as lead arranger and bookrunner for each Facility.

 

“Lender Affiliate”:  (a) any Affiliate of any Lender, (b) any
Person that is administered or managed by any Lender and that is engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business and (c) with
respect to any Lender which is a fund that invests in commercial loans and
similar extensions of credit, any other fund that invests in commercial loans
and similar extensions of credit and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such Lender or
investment advisor.

 

“Lenders”:  the Persons listed on Schedule 2.1 and
any other Person that shall have become a party hereto pursuant to an
Assignment and Assumption, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Assumption; provided that, unless
the context otherwise requires, each reference herein to the Lenders shall be
deemed to include any Swingline Lender, Issuing Lender or Conduit Lender.

 

“Letter of Credit”:  a Dollar Letter of Credit or a Multicurrency
Letter of Credit.

 

“Lien”:  any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).

 

“Liquidity Condition”:
the condition that the sum of the aggregate Available Revolving Commitments
plus cash on hand and Cash Equivalents of the Loan Parties (to the extent that
such cash and Cash Equivalents are (i) available to the Loan Parties
without any 

 

19

 

restriction that would impair
the application thereof to pay Indebtedness within three Business Days and (ii) not
subject to any Liens other than (A) Liens created under the Loan Documents
or (B) Liens arising by operation of law, or bankers Liens and brokers
Liens arising under customary account agreements entered into in the ordinary
course of business, in each case that do not impair access to such cash or Cash
Equivalents) shall be not less than (a) for purposes of determining
whether the Convertible Debentures Conditions have been satisfied, the sum of
the principal amount of Convertible Senior Subordinated Debentures then
outstanding plus $50,000,000, and (b) for purposes of determining whether
the Subordinated Notes Conditions have been satisfied, the sum of the principal
amount of 2004 Senior Subordinated Notes then outstanding plus
$50,000,000; provided that if the Liquidity Condition is to be satisfied
both for purposes of the Convertible Debentures Conditions and the Subordinated
Notes Conditions while the Convertible Senior Subordinated Debentures and the
2004 Senior Subordinated Notes are outstanding, then such conditions must be
satisfied without counting the sum of the aggregate Available Revolving
Commitments plus cash on hand and Cash Equivalents that is utilized for
purposes of satisfying the Convertible Debentures Conditions also for
satisfying the Subordinated Notes Conditions.

 

“Loan”:  any loan made by any Lender pursuant to this
Agreement.

 

“Loan Documents”:  this Agreement, the Security Documents and
the Notes.

 

“Loan Parties”:  the Borrower and each other Group Member that
is a party to a Loan Document as a Guarantor.

 

“Majority Facility Lenders”:  with respect to any Facility, the holders of
more than 50% of the aggregate unpaid principal amount of the Term Loans or the
Total Revolving Extensions of Credit, as the case may be, outstanding under
such Facility (or, in the case of a Revolving Facility, prior to any
termination of the Revolving Commitments thereunder, the holders of more than
50% of the Total Revolving Commitments thereunder).

 

“Material Acquisition”:  any acquisition of property or series of
related acquisitions of property that (a) constitutes assets comprising
all or substantially all of an operating unit of a business or constitutes all
or substantially all of the common stock of a Person and (b) involves the
payment of consideration by the Borrower and its Subsidiaries in excess of
$5,000,000.

 

“Material Adverse Effect”:  a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise), results of
operations or prospects of Holdings and its Subsidiaries, taken as a whole or (b) the
validity or enforceability of this Agreement or any of the other Loan Documents
or the rights or remedies of the Agents or the Lenders hereunder or thereunder.

 

“Material Contract”:  each contract of the Group Members described
on Schedule 5.23.

 

20

 

“Material Disposition”:  any Disposition of property or series of
related Dispositions of property that yields gross proceeds to Holdings or any
of its Subsidiaries in excess of $5,000,000.

 

“Material Indebtedness”:  Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedge Agreements,
of Holdings or any Subsidiary in an aggregate principal amount exceeding
$20,000,000.  For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of Holdings or
any Subsidiary in respect of any Hedge Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that
Holdings or such Subsidiary would be required to pay if such Hedge Agreement
were terminated at such time.

 

“Materials of Environmental
Concern”:  any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products, asbestos
or asbestos-containing material, polychlorinated biphenyls, urea-formaldehyde
insulation, any hazardous or toxic substances, materials or wastes, defined as
such or regulated pursuant to any applicable Environmental Laws, and any other
substances that could reasonably be expected to result in liability under any
applicable Environmental Laws.

 

“Maximum Rate”:  as defined in Section 11.19.

 

“Mortgaged Properties”:  the real properties listed on
Schedule 1.1(a), as to which the Administrative Agent for the benefit of
the Lenders shall be granted a Lien pursuant to the Mortgages.

 

“Mortgages”:  each of the mortgages and deeds of trust, as
applicable, made by any Loan Party in favor of, or for the benefit of, the
Administrative Agent for the benefit of the Lenders, substantially in the form
of Exhibit D (with such changes thereto as shall be advisable under the
law of the jurisdiction in which such mortgage or deed of trust is to be
recorded).

 

“Multicurrency L/C
Obligations”:  at any time, an amount
equal to the sum of (a) the aggregate then undrawn and unexpired amount of
the then outstanding Multicurrency Letters of Credit (including the Dollar
Equivalent of Multicurrency Letters of Credit issued in Foreign Currencies) and
(b) the aggregate amount of drawings under Multicurrency Letters of Credit
(including the Dollar Equivalent of Multicurrency Letters of Credit issued in
Foreign Currencies to the extent such amounts have not been converted to
Dollars in accordance with the terms hereof) that have not then been reimbursed
pursuant to Section 3.11.

 

“Multicurrency Letters of
Credit”:  as defined in Section 3.7(a).

 

“Multicurrency Revolving
Commitment”:  as to any Multicurrency
Revolving Lender, the obligation of such Lender, if any, to make Multicurrency
Revolving Loans and participate in Multicurrency Letters of Credit in an
aggregate principal and/or face amount (based on Dollar Equivalents, in the
case of amounts denominated in Foreign Currencies) not to exceed the amount set
forth under the heading “Multicurrency Revolving Commitment” with respect to
such Lender on Schedule 2.1 or in the Assignment and Assumption pursuant
to which such Lender became a party to this Agreement, as the same may be
changed from time to time 

 

21

 

pursuant to the terms
hereof.  The aggregate amount of the
Multicurrency Revolving Commitments on the Effective Date is $100,000,000.

 

“Multicurrency Revolving
Extensions of Credit”:  as to any
Multicurrency Revolving Lender at any time, an amount equal to the sum of (a) the
aggregate principal amount of all Multicurrency Revolving Loans denominated in
Dollars held by such Lender then outstanding, (b) such Lender’s
Multicurrency Revolving Percentage of the Multicurrency L/C Obligations then
outstanding and (c) such Lender’s Multicurrency Revolving Percentage of
the Dollar Equivalent of the aggregate principal amount of Multicurrency
Revolving Loans denominated in Foreign Currencies then outstanding.

 

“Multicurrency Revolving
Facility”:  the credit facility
represented by the Multicurrency Revolving Commitments and the Multicurrency
Revolving Extensions of Credit.

 

“Multicurrency Revolving
Lender”:  each Lender that has a
Multicurrency Revolving Commitment or any Multicurrency Revolving Extensions of
Credit.

 

“Multicurrency Revolving
Loans”:  as defined in Section 3.1(a).

 

“Multicurrency Revolving
Percentage”:  as to any Multicurrency
Revolving Lender at any time, the percentage which such Lender’s Multicurrency
Revolving Commitment then constitutes of the Total Multicurrency Revolving
Commitments (or, at any time after the Multicurrency Revolving Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender’s Multicurrency Revolving Extensions of Credit then
outstanding constitutes of the Total Multicurrency Revolving Extensions of
Credit then outstanding of all Multicurrency Revolving Lenders).

 

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

 

“Net Cash Proceeds”:  (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or by the Disposition of any non-cash consideration
received in connection therewith or otherwise, but only as and when received)
of such Asset Sale or Recovery Event, net of attorneys’ fees, accountants’
fees, investment banking fees, brokers’ fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder
on any asset that is the subject of such Asset Sale or Recovery Event (other
than any Lien pursuant to a Security Document) and other customary fees and
expenses actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection with any issuance or sale of Capital
Stock or any incurrence of Indebtedness, the cash proceeds received from such
issuance or incurrence, net of attorneys’ fees, investment banking fees,
accountants’ fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith.

 

22

 

“New Co-Operative Services
Contract”:  any new contract relating
to the establishment and operation of a co-operative service instant ticket
lottery with a customer for whom neither Holdings nor any of its Subsidiaries
operated a co-operative service instant ticket lottery on or prior to the date
such contract is entered into or any new contract relating to a co-operative
service instant ticket lottery with an existing customer of Holdings or any of
its Subsidiaries that was entered into in accordance with normal jurisdictional
laws regarding “request for proposal” procedures, provided that such
contract shall cease to be a New Co-Operative Services Contract on the date on
which Holdings or such Subsidiary commences “commercial operations” under such
contract.

 

“New On-Line Contract”:  any new contract relating to the
establishment and operation of an on-line lottery or other wide area gaming
system with a customer for whom neither Holdings nor any of its Subsidiaries
operated an on-line lottery or other wide area gaming system on or immediately
prior to the date such contract is entered into or any new contract relating to
an on-line lottery or other wide area gaming system with an existing customer
of Holdings or any of its Subsidiaries that was entered into in accordance with
normal procurement procedures; provided that, such contract shall cease
to be a New On-Line Contract three months after the date on which Holdings or
such Subsidiary commences “commercial operations” under such contract.

 

“New Pari-Mutuel Contract”:  a new contract relating to the establishment
and operation of a pari-mutuel wagering system at a horse track, dog track or
off-track betting facility where neither Holdings nor any of its Subsidiaries
previously operated a pari-mutuel wagering system, provided that such
contract shall cease to be a New Pari-Mutuel Contract on the date on which
Holdings or such Subsidiary commences “commercial operations” under such
contract.

 

“Non-Excluded Taxes”:  as defined in Section 4.10(a).

 

“Non-Guarantor Subsidiary”:  any Subsidiary of Holdings that is not the
Borrower or a Subsidiary Guarantor.

 

“Non-U.S. Lender”:  as defined in Section 4.10(d).

 

“Notes”:  the collective reference to any promissory note
evidencing Loans.

 

“Obligations”:  the unpaid principal of and interest on
(including interest accruing after the maturity of the 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 Borrower (or, in the case of Specified Hedge
Agreements, Holdings or any of its Subsidiaries) to any Agent or to any Lender
(or, in the case of Specified Hedge Agreements, any affiliate of any Lender or
any counterparty to a Specified Hedge Agreement set forth on Schedule 1.1(b)),
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 Hedge Agreement or any other document made, delivered or
given in connection herewith or therewith, whether on account of 

 

23

 

principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including all
fees, charges and disbursements of counsel to any Agent or to any Lender that
are required to be paid by the Borrower pursuant to this Agreement) or
otherwise; provided that (i) obligations of Holdings or any
Subsidiary under any Specified Hedge Agreement shall be secured and guaranteed
pursuant to the Security Documents only to the extent that, and for so long as,
the other Obligations are so secured and guaranteed and (ii) any release
of Collateral or Subsidiary Guarantors effected in the manner permitted by this
Agreement shall not require the consent of holders of obligations under
Specified Hedge Agreements.

 

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

 

“Participant”:  as defined in Section 11.6(c).

 

“PBGC”:  the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (or any
successor).

 

“Perfection Certificate”:  as defined in the Guarantee and Collateral
Agreement.

 

“Permitted Acquisition”:  as to any Person, (a) the acquisition by
such Person of the Capital Stock of another Person which is primarily engaged
in the same or related line of business of Holdings and its Subsidiaries (or
any other Person that is engaged in a business that is a reasonable extension
of the business of Holdings and its Subsidiaries and that utilizes the same or
similar technology as that used by Holdings and its Subsidiaries immediately
prior to such acquisition) so long as following such acquisition such other
Person becomes a Subsidiary of such Person or (b) the acquisition by such
Person of all or substantially all of the assets of another Person or all or
substantially all of the assets constituting a division or business unit of
another Person.

 

“Permitted Additional Senior
Indebtedness”:  Indebtedness in
respect of unsecured debt issued by Holdings or the Borrower; provided
that (a) such Indebtedness matures no earlier than, and does not require
any scheduled payment of principal, mandatory prepayment or redemption of
principal prior to, the date that is 90 days after the fifth anniversary of the
Effective Date (except for up to $5,000,000 of principal payments during any
year, in the aggregate for all such Indebtedness, with carry forwards to the
extent such $5,000,000 allowed amount is not used in any year), (b) the other
terms of such Indebtedness, taken as a whole, are no less favorable to
Holdings, the Borrower and the Lenders in any material respect than those of
senior unsecured debt securities issued in the capital markets by similarly
rated issuers, (c) such Indebtedness is not subject to any Guarantee
Obligation by any Person that is not a Loan Party (and any such Guarantee
Obligation by a Subsidiary Guarantor shall provide for release thereof if the
Guarantee Obligation of the applicable Subsidiary Guarantor in respect of the
Obligations is released), (d) at the time of and after giving effect to
the incurrence of such Indebtedness, no Default or Event of Default has
occurred and is continuing, (e) Holdings shall be in compliance with Section 8.1
as of the last day of the most recently ended fiscal quarter of Holdings for
which financial statements are available at the time of issuance of such
Indebtedness, determined on a 

 

24

 

Pro Forma Basis, and (f) Holdings
or the Borrower shall have delivered to the Administrative Agent, at least five
Business Days prior to the issuance of such Indebtedness, a description of the
terms and conditions of such Indebtedness and calculations demonstrating
compliance with clause (e) above, in each case certified by a
financial officer of Holdings or the Borrower.

 

“Permitted Additional
Subordinated Debt”:  Indebtedness in
respect of unsecured subordinated debt issued by Holdings or the Borrower; provided
that (a) such subordinated Indebtedness matures no earlier than, and does
not require any scheduled payment of principal prior to, the date that is 90
days after the fifth anniversary of the Effective Date, (b) the terms and
conditions of such subordinated Indebtedness (other than interest rates and
redemption premiums, which shall be based on market conditions at the time of
issuance), including, without limitation, the subordination provisions thereof,
shall be no less favorable to the Lenders and the Loan Parties than those of
the Senior Subordinated Notes, (c) such Indebtedness shall not be subject
to any Guarantee Obligation other than Guarantee Obligations of Loan Parties
that are subordinated to the same extent as the obligations of the issuer in
respect of such Indebtedness, (d) Holdings shall be in compliance with Section 8.1
as of the last day of the most recently ended fiscal quarter of Holdings for
which financial statements are available at the time of issuance of such
Indebtedness, determined on a Pro Forma Basis, and (e) Holdings or the
Borrower shall have delivered to the Administrative Agent, at least five
Business Days prior to the issuance of such subordinated Indebtedness, a
description of the terms and conditions of such subordinated Indebtedness and
calculations demonstrating compliance with clause (d) above, in each
case certified by a financial officer of Holdings or the Borrower.

 

“Permitted Expenditure
Amount”:  at any date, the amount
equal to (a) the sum of (i) (A) 50% of the amount of
Consolidated Net Income for each quarterly period ended after the Effective
Date for which financial statements have been delivered pursuant to Section 7.1 to the extent the Consolidated Net Income for such
period is positive less (B) 100% of the amount of Consolidated Net Income
for each quarterly period ended after the Effective Date for which financial
statements have been delivered pursuant to Section 7.1 to the extent the
Consolidated Net Income for such period is negative (in no event shall the
amount in this clause (i) be less than zero); (ii) 100% of the
Net Cash Proceeds received by Holdings from the sale of Capital Stock (other
than Disqualified Stock) of Holdings (other than to a Group Member) during the
period beginning on the Effective Date and ending on such date; and (iii) $5,000,000,
minus (b) the aggregate amount of Expenditure Use Amounts as of
such date.  For purposes of this
definition, Consolidated Net Income for any period shall be adjusted to add
back (to the extent otherwise deducted and without duplication) non-cash
stock-based compensation expenses.

 

“Permitted Refinancing
Securities”: (a) Permitted Additional Subordinated Debt and (b) Capital
Stock of Holdings, other than Disqualified Stock.

 

“Person”:  an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.

 

“Peru Investments”:  (a) (i) the promissory notes (“Peru
Promissory Notes”) issued as consideration by the Person who acquired,
prior to the Effective Date, the Investments in International Lotto Corporation
and Scientific Games del Peru, s.R.L. held by one or more 

 

25

 

Group Members, (ii) in the
event that, after the Effective Date, the Peru Promissory Notes are exchanged
for such Investments in International Lotto Corporation and Scientific Games
del Peru, s.R.L., such Investments or (iii) in the event of any
bankruptcy, reorganization, insolvency or liquidation proceeding with respect
to the issuer of the Peru Promissory Notes, any Investments received by any
Group Member in respect of the Peru Promissory Notes in connection with such
proceeding and (b) up to $5,000,000 of additional Investments in one or
more Subsidiaries organized in Peru, made in connection with the liquidation,
dissolution, winding up or disposition of the Investments described in clause (a) above.

 

“Peru Promissory Notes”:  as defined in the definition of the term “Peru
Investments”.

 

“Plan”:  at a particular time, any employee benefit
plan that is covered by ERISA and in respect of which Holdings or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

 

“Pro Forma Basis”: for
purposes of determining compliance with Section 8.1 as of the last day of
a fiscal quarter of Holdings (the “Compliance Date”) as a condition to
any proposed action or event hereunder (the “Proposed Action”), the
calculation of such compliance on the following basis:

 

(a)     Consolidated EBITDA for
the period of four consecutive fiscal quarters ended on the Compliance Date
shall be determined on a pro forma basis to give effect to any Material
Acquisition or Material Disposition made subsequent to the Compliance Date
(including any Material Acquisition or Material Disposition being made in
connection with the Proposed Action) as though made on the first day of such
period of four consecutive fiscal quarters; provided that solely for
purposes of (i) clause (e) of the definition of the term “Permitted
Additional Senior Indebtedness” and (ii) clause (e) of the definition
of the term “Permitted Additional Subordinated Debt”, Consolidated EBITDA for
such period shall also be determined on a pro forma basis to give effect to any
New On-Line Contract, New Co-Operative Services Contract or New Pari-Mutuel
Contract made or entered into subsequent to the Compliance Date (including any
New On-Line Contract, New Co-Operative Services Contract or New Pari-Mutuel
Contract being entered into in connection with the Proposed Action) as though
made on the first day of such period of four consecutive fiscal quarters.

 

(b)     The Consolidated Leverage
Ratio and the Consolidated Senior Debt Ratio as of the Compliance Date shall be
determined as if Consolidated Total Debt and Consolidated Senior Debt as of the
Compliance Date were equal to Consolidated Total Debt or Consolidated Senior
Debt, as applicable, as of the date of and after giving effect to the Proposed
Action (including any incurrence or payment of Indebtedness in connection
therewith).

 

(c)     Consolidated Interest
Expense for the period of four consecutive fiscal quarters ended on the
Compliance Date shall be determined as though (i) any Permitted Additional
Senior Indebtedness, any Permitted Additional Subordinated Debt, any 

 

26

 

Incremental
Facility, or any other Indebtedness incurred in connection with any Permitted
Acquisition or Restricted Payment, in each case issued or incurred after the
Compliance Date (including any such Indebtedness being issued or incurred in
connection with the Proposed Action), had been issued or incurred on the first
day of such period of four consecutive fiscal quarters and (ii) any
Indebtedness refinanced or repaid after the Compliance Date (including any
Indebtedness being refinanced or repaid in connection with the Proposed
Action), to the extent refinanced or repaid with the proceeds of any
Indebtedness included in the determination pursuant to clause (i) above,
had been refinanced or repaid on the first day of such period of four
consecutive fiscal quarters.

 

“Projections”:  as defined in Section 7.2(c).

 

“Property”:  any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.

 

“Racing Venue Acquisition”:  the purchase of assets by one or more Group
Members of Shore Line Star Greyhound Park and Entertainment Complex LLC.

 

“Recovery Event”:  any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of any Group Member.

 

“Reference Lender”:  JPMorgan Chase Bank, N.A.

 

“Refunded Swingline Loans”:  as defined in Section 3.4.

 

“Refunding Date”:  as defined in Section 3.4.

 

“Register”:  as defined in Section 11.6.

 

“Regulation U”:  Regulation U of the Board as in effect
from time to time.

 

“Reimbursement Obligation”:  the obligation of the Borrower to reimburse
each Issuing Lender pursuant to Section 3.11 for amounts drawn under
Letters of Credit issued by such Issuing Lender.

 

“Reinvestment Deferred
Amount”:  with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by any Group
Member in connection therewith that are not applied to prepay the Term Loans
pursuant to Section 4.2(c) as a result of the delivery of a
Reinvestment Notice.

 

“Reinvestment Event”:  any Asset Sale or Recovery Event in respect
of which a Responsible Officer has delivered a Reinvestment Notice.

 

“Reinvestment Notice”:  a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and
that one or more Group Members intends and expects to use all or a specified
portion of the Net Cash Proceeds of an 

 

27

 

Asset Sale or Recovery Event to
make a Permitted Acquisition or to acquire or repair fixed or capital assets or
to develop software useful in such Group Members’ business, provided
that the cost of any such software development is capitalized on Holdings’s
consolidated balance sheet in accordance with GAAP.

 

“Reinvestment Prepayment
Amount”:  with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to make a
Permitted Acquisition or to acquire or repair fixed or capital assets or to
develop software useful in one or more Group Members’ business, provided
that the cost of any such software development is capitalized on Holdings’s
consolidated balance sheet in accordance with GAAP.

 

“Reinvestment Prepayment
Date”:  with respect to any
Reinvestment Event, the earlier of (a) the date occurring twelve months
after such Reinvestment Event and (b) the date on which one or more Group
Members shall have determined not to, or shall have otherwise ceased to,
acquire or repair fixed or capital assets or develop software useful in one or
more Group Members’ business or make a Permitted Acquisition with all or any
portion of the relevant Reinvestment Deferred Amount.

 

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

 

“Reorganization”:  with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

 

“Reportable Event”:  any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the 30 day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. § 4043.

 

“Required Lenders”:  at any time, the holders of more than 50% of
the sum of (a) the aggregate unpaid principal amount of the Term Loans
then outstanding and (b) the Total Revolving Commitments then in effect
(or, if the Revolving Commitments under a Revolving Facility have been
terminated, the Total Revolving Extensions of Credit under such Revolving
Facility then outstanding).

 

“Requirement of Law”:  as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

 

“Reset Date”:  as defined in Section 4.16(a).

 

“Responsible Officer”:  the chief executive officer, president,
general counsel, chief financial officer, 
treasurer or chief accounting officer of the Borrower or Holdings, but
in 

 

28

 

any event, with respect to
financial matters, the chief financial officer, treasurer or chief accounting
officer of the Borrower or Holdings.

 

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

 

“Revolving Commitment”:  a Dollar Revolving Commitment or a Multicurrency
Revolving Commitment.

 

“Revolving Commitment Period”:  the period from and including the Effective
Date to the Revolving Termination Date.

 

“Revolving Extensions of
Credit”:  Dollar Revolving Extensions
of Credit or Multicurrency Revolving Extensions of Credit (or both), as
applicable.

 

“Revolving Facility”:  the Dollar Revolving Facility or the
Multicurrency Revolving Facility.

 

“Revolving Lender”:  a Dollar Revolving Lender or a Multicurrency
Revolving Lender.

 

“Revolving Loan”:  a Dollar Revolving Loan or a Multicurrency
Revolving Loan.

 

“Revolving Percentage”:  a Dollar Revolving Percentage or a
Multicurrency Revolving Percentage, as applicable.

 

“Revolving Termination Date”:  the fifth anniversary of the Effective Date,
if each of the Convertible Debentures Conditions and the Subordinated Notes
Conditions have been satisfied or waived; provided that the Revolving
Termination Date shall be deemed to mean (a) September 15, 2012, if
the Convertible Debentures Conditions have been satisfied or waived, unless and
until the Subordinated Notes Conditions have been satisfied or waived or (b) the
Convertible Debentures Trigger Date, unless and until the Convertible
Debentures Conditions have been satisfied or waived.

 

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

 

“Secured Surety Bond”:
as defined in Section 8.3(q).

 

“Security Documents”:  the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.

 

29

 

“Senior Subordinated Notes”:  (a) the 2004 Senior Subordinated
Notes and (b) the 2008 Senior Subordinated Notes.

 

“Senior Subordinated
Securities”:  (a) the Senior
Subordinated Notes, (b) the Convertible Senior Subordinated Debentures and
(c) any Permitted Additional Subordinated Debt.

 

“Senior Subordinated
Securities Indentures”:  the
indentures entered into by Holdings and certain of its Subsidiaries in
connection with the issuance of the Senior Subordinated Securities, together
with all instruments and other agreements entered into by Holdings or such
Subsidiaries in connection therewith.

 

“Single Employer Plan”:  any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.

 

“Solvent”:  when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the “present fair
saleable value” of the assets of such Person will, as of such date, exceed the
amount of all “liabilities of such Person, contingent or otherwise”, as of such
date, as such quoted terms are determined in accordance with applicable Federal
and state laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such date,
be greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to
pay its debts as they mature.  For
purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim”
means any (x) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right
to an equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured or unmatured, disputed, undisputed,
secured or unsecured.

 

“Specified Change of Control”:  a “Change of Control” (or any other
defined term having a similar purpose) as defined in any of the Senior
Subordinated Securities Indentures or any indenture or other agreement under
which any Permitted Additional Senior Indebtedness is issued or incurred,
together with all instruments and other agreements entered into by Holdings or
its Subsidiaries in connection therewith.

 

“Specified Hedge Agreement”:  any Hedge Agreement (a) entered into by (i) Holdings
or any of its Subsidiaries and (ii) any Person that was a Lender or any
affiliate thereof at the time such Hedge Agreement was entered into (or, in the
case of Hedge Agreements in effect on the Effective Date, any Person that is a
Lender or an affiliate of a Lender as of the Effective Date), as counterparty
and (b) that has been designated by such Person or affiliate, as the case
may be, and Holdings or the Borrower, by notice to the Administrative Agent, as
a Specified Hedge Agreement, and any other Hedge Agreements listed on
Schedule 1.1(b) without giving effect to any extension of the
termination or maturity date thereof. 
For purposes hereof, The Bear Stearns Companies, Inc. and its
subsidiaries shall be deemed to be affiliates of 

 

30

 

JPMorgan Chase Bank, N.A., as
of the Effective Date upon and after the date they become such affiliates, and
any Hedge Agreement with The Bear Stearns Companies, Inc. or any of its
subsidiaries existing at that time shall be deemed to have been designated as a
Specified Hedge Agreement.  The
designation of any Hedge Agreement as a Specified Hedge Agreement shall not
create in favor of the Agent, such Person or affiliate thereof that is a party
thereto any rights in connection with the management or release of any
Collateral or of the obligations of any Guarantor under the Guarantee and
Collateral Agreement.

 

“Subject Properties”:  as defined in Section 5.17(a).

 

“Subordinated Notes
Conditions”:  Either (a) on or
prior to September 15, 2012, the outstanding 2004 Senior Subordinated
Notes have been refinanced, redeemed or defeased (or funds shall have been
segregated and held in a trust or in escrow, on terms and conditions reasonably
satisfactory to the Administrative Agent, for purposes of and in an amount
sufficient to discharge all payment obligations with respect to the
2004 Senior Subordinated Notes), in each case in a manner permitted hereunder
(determined, for purposes of determining the Revolving Termination Date or the
Term Loan Maturity Date, without giving effect to any amendment or waiver that
has not been approved by the Super Majority Facility Lenders with respect to
the applicable Facility), or (b) on September 15, 2012, the Liquidity
Condition is satisfied.

 

“Subsidiary”:  as to any Person, (a) a corporation,
partnership, limited liability company or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person and (b) any
other Person the accounts of which are required to be consolidated with those
of such Person in such Person’s consolidated financial statements in accordance
with GAAP if prepared at the date of determination.  Unless otherwise qualified, all references to
a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a direct
or indirect Subsidiary or Subsidiaries of Holdings.

 

“Subsidiary Guarantor”:  a Subsidiary (other than the Borrower) that (i) is
a Domestic Subsidiary that is a Wholly Owned Subsidiary, (ii) provides a
guarantee of any Indebtedness of Holdings, the Borrower (other than the Loans)
or any other Subsidiary Guarantor that is a Domestic Subsidiary if the
aggregate principal amount of all such Indebtedness of Holdings, the Borrower
and such Subsidiary Guarantors guaranteed by such Subsidiary exceeds
$5,000,000, or (iii) becomes a party to the Loan Documents pursuant to Section 7.9(c).

 

“Super Majority Facility
Lenders”: with respect to any Facility, the holders of more than 66 2/3% of
the aggregate unpaid principal amount of the Term Loans or the Total Revolving
Extensions of Credit, as the case may be, outstanding under such Facility (or,
in the case of a Revolving Facility, prior to any termination of the Revolving
Commitments thereunder, the holders of more than 66 2/3% of the Total Revolving
Commitments thereunder).

 

31

 

“Swingline Commitment”:  the obligation of the Swingline Lender to
make Swingline Loans pursuant to Section 3.3 in an aggregate principal
amount at any one time outstanding not to exceed $20,000,000.

 

“Swingline Lender”:  JPMorgan Chase Bank, N.A., in its capacity as
the lender of Swingline Loans.

 

“Swingline Loans”:  as defined in Section 3.3.

 

“Swingline Participation
Amount”:  as defined in Section 3.4(c).

 

“Syndication Agents”:  Bank of America, N.A. and UBS Securities LLC,
in their capacity as syndication agents for each Facility.

 

“Term Commitment”:  as to any Lender, the obligation of such
Lender, if any, to make a Term Loan to the Borrower hereunder in a principal
amount not to exceed the amount set forth under the heading “Term Commitment”
with respect to such Lender on Schedule 2.1.  The original aggregate amount of the Lenders’
Term Commitments is $550,000,000.

 

“Term Facility”:  the credit facility represented by the Term
Commitments and the Term Loans made thereunder.

 

“Term Lender”:  each Lender that has a Term Commitment or
that holds a Term Loan.

 

“Term Loan”:  a Loan made pursuant to Section 2.1.

 

“Term Loan Maturity Date”:  the fifth anniversary of the Effective Date,
if each of the Convertible Debentures Conditions and the Subordinated Notes
Conditions have been satisfied or waived; provided that the Term Loan
Maturity Date shall be deemed to mean (a) September 15, 2012, if the
Convertible Debentures Conditions have been satisfied or waived, unless and until
the Subordinated Notes Conditions have been satisfied or waived or (b) the
Convertible Debentures Trigger Date, unless and until the Convertible
Debentures Conditions have been satisfied or waived.

 

“Term Percentage”:  as to any Lender, the percentage which the
aggregate principal amount of such Lender’s Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then
outstanding.

 

“Title Policy”:  with respect to each Mortgaged Property, a
mortgagee’s title insurance policy (or policies) or marked up unconditional
binder for such insurance.

 

“Total Dollar Revolving
Commitments”:  at any time, the
aggregate amount of the Dollar Revolving Commitments of all the Dollar
Revolving Lenders.

 

“Total Dollar Revolving
Extensions of Credit”:  at any time,
the aggregate amount of the Dollar Revolving Extensions of Credit of the Dollar
Revolving Lenders outstanding at such time.

 

32

 

“Total Multicurrency
Revolving Commitments”:  at any time,
the aggregate amount of the Multicurrency Revolving Commitments of all the
Multicurrency Revolving Lenders.

 

“Total Multicurrency
Revolving Extensions of Credit”:  at
any time, the aggregate amount of the Multicurrency Revolving Extensions of
Credit of the Multicurrency Revolving Lenders outstanding at such time.

 

“Total Revolving Commitments”:  the Total Dollar Revolving Commitments or
Total Multicurrency Revolving Commitments (or both), as the context requires.

 

“Total Revolving Extensions
of Credit”:  at any time, the Total
Dollar Revolving Extensions of Credit or the Total Multicurrency Revolving
Extensions of Credit (or both), as the context requires.

 

“Transactions”:  collectively, (a) the execution,
delivery and performance by each Loan Party of the Loan Documents to which it
is or is to be a party, (b) the borrowing of Loans and the use of the
proceeds thereof, (c) the issuance of Letters of Credit, (d) the
Existing Credit Agreement Repayment, (e) the consummation of the
transactions contemplated by any of the foregoing and (f) the payment of
fees and expenses in connection with the foregoing.

 

“Transferee”:  any assignee that becomes a Lender pursuant
to Section 11.6 or any Participant.

 

“2004 Senior Subordinated
Notes”:  the 6.25% Senior Subordinated
Notes due 2012 issued by Holdings on December 23, 2004 in the aggregate
principal amount of $200,000,000 and the Indebtedness represented thereby.

 

“2008 Senior Subordinated
Notes”:  the unsecured Senior
Subordinated Notes due 2016 to be issued by the Borrower on or about the
Effective Date in the aggregate principal amount of $200,000,000 and the
Indebtedness represented thereby.

 

“Type”:  as to any Loan, its nature as a Base Rate
Loan or a Eurocurrency Loan.

 

“United States”:  the United States of America.

 

“Wholly Owned Subsidiary”:  as to any Person, any other Person all of the
Capital Stock of which (other than directors’ qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.

 

1.2.          Other Definitional
Provisions.  (a)  Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate or
other document made or delivered pursuant hereto or thereto.

 

(b)  As
used herein and in the other Loan Documents, and in any certificate or other
document made or delivered pursuant hereto or thereto, (i) all terms of an
accounting or financial nature, to the extent not defined, shall have the
respective meanings given to them under GAAP, (ii) the words “include”, “includes”
and “including” shall be deemed to be 

 

33

 

followed by the phrase “without limitation”, (iii) the
word “incur” shall be construed to mean incur, create, issue, assume, become
liable in respect of or suffer to exist (and the words “incurred” and “incurrence”
shall have correlative meanings), (iv) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, Capital
Stock, securities, revenues, accounts, leasehold interests and contract rights,
(v) the word “will” shall be construed to have the same meaning and effect
as the word “shall” and (vi) references to agreements or other Contractual
Obligations shall, unless otherwise specified, be deemed to refer to such
agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time (subject to any applicable restrictions
hereunder).

 

(c)  The
words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, Schedule and Exhibit references
are to this Agreement unless otherwise specified.

 

(d)  The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms. 
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neutral forms.

 

(e)  Any
reference to any Person shall be construed to include such Person’s successors
and assigns.

 

1.3.          Currency Conversion.  (a)  If more than one currency or
currency unit are at the same time recognized by the central bank of any
country as the lawful currency of that country, then (i) any reference in
the Loan Documents to, and any obligations arising under the Loan Documents in,
the currency of that country shall be translated into or paid in the currency
or currency unit of that country designated by the Administrative Agent and (ii) any
translation from one currency or currency unit to another shall be at the
official rate of exchange recognized by the central bank for conversion of that
currency or currency unit into the other, rounded up or down by the
Administrative Agent as it deems appropriate.

 

(b)  If a
change in any currency of a country occurs, this Agreement shall be amended
(and each party hereto agrees to enter into any supplemental agreement
necessary to effect any such amendment) to the extent that the Administrative
Agent determines such amendment to be necessary to reflect the change in
currency and to put the Lenders in the same position, so far as possible, that
they would have been in if no change in currency had occurred.

 

SECTION 2.  AMOUNT AND TERMS OF TERM LOANS

 

2.1.          Term Commitments;
Term Loans.  Subject to the terms and
conditions set forth herein, each Term Lender agrees to make a Term Loan
denominated in Dollars to the Borrower on the Effective Date in a principal
amount not exceeding its Term Commitment. 
The Term Loans may from time to time be Eurocurrency Loans or Base Rate
Loans, as determined by the Borrower and notified to the Administrative Agent
in accordance with Sections 2.2 and 4.3.

 

34

 

2.2.          Procedure for Term
Loan Borrowing.  The Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 Noon, New York City time, (a) one Business Day prior
to the requested Borrowing Date, if all requested Loans are to be made as Base
Rate Loans, or (b) three Business Days prior to the requested Borrowing
Date, if any of the requested Loans are to be Eurocurrency Loans) requesting
that the Term Lenders make the Term Loans and specifying (i) the amount
and Type of Term Loans to be borrowed, (ii) the requested Borrowing Date
and (iii) in the case of Eurocurrency Loans, the length of the Interest
Period therefor.  Upon receipt of such
notice, the Administrative Agent shall promptly notify each Term Lender
thereof.  Not later than 12:00 Noon,
New York City time, on the requested Borrowing Date each Term Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Term Loan or Term Loans to be made by
such Lender.  The Administrative Agent
shall credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Term Lenders in immediately available funds.

 

2.3.          Repayment of Term
Loans.  The Term Loan of each Term
Lender shall be repaid by the Borrower in quarterly installments on March 31,
June 30, September 30 and December 31 of each year, commencing
on the first such date that occurs after the Borrowing Date for the Term Loans,
each of which shall be in an amount equal to the product of (i) such
Lender’s Term Percentage multiplied by (ii) an amount equal to the
aggregate amount of Term Loans made on the Borrowing Date therefor multiplied
by (iii) 0.25%; provided that the last such installment shall be
due on the Term Loan Maturity Date in an amount equal to the remaining
principal amount of Term Loans.

 

SECTION 3.  AMOUNT AND TERMS OF REVOLVING COMMITMENTS

 

3.1.          Revolving Commitments.  (a)  
Subject to the terms and conditions hereof, each Dollar Revolving Lender
severally agrees to make revolving credit loans denominated in Dollars (“Dollar
Revolving Loans”) to the Borrower from time to time during the Revolving
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender’s Dollar Revolving Percentage of the sum of (i) the
Dollar L/C Obligations then outstanding and (ii) the aggregate principal
amount of the Swingline Loans then outstanding, does not exceed the amount of
such Lender’s Dollar Revolving Commitment. 
Subject to the terms and conditions hereof, each Multicurrency Revolving
Lender severally agrees to make revolving credit loans denominated in Dollars
or a Foreign Currency (“Multicurrency Revolving Loans”) to the Borrower
from time to time during the Revolving Commitment Period in an aggregate
principal amount at any one time outstanding which, when added to such Lender’s
Multicurrency Revolving Percentage of the Multicurrency L/C Obligations then
outstanding, does not exceed the amount of such Lender’s Multicurrency
Revolving Commitment. Notwithstanding anything to the contrary contained in
this Agreement, in no event may Revolving Loans be borrowed under a Revolving
Facility if, after giving effect thereto (and to any concurrent repayment or
prepayment of Revolving Loans), the Total Revolving Extensions of Credit under
such Revolving Facility would exceed the Total Revolving Commitments at such
time under such Revolving Facility. 
During the Revolving Commitment Period, the Borrower may use the
Revolving Commitments by borrowing, prepaying and 

 

35

 

reborrowing the Revolving Loans under the
relevant Revolving Facility, in whole or in part, all in accordance with the
terms and conditions hereof. The Revolving Loans may from time to time be
Eurocurrency Loans or Base Rate Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 3.2 and 4.3; provided
that Multicurrency Revolving Loans denominated in a Foreign Currency may only
be Eurocurrency Loans.

 

(b)  The
Borrower shall repay all outstanding Revolving Loans on the Revolving
Termination Date.

 

3.2.          Procedure for
Revolving Loan Borrowing.  (a) 
The Borrower may borrow under Section 3.1 during the Revolving Commitment
Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (a “Borrowing Request”)  by telephone (which notice must be received
by the Administrative Agent prior to 12:00 Noon, New York City time (or, in the
case of a Multicurrency Revolving Loan denominated in a Foreign Currency, 12:00
Noon, London time), (a) three Business Days prior to the requested
Borrowing Date, in the case of Eurocurrency Loans, or (b) one Business Day
prior to the requested Borrowing Date, in the case of Base Rate Loans),
specifying (i) whether the requested borrowing is a borrowing under the
Dollar Revolving Facility or the Multicurrency Revolving Facility, provided
that Revolving Loans denominated in a Foreign Currency may only be borrowed
under the Multicurrency Revolving Facility, (ii) the amount and Type of
Revolving Loans to be borrowed, (iii) the requested Borrowing Date, (iv) in
the case of Eurocurrency Loans, the respective amounts of each such Type of
Revolving Loan, the respective currency therefor and the respective lengths of
the initial Interest Period therefor, and (v) the location and number of
the Borrower’s account to which funds are to be distributed. Such telephonic
request shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower.

 

(b)   Each borrowing under a Revolving Facility
shall be in an amount equal to (x) in the case of Base Rate Loans,
$1,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then
aggregate Available Revolving Commitments under the relevant Revolving Facility
are less than $100,000, such lesser amount), (y) in the case of
Eurocurrency Loans denominated in Dollars, $3,000,000 or a whole multiple of
$500,000 in excess thereof or (z) in the case of Multicurrency Revolving
Loans denominated in a Foreign Currency, the Foreign Currency Equivalent of
$3,000,000 or a whole multiple of $1,000,000 in excess thereof; provided
that the Swingline Lender may request, on behalf of the Borrower, borrowings
under the Dollar Revolving Commitments that are Base Rate Loans in other
amounts pursuant to Section 3.4.

 

(c)   Upon receipt of any such Borrowing Request
from the Borrower, the Administrative Agent shall promptly notify each
applicable Revolving Lender of the requested currency and aggregate amount (in
both the requested currency and Dollars) of such borrowing.  Each Revolving Lender will make the amount of
its pro rata share of each such borrowing, which shall be based on its
Revolving Percentage under the relevant Revolving Facility, as applicable,
available to the Administrative Agent for the account of the Borrower (i) in
the case of Dollars, at the Funding Office prior to 12:00 Noon, New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent or 

 

36

 

(ii) in the case of a Foreign Currency,
by wire transfer prior to 11:00 A.M., London time, on the Borrowing Date
requested by the Borrower to the account of the Administrative Agent most
recently designated by it for such purposes by notice to the Multicurrency
Revolving Lenders in immediately available funds.  Such borrowing will then be made available to
the Borrower by the Administrative Agent crediting the account of the
Borrower, (i) in the case of Dollars, on the books of such Funding
Office, or (ii) in the case of a Foreign Currency, in accordance with
instructions provided by the Borrower, in each case with the aggregate of the
amounts made available to the Administrative Agent by the Revolving Lenders and
in like funds as received by the Administrative Agent.

 

3.3.          Swingline Commitment.  (a)  Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Dollar Revolving Commitments from time to
time during the Revolving Commitment Period by making swingline loans
denominated in Dollars (“Swingline Loans”) to the Borrower; provided
that (i) the aggregate principal amount of Swingline Loans outstanding at
any time shall not exceed the Swingline Commitment then in effect
(notwithstanding that the Swingline Loans outstanding at any time, when
aggregated with the Swingline Lender’s other outstanding Dollar Revolving
Extensions of Credit hereunder, may exceed the Swingline Commitment then in
effect), (ii) the Borrower shall not request, and the Swingline Lender
shall not make, any Swingline Loan if, after giving effect to the making of
such Swingline Loan, the aggregate amount of the Available Revolving
Commitments under the Dollar Revolving Facility would be less than zero and (iii) the
Swingline Lender shall not be required to make a Swingline Loan to refinance an
existing Swingline Loan.  During the
Revolving Commitment Period, the Borrower may use the Swingline Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof.  Swingline Loans shall
be Base Rate Loans only.

 

(b)  The
Borrower shall repay to the Swingline Lender the then unpaid principal amount
of each Swingline Loan on the earlier of the Revolving Termination Date and the
30th day after such Swingline Loan is made; provided that, during each
calendar month, there shall be at least two consecutive Business Days during
which the outstanding balance of the Swingline Loans shall be zero.

 

3.4.          Procedure for
Swingline Borrowing; Refunding of Swingline Loans.  (a)  
Whenever the Borrower desires that the Swingline Lender make Swingline
Loans it shall give the Swingline Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swingline Lender not later than 1:00 P.M., New York City time, on the
proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Commitment Period).  Each borrowing under
the Swingline Commitment shall be in an amount equal to $250,000 or a whole
multiple of $100,000 in excess thereof. 
Not later than 3:00 P.M., New York City time, on the Borrowing Date
specified in a notice in respect of Swingline Loans, the Swingline Lender shall
make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the amount of the Swingline Loan to be
made by the Swingline Lender.  The
Administrative Agent shall make the proceeds of such Swingline Loan available
to the Borrower on such Borrowing Date by depositing such proceeds in the 

 

37

 

account of the Borrower with the
Administrative Agent on such Borrowing Date in immediately available funds.

 

(b)   The Swingline Lender, at any time and from
time to time in its sole and absolute discretion may, on behalf of the Borrower
(which hereby irrevocably directs the Swingline Lender to act on its behalf),
on one Business Day’s notice given by the Swingline Lender no later than
12:00 Noon, New York City time, request each Dollar Revolving Lender to
make, and each Dollar Revolving Lender hereby agrees to make, a Dollar
Revolving Loan, in an amount equal to such Lender’s Dollar Revolving Percentage
of the aggregate amount of the Swingline Loans (the “Refunded Swingline
Loans”) outstanding on the date of such notice, to repay the Swingline
Lender.  Each Dollar Revolving Lender
shall make the amount of such Dollar Revolving Loan available to the
Administrative Agent at the Funding Office in immediately available funds, not
later than 10:00 A.M., New York City time, one Business Day after the date
of such notice.  The proceeds of such
Dollar Revolving Loans shall be immediately made available by the
Administrative Agent to the Swingline Lender for application by the Swingline
Lender to the repayment of the Refunded Swingline Loans.  The Borrower irrevocably authorizes the
Swingline Lender to charge the Borrower’s accounts with the Administrative
Agent (up to the amount available in each such account) in order to immediately
pay the amount of such Refunded Swingline Loans to the extent amounts received
from the Dollar Revolving Lenders are not sufficient to repay in full such
Refunded Swingline Loans.

 

(c)   If prior to the time a Dollar Revolving Loan
would have otherwise been made pursuant to Section 3.4(b), one of the
events described in Section 9(f) shall have occurred and be
continuing with respect to the Borrower or if for any other reason, as
determined by the Swingline Lender in its sole discretion, Dollar Revolving
Loans may not be made as contemplated by Section 3.4(b), each Dollar
Revolving Lender shall, on the date such Dollar Revolving Loan was to have been
made pursuant to the notice referred to in Section 3.4(b) (the “Refunding
Date”), purchase for cash an undivided participating interest in the then
outstanding Swingline Loans by paying to the Swingline Lender an amount (the “Swingline
Participation Amount”) equal to (i) such Lender’s Dollar Revolving
Percentage times (ii) the sum of the aggregate principal amount of
Swingline Loans then outstanding that were to have been repaid with such Dollar
Revolving Loans.

 

(d)   Whenever, at any time after the Swingline
Lender has received from any Dollar Revolving Lender such Lender’s Swingline
Participation Amount, the Swingline Lender receives any payment on account of
the Swingline Loans, the Swingline Lender will distribute to such Lender its
Swingline Participation Amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender’s
participating interest was outstanding and funded and, in the case of principal
and interest payments, to reflect such Lender’s pro  rata portion
of such payment if such payment is not sufficient to pay the principal of and
interest on all Swingline Loans then due); provided, however,
that in the event that such payment received by the Swingline Lender is
required to be returned, such Dollar Revolving Lender will return to the
Swingline Lender any portion thereof previously distributed to it by the Swingline
Lender.

 

(e)   Each Dollar Revolving Lender’s obligation to
make the Loans referred to in Section 3.4(b) and to purchase
participating interests pursuant to Section 3.4(c) shall be absolute 

 

38

 

and unconditional and shall not be affected
by any circumstance, including (i) any setoff, counterclaim, recoupment,
defense or other right that such Dollar Revolving Lender or the Borrower may
have against the Swingline Lender, the Borrower or any other Person for any
reason whatsoever; (ii) the occurrence or continuance of a Default or an
Event of Default or the failure to satisfy any of the other conditions
specified in Section 6; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other Revolving Lender; or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing.

 

3.5.          Commitment Fees, etc.  (a)  
The Borrower agrees to pay to the Administrative Agent for the account
of each Revolving Lender a commitment fee for the period from and including the
Effective Date to the last day of the Revolving Commitment Period, computed at
the Commitment Fee Rate on the average daily amount of the Available Revolving
Commitment of such Lender under each Revolving Facility during the period for
which payment is made, payable quarterly in arrears on each Fee Payment Date,
commencing on the first of such dates to occur after the date hereof.

 

(b)   The Borrower agrees to pay to the
Administrative Agent the fees in the amounts and on the dates previously agreed
to in writing by the Borrower and the Administrative Agent.

 

3.6.          Termination or Reduction
of Revolving Commitments.  The Borrower shall have the right,
upon not less than three Business Days’ notice to the Administrative Agent, to
terminate the Revolving Commitments under either Revolving Facility or, from
time to time, to reduce the amount of the Revolving Commitments under either
Revolving Facility; provided that no such termination or reduction of
Revolving Commitments under either Revolving Facility shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Loans or
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit under such Revolving Facility would exceed the Total
Revolving Commitments under such Revolving Facility.  Any such reduction shall be in an amount equal
to $1,000,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Commitments under the relevant Revolving Facility then in effect.

 

3.7.          L/C Commitment.  (a)  
Subject to the terms and conditions hereof, each Issuing Lender (in reliance
on the agreements set forth in Section 3.10(a) of the Revolving
Lenders under the relevant Revolving Facility), agrees to issue letters of
credit under the Dollar Revolving Facility (“Dollar Letters of Credit”)
and letters of credit under the Multicurrency Revolving Facility (“Multicurrency
Letters of Credit”), in each case for the account of the Borrower on any
Business Day during the Revolving Commitment Period in such form as may be
approved from time to time by such Issuing Lender; provided that no
Issuing Lender shall have any obligation to issue any Letter of Credit under a
Revolving Facility if, after giving effect to such issuance, (i) the total
L/C Obligations would exceed the L/C Commitment or (ii) the aggregate
amount of the Available Revolving Commitments under such Revolving Facility
would be less than zero.  Each Dollar
Letter of Credit shall be denominated in Dollars and each Multicurrency Letter
of Credit shall be denominated in Dollars or a Foreign Currency.  Each Letter of Credit shall expire no later
than the earlier of (x) the first anniversary of its date of 

 

39

 

issuance and (y) the date that is five
Business Days prior to the Revolving Termination Date (the “Required Expiry
Date”); provided that any Letter of Credit with a one-year term may
provide for the renewal thereof for additional one-year periods (which shall in
no event extend beyond the Required Expiry Date).  An Issuing Lender may, in its sole
discretion, extend a Letter of Credit beyond the Required Expiry Date, provided
that (i) each L/C Participant’s interest in the Issuing Lender’s
obligations and rights under and in respect of such Letter of Credit shall
terminate at the close of business on the Required Expiry Date (except with
respect to demands for drawings thereunder submitted prior to that time) and (ii) such
Issuing Lender may, as a condition to extending such Letter of Credit, require
additional fees or collateral.

 

(b)   No Issuing Lender shall at any time be obligated
to issue any Letter of Credit hereunder if such issuance would conflict with,
or cause such Issuing Lender or any L/C Participant to exceed any limits
imposed by, any applicable Requirement of Law.

 

(c)   The Existing Letters of Credit shall constitute
Letters of Credit hereunder as though issued on the Effective Date for the
Borrower’s account.

 

3.8.          Procedure for
Issuance of Letters of Credit.  The Borrower may from time to
time request that an Issuing Lender issue a Dollar Letter of Credit or a Multicurrency
Letter of Credit by delivering to such Issuing Lender at its address for
notices specified herein an Application therefor, completed to the satisfaction
of such Issuing Lender, and such other certificates, documents and other papers
and information as such Issuing Lender may request.  Upon receipt of any Application, an Issuing
Lender will notify the Administrative Agent of (i) whether the Application
is with respect to a Dollar Letter of Credit or Multicurrency Letter of Credit
and (ii) the amount, currency, requested expiration and beneficiary of the
requested Letter of Credit. Upon receipt of confirmation from the
Administrative Agent that after giving effect to the requested issuance, the
Available Revolving Commitments under the relevant Revolving Facility would not
be less than zero, such Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall promptly
issue the Letter of Credit requested thereby (but in no event shall such
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by such Issuing Lender and the Borrower.  Each Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower (with a copy to the Administrative Agent)
promptly following the issuance thereof. 
Each Issuing Lender shall promptly furnish to the Administrative Agent,
which shall in turn promptly furnish to the Lenders, notice of the issuance of
each Letter of Credit issued by such Issuing Lender (including the amount and
currency thereof).

 

3.9.          Fees and Other
Charges.  (a)   The Borrower will pay a fee on all
outstanding Letters of Credit under each Revolving Facility (determined based
upon Dollar Equivalents in the case of Multicurrency Letters of Credit issued
in Foreign Currencies) at a per annum rate equal to the Applicable Margin then
in effect with respect to Eurocurrency Loans under such Revolving Facility,
shared ratably among the Revolving Lenders under such Revolving Facility.  Such fees shall be payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date.  In addition, the Borrower shall pay to the
relevant Issuing Lender

 

40

 

for its own account a fronting fee on the
undrawn and unexpired amount of each Letter of Credit as agreed by the Borrower
and the Issuing Lender, payable quarterly in arrears on each L/C Fee Payment
Date after the issuance date.

 

(b)   In addition to the foregoing fees, the
Borrower shall pay or reimburse each Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by such Issuing Lender
in issuing, negotiating, effecting payment under, amending or otherwise
administering any Letter of Credit to the extent that the fees and expenses
associated with the issuance of such Letter of Credit exceed the fronting fee
therefor as specified in Section 3.9(a).

 

3.10.        L/C Participations.  (a)  
Each Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce such Issuing Lender to issue or maintain
Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept
and purchase and hereby accepts and purchases from such Issuing Lender, on the
terms and conditions set forth below, for such L/C Participant’s own account
and risk an undivided interest equal to (i) such L/C Participant’s Dollar
Revolving Percentage in each Issuing Lender’s obligations and rights under and
in respect of each Dollar Letter of Credit issued by such Issuing Lender
hereunder and the amount of each draft paid by such Issuing Lender thereunder
and (ii) such L/C Participant’s Multicurrency Revolving Percentage in each
Issuing Lender’s obligations and rights under and in respect of each
Multicurrency Letter of Credit issued by such Issuing Lender hereunder and the
amount of each draft paid by such Issuing Lender thereunder.  Each L/C Participant in respect of a Letter
of Credit unconditionally and irrevocably agrees with the Issuing Lender in
respect of such Letter of Credit that, if a draft is paid under such Letter of
Credit for which such Issuing Lender is not reimbursed in full by the Borrower
in accordance with the terms of this Agreement, such L/C Participant shall pay
to the Administrative Agent upon demand of such Issuing Lender an amount equal
to such L/C Participant’s Revolving Percentage under the relevant Revolving
Facility of the amount of such draft, or any part thereof, that is not so
reimbursed; provided that the related Reimbursement Obligation with
respect to a Multicurrency Letter of Credit denominated in a Foreign Currency
may be converted to Dollars pursuant to Section 3.11.  The Administrative Agent shall promptly
forward such amounts to the relevant Issuing Lender.

 

(b)   If any amount required to be paid by any L/C
Participant to the Administrative Agent for the account of an Issuing Lender
pursuant to Section 3.10(a) in respect of any unreimbursed portion of
any payment made by such Issuing Lender under any Letter of Credit is paid to
the Administrative Agent for the account of such Issuing Lender within three
Business Days after the date such payment is due, such L/C Participant shall
pay to the Administrative Agent for the account of such Issuing Lender on
demand an amount equal to the product of (i) such amount times (ii) the
daily average Federal Funds Effective Rate during the period from and including
the date such payment is required to the date on which such payment is
immediately available to such Issuing Lender times (iii) a fraction
the numerator of which is the number of days that elapse during such period and
the denominator of which is 360.  If any
such amount required to be paid by any L/C Participant pursuant to Section 3.10(a) is
not made available to the Administrative Agent for the account of the relevant
Issuing Lender by such L/C Participant within three Business Days after the
date such payment is due, such Issuing Lender shall be entitled to recover from
such L/C Participant, on demand, such amount with interest 

 

41

 

thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans under the relevant Revolving
Facility.  A certificate of such Issuing
Lender submitted to any L/C Participant with respect to any amounts owing under
this Section shall be conclusive in the absence of manifest error.

 

(c)   Whenever, at any time after an Issuing Lender
has made payment under any Letter of Credit and has received from any L/C
Participant its pro  rata share of such payment in accordance with
Section 3.10(a), the Administrative Agent or such Issuing Lender receives
any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of Collateral applied thereto by such
Issuing Lender), or any payment of interest on account thereof, the
Administrative Agent or such Issuing Lender, as the case may be, will
distribute to such L/C Participant its pro  rata share thereof; provided,
however, that in the event that any such payment received by
Administrative Agent or such Issuing Lender, as the case may be, shall be
required to be returned by the Administrative Agent or such Issuing Lender,
such L/C Participant shall return to the Administrative Agent for the account
of such Issuing Lender the portion thereof previously distributed by the
Administrative Agent or such Issuing Lender, as the case may be, to it.

 

(d)   Each L/C Participant’s obligation to purchase
participating interests pursuant to Section 3.10(b) shall be absolute
and unconditional and shall not be affected by any circumstance, including (i) any
setoff, counterclaim, recoupment, defense or other right that such L/C
Participant or the Borrower may have against any Issuing Lender, the Borrower
or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any
of the other conditions specified in Section 6; (iii) any adverse
change in the condition (financial or otherwise) of the Borrower; (iv) any
breach of this Agreement or any other Loan Document by the Borrower, any other
Loan Party or any other L/C Participant; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

 

3.11.        Reimbursement
Obligation of the Borrower.  The Borrower agrees to reimburse
each Issuing Lender on the Business Day next succeeding the Business Day on
which such Issuing Lender notifies the Borrower of the date and amount of a
draft presented under any Letter of Credit and paid by such Issuing Lender for
the amount of such draft so paid and any taxes, fees, charges or other
reasonable costs or expenses incurred by such Issuing Lender in connection with
such payment.  Each such payment shall be
made to the relevant Issuing Lender in Dollars and in immediately available
funds, provided that (a) the Borrower may, at its option, elect by
notice to such Issuing Lender immediately following receipt of notice of such
draft, to reimburse a draft paid in a Foreign Currency in the same Foreign
Currency and (b) if the Borrower does not make such election, or if
(notwithstanding such election) the Borrower does not in fact reimburse any
such draft made in a Foreign Currency on or prior to the date required pursuant
to the first sentence of this Section 3.11, then such Issuing Lender shall
convert such Reimbursement Obligation into Dollars at the rate of exchange then
available to such Issuing Lender in the interbank market where its foreign
currency exchange operations in respect of such Foreign Currency are then being
conducted and the Borrower shall thereafter be required to reimburse such
Issuing Lender in Dollars for such Reimbursement Obligation (in the amount so
converted).  Interest shall be payable on
any such amounts denominated in Dollars from the date 

 

42

 

on which the relevant draft is paid until the
relevant Issuing Lender receives payment in full at the rate set forth in (i) until
the Business Day next succeeding the date of the relevant notice, Section 4.5(b) with
respect to Base Rate Loans under the relevant Revolving Facility and (ii) thereafter,
Section 4.5(c).  Interest shall be
payable on any such amounts denominated in a Foreign Currency from the date on
which the relevant draft is paid until the relevant Issuing Lender receives
payment in full or conversion to Dollars as provided herein (i) until the
Business Day next succeeding the date of the relevant notice, at the rate
determined by the relevant Issuing Lender as its cost of funding such payment
plus the Applicable Margin with respect to Eurocurrency Loans under the
relevant Revolving Facility and (ii) thereafter, the rate set forth in Section 4.5(c).  Each drawing under any Dollar Letter of
Credit shall (unless an event of the type described in clause (i) or (ii) of
Section 9(f) shall have occurred and be continuing with respect to
the Borrower, in which case the procedures specified in Section 3.10 for
funding by L/C Participants shall apply) constitute a request by the Borrower
to the Administrative Agent for a borrowing pursuant to Section 3.2 of
Base Rate Loans under the Dollar Revolving Facility (or, at the option of the
Administrative Agent and the Swingline Lender in their sole discretion, a
borrowing pursuant to Section 3.4 of Swingline Loans) in the amount of
such drawing except that, in such event, Borrower is not deemed to have given
any representations and warranties pursuant to Section 6.2.  Except in the case of a drawing denominated
in a Foreign Currency that the Borrower elects to reimburse, and in fact
reimburses, in such Foreign Currency as provided above, each drawing under any
Multicurrency Letter of Credit shall (unless an event of the type described in
clause (i) or (ii) of Section 9(f) shall have occurred and
be continuing with respect to the Borrower, in which case the procedures
specified in Section 3.10 for funding by L/C Participants shall apply),
constitute a request by the Borrower to the Administrative Agent for a
borrowing pursuant to Section 3.2 of Base Rate Loans under the
Multicurrency Revolving Facility denominated in Dollars in the amount of such
drawing (or, in the case of a drawing denominated in a Foreign Currency, the
amount in Dollars into which the Reimbursement Obligation was converted) except
that, in either such event, the Borrower is not deemed to have given any
representations and warranties pursuant to Section 6.2.  The Borrowing Date with respect to such
borrowing shall be the first date on which a borrowing of Revolving Loans (or,
if applicable, Swingline Loans) could be made pursuant to Section 3.2 (or,
if applicable, Section 3.4), if the Administrative Agent had received a
notice of such borrowing at the time the Administrative Agent receives notice
from such Issuing Lender of such drawing under such Letter of Credit.

 

3.12.        Obligations Absolute.  The
Borrower’s obligations under Section 3.11 shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment that the Borrower may have or have had
against any Issuing Lender, any beneficiary of a Letter of Credit or any other
Person.  The Borrower also agrees with each
Issuing Lender that such Issuing Lender not shall be responsible for, and the
Borrower’s Reimbursement Obligations under Section 3.11 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee.  No Issuing Lender shall be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or 

 

43

 

advice, however transmitted, in connection
with any Letter of Credit, except for errors or omissions found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Issuing Lender.  The Borrower agrees that any action taken or
omitted by an Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in
the Uniform Commercial Code of the State of New York and UCP 500, shall be
binding on the Borrower and shall not result in any liability of such Issuing
Lender to the Borrower.

 

3.13.        Letter of Credit
Payments.  If any draft shall be presented for payment under any
Letter of Credit, the relevant Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. 
The responsibility of the relevant Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of Credit
issued by such Issuing Lender shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining in
compliance with UCP 500 that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
substantially in conformity with the requirements of such Letter of Credit.

 

3.14.        Applications.  To
the extent that any provision of any Application related to any Letter of
Credit is inconsistent with the provisions of this Section 3, the
provisions of this Section 3 shall apply.

 

SECTION 4.   GENERAL PROVISIONS APPLICABLE

                         TO LOANS AND LETTERS
OF CREDIT

 

4.1.          Optional Prepayments.  (a)  
The Borrower may at any time and from time to time prepay the Loans
(other than Multicurrency Revolving Loans denominated in a Foreign Currency)
under the relevant Facility, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent at least three
Business Days prior thereto in the case of Eurocurrency Loans denominated in
Dollars and at least one Business Day prior thereto in the case of Base Rate
Loans, which notice shall specify the date and amount of prepayment and whether
the prepayment is of Eurocurrency Loans denominated in Dollars or Base Rate
Loans; provided that, if a Eurocurrency Loan denominated in Dollars is
prepaid on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section 4.11.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.  If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with (except in the case of Dollar Revolving Loans that are
Base Rate Loans and are prepaid prior to the end of the Revolving Commitment
Period) accrued interest to such date on the amount prepaid.  Partial prepayments of Term Loans and
Revolving Loans denominated in Dollars shall be in an aggregate principal
amount of $1,000,000 or a whole multiple thereof.  Partial prepayments of Swingline Loans shall
be in an aggregate principal amount of $100,000 or a whole multiple thereof.

 

(b)   The Borrower may at any time and from time to
time prepay Multicurrency Revolving Loans denominated in a Foreign Currency, in
whole or in part, without premium or penalty except as specified in Section 4.11,
upon irrevocable notice (which notice must be 

 

44

 

received by the Administrative Agent prior to
11:00 A.M., New York City time, three Business Days before the date of
prepayment) specifying the date and amount of prepayment.  If any such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, together with any amounts payable pursuant to Section 4.11 and
accrued interest to such date on the amount prepaid.  Partial prepayments of Multicurrency
Revolving Loans denominated in a Foreign Currency shall be in a minimum
principal amount equal to the Foreign Currency Equivalent of $1,000,000 in the
relevant Foreign Currency or a multiple of the Foreign Currency Equivalent of $100,000
in the relevant Foreign Currency in excess thereof.

 

4.2.          Mandatory Prepayments.  (a)  
[Intentionally Omitted.]

 

(b)   If any Indebtedness shall be incurred by any
Group Member (other than Excluded Indebtedness), an amount equal to 100% of the
Net Cash Proceeds thereof shall be applied no later than one Business Day
following the date of such incurrence toward the prepayment of the Term Loans
as set forth in Section 4.2(d).

 

(c)   If on any date any Group Member shall receive
Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a
Reinvestment Notice shall be delivered in respect thereof, such Net Cash
Proceeds shall be applied no later than one Business Day following such date
toward the prepayment of the Term Loans as set forth in Section 4.2(d); provided
that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the
relevant Reinvestment Event shall be applied toward the prepayment of the Term
Loans as set forth in Section 4.2(d).

 

(d)   Amounts to be applied in connection with
prepayments of Term Loans made pursuant to Section 4.2 shall be applied to
the prepayment of the Term Loans in accordance with Section 4.8(b).  The application of any prepayment pursuant to
Section 4.2 shall be made, first, to Base Rate Loans under the
relevant Facility and, second, to Eurocurrency Loans under such
Facility.  Each prepayment of the Loans
under Section 4.2 shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid.

 

(e)   If, on any Calculation Date, the Total
Multicurrency Revolving Extensions of Credit exceed an amount equal to 105% of
the Total Multicurrency Revolving Commitments on such date, the Borrower shall,
without notice or demand, immediately repay such of the outstanding
Multicurrency Revolving Loans in an aggregate principal amount such that, after
giving effect thereto, the Total Multicurrency Revolving Extensions of Credit
do not exceed the Total Multicurrency Revolving Commitments, together with
interest accrued to the date of such payment or prepayment on the principal so
prepaid if required hereby and any amounts payable under Section 4.11 in
connection therewith.  After prepaying
any Multicurrency Revolving Loans denominated in Dollars, the Borrower may in
lieu of prepaying Multicurrency Revolving Loans denominated in a Foreign
Currency in order to comply with this paragraph deposit amounts in the relevant
Foreign Currency or Foreign Currencies in a Cash Collateral Account in
accordance with the next succeeding sentence equal to the aggregate principal
amount of Multicurrency Revolving Loans denominated in a Foreign Currency
required to be prepaid.  To the extent
that after giving effect to any prepayment of Multicurrency Revolving Loans
required by this paragraph, the Total Multicurrency Revolving Extensions of
Credit at such time exceed the Total Multicurrency Revolving Commitments at
such time, the Borrower shall, without 

 

45

 

notice or demand, immediately deposit in a
Cash Collateral Account upon terms reasonably satisfactory to the
Administrative Agent an amount equal to the amount by which Total Multicurrency
Revolving Extensions of Credit exceed the Total Multicurrency Revolving
Commitments.  The Administrative Agent
shall apply any cash deposited in the Cash Collateral Account (to the extent
thereof) to pay any Reimbursement Obligations which are or become due
thereafter and/or to repay Multicurrency Revolving Loans denominated in a
Foreign Currency at the end of the Interest Periods therefor; provided
that (x) the Administrative Agent shall release to the Borrower from time
to time such portion of the amount on deposit in the Cash Collateral Account to
the extent such amount is not required to be so deposited in order for the
Borrower to be in compliance with this paragraph and (y) the
Administrative Agent may so apply such cash at any time after the occurrence
and during the continuation of an Event of Default.  “Cash Collateral Account” means an
account specifically established by the Borrower with the Administrative Agent
for purposes of this Section 4.2 and hereby pledged to the Administrative
Agent and over which the Administrative Agent shall have exclusive dominion and
control, including the right of withdrawal for application in accordance with
this Section 4.2.

 

4.3.          Conversion and
Continuation Options.  (a)   The Borrower may elect from time to time to
convert Eurocurrency Loans denominated in Dollars to Base Rate Loans by giving
the Administrative Agent at least two Business Days’ prior irrevocable notice
of such election, provided that any such conversion of Eurocurrency
Loans denominated in Dollars may only be made on the last day of an Interest
Period with respect thereto.  The
Borrower may elect from time to time to convert Base Rate Loans to Eurocurrency
Loans denominated in Dollars by giving the Administrative Agent at least three
Business Days’ prior irrevocable notice of such election (which notice shall
specify the length of the initial Interest Period therefor), provided
that no Base Rate Loan under a particular Facility may be converted into a
Eurocurrency Loan denominated in Dollars when any Event of Default has occurred
and is continuing and the Administrative Agent or the Majority Facility Lenders
in respect of such Facility have determined in its or their sole discretion not
to permit such conversions.  Upon receipt
of any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.  Notwithstanding the
foregoing, the Borrower may not elect to convert the currency in which any Loan
is denominated.

 

(b)   Any Eurocurrency Loan may be continued as
such upon the expiration of the then current Interest Period with respect
thereto by the Borrower giving irrevocable notice to the Administrative Agent,
in accordance with the applicable provisions of the term “Interest Period” set
forth in Section 1.1, of the length of the next Interest Period to be
applicable to such Loans, provided that no Eurocurrency Loan denominated
in Dollars under a particular Facility may be continued as such when any Event
of Default has occurred and is continuing and the Administrative Agent has or
the Majority Facility Lenders in respect of such Facility have determined in
its or their sole discretion not to permit such continuations, and provided,
further, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Eurocurrency Loans denominated in
Dollars shall be automatically converted to Base Rate Loans on the last day of
such then expiring Interest Period and, if the Borrower shall fail to give such
notice of continuation of a Multicurrency Revolving Loan denominated in a
Foreign Currency, such Multicurrency Revolving Loan denominated in a Foreign
Currency shall be automatically 

 

46

 

continued for an Interest Period of one
month.  Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender thereof.

 

4.4.          Limitations on
Eurocurrency Tranches.  Notwithstanding anything to the contrary
in this Agreement, all borrowings, conversions and continuations of
Eurocurrency Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, (a) after
giving effect thereto, the aggregate principal amount of the Eurocurrency Loans
comprising each Eurocurrency Tranche shall be equal to $3,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than fifteen
Eurocurrency Tranches shall be outstanding at any one time.

 

4.5.          Interest Rates and
Payment Dates.  (a)   Each Eurocurrency Loan shall bear interest
for each day during each Interest Period with respect thereto at a rate per
annum equal to the Eurocurrency Rate determined for such day plus the
Applicable Margin.

 

(b)   Each Base Rate Loan shall bear interest at a
rate per annum equal to the Base Rate plus the Applicable Margin.

 

(c)  (i) If
all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to (x) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus
2% or (y) in the case of Reimbursement Obligations, the rate applicable to
Base Rate Loans under the relevant Revolving Facility plus 2%, and (ii) if
all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any fee or other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum equal to (A) the
rate then applicable to Base Rate Loans under the relevant Facility plus
2% (or, in the case of any such other amounts that do not relate to a
particular Facility, the rate then applicable to Base Rate Loans under the
relevant Revolving Facility plus 2%), in the case of amounts that are
owing in Dollars, or (B)(I) the rate then applicable to Eurocurrency Loans
in respect of the relevant Foreign Currency plus (II) 2%, in the
case of amounts owing that are denominated in Foreign Currencies, in each case,
with respect to clauses (i) and (ii) above, from the date of
such non-payment until such amount is paid in full (after as well as before
judgment).

 

(d)   Interest shall be payable in arrears on each
Interest Payment Date, provided that interest accruing pursuant to
paragraph (c) of this Section shall be payable from time to time
on demand.

 

4.6.          Computation of
Interest and Fees.  (a)   Interest and fees payable pursuant hereto
shall be calculated on the basis of a 360-day year for the actual days elapsed,
except that, with respect to Base Rate Loans the rate of interest on which is
calculated on the basis of the Prime Rate, the interest thereon shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed.  The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of each determination of a Eurocurrency Rate.  Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of 

 

47

 

business on the day on which such change
becomes effective.  The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of the effective date and the amount of each such change in interest rate.

 

(b)   Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error.  The Administrative Agent
shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 4.5(a).

 

4.7.          Inability to
Determine Interest Rate.  If prior to the first day of any
Interest Period:

 

(a)     the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower absent manifest error) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the Eurocurrency Rate for such Interest Period in
respect of Loans denominated in Dollars, or

 

(b)     the
Administrative Agent shall have received notice from the Majority Facility
Lenders in respect of the relevant Facility that the Eurocurrency Rate
determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such Interest
Period, or

 

(c)     the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower, absent manifest error) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurocurrency Rate for such Interest
Period in respect of any Foreign Currency (any such Foreign Currency is
referred to as an “Affected Foreign Currency”),

 

the Administrative Agent shall
give telecopy or telephonic notice thereof to the Borrower and the relevant
Lenders as soon as practicable thereafter. 
If such notice is given (x) pursuant to clause (a) or (b) of
this Section 4.7 in respect of Eurocurrency Loans denominated in Dollars,
then (i) any Eurocurrency Loans denominated in Dollars under the relevant
Facility requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans, (ii) any Loans under the relevant Facility that
were to have been converted on the first day of such Interest Period to
Eurocurrency Loans denominated in Dollars shall be continued as Base Rate Loans
and (iii) any outstanding Eurocurrency Loans denominated in Dollars under
the relevant Facility shall be converted, on the last day of the then-current
Interest Period, to Base Rate Loans and (y) in respect of any Multicurrency
Revolving Loans denominated in a Foreign Currency, then (i) any
Multicurrency Revolving Loans in an Affected Foreign Currency requested to be
made on the first day of such Interest Period shall not be made and (ii) any
outstanding Multicurrency Revolving Loans denominated in an Affected Foreign
Currency shall be due and payable on the first day of such Interest
Period.  Until such notice has been
withdrawn by the Administrative Agent, no further Eurocurrency Loans
denominated in Dollars under the relevant Facility or Multicurrency Revolving
Loans denominated in a Foreign Currency in an Affected Foreign 

 

48

 

Currency shall be made or
continued as such, nor shall the Borrower have the right to convert Loans under
the relevant Facility to Eurocurrency Loans.

 

4.8.          Pro Rata Treatment
and Payments.  (a)   Each borrowing by the Borrower from the
Lenders hereunder, each payment by the Borrower on account of any commitment
fee and any reduction of the Commitments of the Lenders shall be made pro
rata according to the respective Term Percentages, Dollar Revolving
Percentages or Multicurrency Revolving Percentages, as the case may be, of the
relevant Lenders.

 

(b)  Each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Term Loans shall be made pro  rata according
to the respective outstanding principal amounts of the Term Loans then held by
the Lenders.  The amount of each
principal prepayment of the Term Loans shall be applied to reduce the then
remaining installments of the Term Loans pro-rata based upon the then remaining
principal amount thereof.  Amounts repaid
or prepaid on account of the Term Loans may not be reborrowed.

 

(c)   Each payment (including each prepayment) by
the Borrower on account of principal of and interest on the Revolving Loans
under a Revolving Facility shall be made pro  rata according to
the respective outstanding principal amounts of the Revolving Loans under such
Revolving Facility then held by the Revolving Lenders under such Revolving
Facility.  Each payment in respect of
Reimbursement Obligations in respect of any Letter of Credit shall be made to
the Issuing Lender that issued such Letter of Credit.

 

(d)   All payments (including prepayments) to be
made by the Borrower hereunder, whether on account of principal, interest, fees
or otherwise, shall be made without setoff or counterclaim and shall be made
prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Funding Office, in
Dollars and in immediately available funds, except payments to be made directly
to an Issuing Lender or Swingline Lender as expressly provided herein and
except that payments pursuant to Sections 4.9, 4.10, 4.11 and 11.5 shall be
made directly to the Persons entitled thereto; provided that payments
made in a Foreign Currency shall be made prior to 12:00 Noon, local time in the
place of payment, on the due date thereof to the Administrative Agent at the
office of the Administrative Agent designated by the Administrative Agent from
time to time for payments made in such Foreign Currency.  All payments to be made by the Borrower
hereunder shall be made in Dollars; provided that (i) payments in
respect of the principal of or interest on any Multicurrency Revolving Loan
denominated in a Foreign Currency shall be made in such Foreign Currency, (ii) any
amounts payable under Section 4.9 or 4.11 in respect of any Multicurrency
Revolving Loan or Multicurrency Letter of Credit denominated in a Foreign
Currency shall be payable in such Foreign Currency if the certificate submitted
by the applicable Lender or Issuing Lender in respect of such amount specifies
such amount in such Foreign Currency and (iii) payments in respect of
Multicurrency Letters of Credit and Multicurrency L/C Obligations denominated
in a Foreign Currency may be made in such Foreign Currency to the extent
permitted by, and shall be made to the extent required by, the applicable
provisions of this Agreement.  The
Administrative Agent shall distribute such payments received by it for the
account of any other Person to the appropriate recipient promptly upon receipt
in like funds as received.  If any
payment hereunder (other than payments on the Eurocurrency Loans) becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next 

 

49

 

succeeding Business Day.  If any payment on a Eurocurrency Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business
Day.  In the case of any extension of any
payment of principal pursuant to the preceding two sentences, interest thereon
shall be payable at the then applicable rate during such extension.

 

(e)   The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and
no Lender shall be responsible for any other Lender’s failure to make Loans as
required.  Unless the Administrative
Agent shall have been notified in writing by any Lender prior to a borrowing
that such Lender will not make the amount that would constitute its share of
such borrowing available to the Administrative Agent, the Administrative Agent
may assume that such Lender is making such amount available to the
Administrative Agent, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon (i) in the case of Loans denominated in Dollars, at the
greater of (A) a rate equal to the daily average Federal Funds Effective
Rate and (B) a rate determined by the Administrative Agent in accordance
with banking industry rates on interbank compensation for the period until such
Lender makes such amount immediately available to the Administrative Agent and (ii) in
the case of Multicurrency Revolving Loans denominated in a Foreign Currency, at
a rate per annum reasonably determined by the Administrative Agent to be the
cost to it of funding such amount for the period until such Lender makes such
amount immediately available to the Administrative Agent.  A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error.  If such Lender’s share of such borrowing is
not made available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Administrative Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to Base Rate Loans under the relevant Facility (or with respect to
Multicurrency Revolving Loans denominated in a Foreign Currency, at a rate per
annum reasonably determined by the Administrative Agent to be the cost to it of
funding such amount), on demand, from the Borrower.

 

(f)   Unless the Administrative Agent shall have
been notified in writing by the Borrower prior to the date of any payment due
to be made by the Borrower hereunder that the Borrower will not make such
payment to the Administrative Agent, the Administrative Agent may assume that
the Borrower is making such payment, and the Administrative Agent may, but
shall not be required to, in reliance upon such assumption, make available to
the Lenders under the relevant Facility or the Issuing Lender their respective pro
rata shares of a corresponding amount. 
If such payment is not made to the Administrative Agent by the Borrower
within three Business Days after such due date, the Administrative Agent shall
be entitled to recover, on demand, from each Lender to which any amount which
was made available pursuant to the preceding sentence, such amount with
interest thereon (i) in the case of Loans denominated in Dollars, at the
greater of (A) the rate per annum equal to the daily average Federal Funds

 

50

 

Effective Rate and (B) a rate determined
by the Administrative Agent in accordance with banking industry rates on
interbank compensation and (ii) in the case of Multicurrency Revolving
Loans denominated in a Foreign Currency, at a rate per annum reasonably
determined by the Administrative Agent to be the cost to it of funding such
amount.  Nothing herein shall be deemed
to limit the rights of the Administrative Agent or any Lender against the
Borrower.

 

4.9.          Requirements of Law.  (a)  
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Lender or any
Issuing Lender with any request or directive (whether or not having the force
of law) from any central bank or other Governmental Authority made subsequent
to the Effective Date:

 

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

 

(ii)     shall
impose on such Lender or Issuing Lender any other condition;

 

and the result of any of the
foregoing is to increase the cost to such Lender or Issuing Lender, by an
amount that such Lender or Issuing Lender deems to be material, of making,
converting into, continuing or maintaining Eurocurrency Loans or issuing,
maintaining or participating in Letters of Credit, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender or Issuing Lender, upon its demand, any
additional amounts necessary to compensate such Lender or Issuing Lender for
such increased cost or reduced amount received or receivable.  If any Lender or Issuing Lender becomes
entitled to claim any additional amounts pursuant to this paragraph, it shall
promptly notify the Borrower (with a copy to the Administrative Agent) of the
event by reason of which it has become so entitled.

 

(b)   If any Lender or Issuing Lender shall have
determined that the adoption of or any change in any Requirement of Law
regarding capital adequacy or in the interpretation or application thereof or
compliance by such Lender or Issuing Lender or any corporation controlling such
Lender or Issuing Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the Effective Date shall have the effect of
reducing the rate of return on such Lender’s or Issuing Lender’s or such
corporation’s capital as a consequence of its obligations hereunder or under or
in respect of any Letter of Credit to a level below that which such Lender or
Issuing Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender’s or Issuing Lender’s
or such corporation’s policies with respect to capital adequacy) by an amount
deemed by such Lender or Issuing Lender to be material, then from time to time,
after submission by such Lender or Issuing Lender to the Borrower (with a copy
to the Administrative Agent) of a written request therefor, the Borrower shall
pay to such Lender or Issuing Lender such additional amount or amounts as will
compensate such Lender or Issuing Lender or such corporation for such
reduction.  Failure or delay on the part
of any Lender or Issuing Lender to demand compensation pursuant to this Section shall
not constitute a waiver of such Lender’s or Issuing Lender’s right to demand
such 

 

51

 

compensation; provided that the
Borrower shall not be required to compensate a Lender or Issuing Lender
pursuant to this paragraph for any amounts incurred more than six months prior
to the date that such Lender or Issuing Lender notifies the Borrower of such
Lender’s or Issuing Lender’s intention to claim compensation therefor; provided
further that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.

 

(c)   If any Governmental Authority of the
jurisdiction of any Foreign Currency (or any other jurisdiction in which the
funding operations of any Multicurrency Revolving Lender shall be conducted
with respect to such Foreign Currency) shall have in effect any reserve, liquid
asset or similar requirement with respect to any category of deposits or
liabilities customarily used to fund loans in such Foreign Currency, or by
reference to which interest rates applicable to loans in such Foreign Currency
are determined, and the result of such requirement shall be to increase the
cost to any Multicurrency Revolving Lender of making or maintaining any
Multicurrency Revolving Loan in such Foreign Currency, and such Multicurrency
Revolving Lender shall deliver to the Borrower a notice requesting compensation
under this paragraph, then the Borrower will pay to such Multicurrency
Revolving Lender on each Interest Payment Date with respect to each
Multicurrency Revolving Loan in such affected Foreign Currency an amount that
will compensate such Multicurrency Revolving Lender for such additional cost.

 

(d)   A certificate as to any additional amounts
payable pursuant to this Section submitted by any Lender or Issuing Lender
to the Borrower (with a copy to the Administrative Agent) setting forth the
basis of calculation of such additional amounts shall be conclusive in the
absence of manifest error.  The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.

 

(e)   Notwithstanding any other provision of this
Agreement, if, (i)(A) the adoption of any law, rule or regulation
after the Effective Date, (B) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the Effective Date or (C) compliance by any Multicurrency
Revolving Lender with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority made or issued after the
Effective Date, shall make it unlawful for any such Multicurrency Revolving
Lender to make or maintain any Multicurrency Revolving Loan denominated in a
Foreign Currency or to give effect to its obligations as contemplated hereby
with respect to any Multicurrency Revolving Loan denominated in a Foreign
Currency or (ii) there shall have occurred any change in national or
international financial, political or economic conditions (including the
imposition of or any change in exchange controls, but excluding conditions
otherwise covered by this Section 4.9) which would make it impracticable
for any Multicurrency Revolving Lenders to make or maintain Multicurrency
Revolving Loans denominated in the relevant Foreign Currency after the
Effective Date to, or for the account of, the Borrower, then:

 

(i)      by
written notice to the Borrower and to the Administrative Agent, such
Multicurrency Revolving Lender or Multicurrency Revolving Lenders may declare that
Multicurrency Revolving Loans denominated in the affected Foreign Currency will
not thereafter (for the duration of such unlawfulness) be made by such
Multicurrency Revolving Lender or Multicurrency Revolving Lenders hereunder (or
be continued for 

 

52

 

additional
Interest Periods), whereupon any request for a Multicurrency Revolving Loan
denominated in such Foreign Currency or to continue a Multicurrency Revolving
Loan denominated in such Foreign Currency, as the case may be, for an
additional Interest Period shall, as to such Multicurrency Revolving Lender or
Multicurrency Revolving Lenders only, be of no force and effect, unless such
declaration shall be subsequently withdrawn; and

 

(ii)     all
outstanding Multicurrency Revolving Loans denominated in the affected Foreign
Currency made by such Multicurrency Revolving Lender or Multicurrency Revolving
Lenders shall be repaid on the last day of the then current Interest Period
with respect thereto or, if earlier, the date on which the applicable notice
becomes effective.

 

(f)   For purposes of Section 4.9(e), a notice
to the Borrower by any Multicurrency Revolving Lender shall be effective as to
each Multicurrency Revolving Loan denominated in the affected Foreign Currency
made by such Multicurrency Revolving Lender, if lawful, on the last day of the
Interest Period currently applicable to such Multicurrency Revolving Loan
denominated in a Foreign Currency; in all other cases such notice shall be
effective on the date of receipt thereof by the Borrower.

 

4.10.        Taxes.  (a)  
Any and all payments made by or on behalf of the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding (i) net income taxes and franchise taxes (imposed in
lieu of net income taxes) imposed on any Agent or any Lender as a result of a
present or former connection between such Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document), (ii) taxes that are
attributable to the applicable Lender’s failure to comply with the requirements
of paragraph (d) or (e) of this Section and (iii) taxes
that are United States withholding taxes imposed on amounts payable to the
applicable Lender at the time such Lender becomes a party to this Agreement or
designates a new lending office, except to the extent that such Lender’s
assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such taxes pursuant to
this paragraph (all such taxes, levies, imposts, duties, charges, fees,
deductions or withholdings other than those described in clauses (i), (ii) or
(iii) above being referred to herein as the “Non-Excluded Taxes”).  If any Non-Excluded Taxes or Other Taxes are
required to be withheld from any amounts payable to any Agent or any Lender
hereunder, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement.

 

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

 

53

 

(c)   Whenever any Non-Excluded Taxes or Other
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account or for the
account of the relevant Agent or Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof.  If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts
or other required documentary evidence, the Borrower shall indemnify the Agents
and the Lenders for any incremental taxes, interest or penalties that may
become payable by any Agent or any Lender as a result of any such failure.

 

(d)   Each Lender (or Transferee) that is not a “U.S.
Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S.
Lender”) shall deliver to the Borrower and the Administrative Agent (or, in
the case of a Participant, to the Lender from which the related participation
shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN
or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption
from U.S. Federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of “portfolio interest”, a statement
substantially in the form of Exhibit G and a Form W-8BEN, or any
subsequent versions thereof or successors thereto, properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or a reduced
rate of, U.S. Federal withholding tax on all payments by the Borrower under
this Agreement and the other Loan Documents. 
Such forms shall be delivered by each Non-U.S. Lender on or before the
date it becomes a party to this Agreement (or, in the case of any Participant,
on or before the date such Participant purchases the related
participation).  In addition, each
Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.  Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.

 

(e)   Each Lender (or Transferee) that is entitled
to an exemption from or reduction of non-U.S. 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 or reasonably requested by the Borrower,
such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at a reduced
rate, provided that such Lender is legally entitled to complete, execute
and deliver such documentation and in such Lender’s judgment such completion,
execution or submission would not materially prejudice the legal position of
such Lender.

 

(f)   The agreements in this Section 4.10
shall survive the termination of this Agreement and the payment of the Loans
and all other amounts payable hereunder.

 

(g)   If any Lender or the Administrative Agent
determines, in its sole discretion, that it has received a refund attributable
to any Non-Excluded Taxes or Other Taxes paid by the 

 

54

 

Borrower or for which the Lender or the
Administrative Agent has received payment from the Borrower hereunder, such
Lender or the Administrative Agent, within 30 days of such receipt, shall
deliver to the Borrower the amount of such refund without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund); provided, however, that the Borrower agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to such Lender or the
Administrative Agent in the event that such Lender or the Administrative Agent
is required to repay such refund to such Governmental Authority.  In addition, upon a written request by the
Borrower, any Lender and the Administrative Agent shall timely execute and
deliver to the Borrower such certificates, forms or other documents which can
be reasonably furnished consistent with the facts to assist the Borrower in
applying for refunds of Non-Excluded Taxes or Other Taxes remitted hereunder, unless
to do so will unduly prejudice or cause undue hardship to such Lender or the
Administrative Agent (as determined in the sole discretion of such Lender or
the Administrative Agent).  This
paragraph shall not be construed to require any Lender or the Administrative
Agent to make available its tax returns (or any other information relating to
its taxes that it deems confidential) to the Borrower or any other Person.

 

4.11.        Indemnity.  The
Borrower agrees to indemnify each Lender and to hold each Lender harmless from
any loss or expense that such Lender may sustain or incur as a consequence of (a) default
by the Borrower in making a borrowing of, conversion into or continuation of
Eurocurrency Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (b) default by the
Borrower in making any prepayment of or conversion from Eurocurrency Loans
after the Borrower has given a notice thereof in accordance with the provisions
of this Agreement or (c) the making of a prepayment of Eurocurrency Loans
or the conversion of Eurocurrency Loans, in each case, on a day that is not the
last day of an Interest Period with respect thereto.  Such indemnification may include an amount
equal to the excess, if any, of (i) the amount of interest that would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of such Interest Period (or, in the case of
a failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the Applicable
Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurocurrency market.  A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. 
This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.

 

4.12.        Change of Lending
Office.  Each Lender agrees that, upon the occurrence of any
event giving rise to the operation of Section 4.9, 4.10(a) or 4.10(b) with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided that such designation
is made on terms that, in the sole judgment of such Lender, cause such Lender
and its lending office(s) to suffer no economic, legal or regulatory
disadvantage; provided  further, 

 

55

 

that nothing in this Section shall
affect or postpone any of the obligations of the Borrower or the rights of any
Lender pursuant to Section 4.9, 4.10(a) or 4.10(b).

 

4.13.        Replacement of Lenders.  The
Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 4.9, 4.10(a) or
4.10(b) or (b) defaults in its obligation to make Loans hereunder,
with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event
of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Lender shall have
taken no action under Section 4.12 so as to eliminate the continued need
for payment of amounts owing pursuant to Section 4.9, 4.10(a) or
4.10(b), (iv) the replacement financial institution shall purchase, at
par, all Loans and other amounts owing to such replaced Lender on or prior to
the date of replacement, (v) the Borrower shall be liable to such replaced
Lender under Section 4.11 if any Eurocurrency Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, if not
already a Lender, shall be reasonably satisfactory to the Administrative Agent
and (if the replaced Lender was a Revolving Lender) each Issuing Lender and (if
the replaced Lender was a Dollar Revolving Lender) the Swingline Lender, (vii) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 11.6, (viii) until such time as such
replacement shall be consummated, the Borrower shall pay all additional amounts
(if any) required pursuant to Section 4.9, 4.10(a) or 4.10(b), as the
case may be, and (ix) any such replacement shall not be deemed to be a
waiver of any rights that the Borrower, the Administrative Agent or any other
Lender shall have against the replaced Lender.

 

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

 

(b)   The Administrative Agent, on behalf of the
Borrower, shall maintain the Register pursuant to Section 11.6, and a
subaccount therein for each Lender, in which shall be recorded (i) the
amount of each Loan made hereunder and any Note evidencing such Loan, the Type
of such Loan and each 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) both the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each
Lender’s share thereof.

 

(c)   The entries made in the Register and the
accounts of each Lender maintained pursuant to Section 4.14(a) shall,
to the extent permitted by applicable law, be prima  facie
evidence of the existence and amounts of the obligations of the Borrower
therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Loans made to the Borrower by
such Lender in accordance with the terms of this Agreement.

 

(d)   The Borrower agrees that, upon the request by
any Lender (through the Administrative Agent), the Borrower will prepare,
execute and deliver to such Lender a 

 

56

 

promissory note of the Borrower payable to
the order of such Lender (or if requested by such Lender, to such Lender and
its registered assigns) and in a form approved by the Administrative Agent,
evidencing Loans made by such Lender.

 

4.15.        Illegality.  Notwithstanding
any other provision herein, if the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof shall make it unlawful
for any Lender to make or maintain Eurocurrency Loans as contemplated by this
Agreement, (a) the commitment of such Lender hereunder to make
Eurocurrency Loans, continue Eurocurrency Loans as such and convert Base Rate
Loans to Eurocurrency Loans shall forthwith be canceled and (b) such
Lender’s Loans then outstanding as Eurocurrency Loans, if any, shall be
converted automatically to Base Rate Loans (or, in the case of Multicurrency
Revolving Loans denominated in a Foreign Currency, be repaid) on the respective
last days of the then current Interest Periods with respect to such Loans or
within such earlier period as required by law. 
If any such conversion of a Eurocurrency Loan occurs on a day which is
not the last day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be required
pursuant to Section 4.11.

 

4.16.        Foreign Currency
Exchange Rate.  (a)  No later
than 1:00 P.M., London time, on each Calculation Date with respect to a
Foreign Currency, the Administrative Agent shall determine the Exchange Rate as
of such Calculation Date with respect to such Foreign Currency, provided
that, upon receipt of a Borrowing Request pursuant to Section 3.2 for a
borrowing of a Multicurrency Revolving Loan denominated in a Foreign Currency
or a request for a Letter of Credit denominated in a Foreign Currency pursuant
to Section 3.8, the Administrative Agent shall determine the Exchange Rate
with respect to the relevant Foreign Currency in accordance with the foregoing
(it being acknowledged and agreed that the Administrative Agent shall use such
Exchange Rate for the purposes of determining compliance with Section 3.1(a) or
3.7(a), as applicable, with respect to such Borrowing Request or
Application).  The Exchange Rates so
determined shall become effective on the first Business Day immediately
following the relevant Calculation Date (a “Reset Date”), shall remain
effective until the next succeeding Reset Date and shall for all purposes of
this Agreement (other than Section 4.7, 11.18 or any other provision
expressly requiring the use of a current Exchange Rate) be the Exchange Rates
employed in converting any amounts between Dollars and Foreign Currencies.

 

(b)   No later than 5:00 P.M., London time, on
each Reset Date and each Borrowing Date with respect to Multicurrency Revolving
Loans denominated in a Foreign Currency, the Administrative Agent shall determine
the aggregate amount of the Dollar Equivalents of the principal amounts of the
Multicurrency Revolving Loans denominated in a Foreign Currency then
outstanding (after giving effect to any Multicurrency Revolving Loans
denominated in a Foreign Currency to be made or repaid on such date and the
aggregate amount of the L/C Obligations then outstanding).

 

(c)   The Administrative Agent shall promptly
notify the Borrower of each determination of an Exchange Rate hereunder.

 

4.17.        Incremental Facilities.  The Borrower may at any time or from time to
time after the Effective Date, by notice to the Administrative Agent, request
one or more 

 

57

 

additional tranches of term loans (the “Incremental
Term Loans”) or request an increase in the commitments under either or both
of the Revolving Facilities (“Revolving Commitment Increases”, together
with the Incremental Term Loans, the “Incremental Facilities”) or a
combination thereof; provided that (i) upon the effectiveness of
any Incremental Amendment referred to below, no Default or Event of Default
shall exist and, at the time that any such Incremental Facility is made (and
after giving effect thereto), no Default or Event of Default shall exist and (ii) Holdings
shall be in compliance with Section 8.1 as of the last day of the most
recently ended fiscal quarter of Holdings for which financial statements are
available at the time, determined on a Pro Forma Basis.  The Incremental Facilities shall rank pari
passu in right of payment and of security with the Revolving Loans and the Term
Loans.  The Incremental Term Loans (a) shall
not mature earlier than the Term Loan Maturity Date (but may, subject to clause
(b) below, have amortization prior to such date), (b) shall not have
a weighted average life that is shorter than the remaining weighted average
life of the Term Loans, and (c) except as set forth above, shall be
treated substantially the same as (and in any event no more favorably than) the
Term Loans (in each case, including with respect to mandatory and voluntary
prepayments and voting rights); provided that (i) the terms and
conditions applicable to Incremental Term Loans maturing after the Term Loan
Maturity Date may provide for material additional or different financial or
other covenants or prepayment requirements applicable only during periods after
the Term Loan Maturity Date and (ii) subject to clause (iii) below,
the Incremental Term Loans may be priced differently than the Term Loans, and (iii) if
the initial yield on such Incremental Term Loans (as determined by the
Administrative Agent to be equal to the sum of (x) the margin above the
Eurocurrency Rate on such Incremental Term Loans and (y) if such
Incremental Term Loans are initially made at a discount or the Lenders making
the same receive a fee directly or indirectly from the Borrower, Holdings or
any Subsidiary for doing so (the amount of such discount or fee, expressed as a
percentage of the Incremental Term Loans, being referred to herein as “OID”), the
amount of such OID divided by the lesser of (A) the average life to
maturity of such Incremental Term Loans and (B) four) exceeds by more than
0 basis points (the amount of such excess above 0 basis points being referred
to herein as the “Yield Differential”) the Applicable Rate then in effect for
Eurodollar Term Loans, then the Applicable Rate then in effect for Term Loans
shall automatically be increased by the Yield Differential, effective upon the
making of the Incremental Term Loans; provided that this clause (iii) shall
apply only with respect to Incremental Term Loans which are made on or prior to
December 31, 2008.  Each notice
shall set forth the requested amount and proposed terms of the relevant
Incremental Facilities.  Notwithstanding
anything to the contrary contained herein, the aggregate amount of the
Incremental Facilities established hereunder shall not exceed
$200,000,000.  Each existing Term Lender
shall be afforded the opportunity, but shall not be required, to provide a
ratable share of any Incremental Term Loan. 
Each existing Revolving Lender under a Revolving Facility shall be
afforded the opportunity, but shall not be required, to provide a ratable share
of any Revolving Commitment Increase with respect to such Revolving
Facility.  The Borrower may also arrange
for one or more banks or other financial institutions reasonably satisfactory
to the Administrative Agent (any such bank or other financial institution being
called an “Additional Lender”) to extend commitments to provide such
Incremental Facility.  Commitments in
respect of Incremental Facilities shall become Commitments under this Agreement
pursuant to an amendment (an “Incremental Amendment”) to this Agreement
and, as appropriate, the other Loan Documents, executed by the Borrower, each
Lender agreeing to provide such Commitment, if any, each Additional Lender, if
any, and the Administrative Agent.  

 

58

 

The Incremental Amendment may, without the
consent of any other Lenders, effect such amendments to this Agreement and the
other Loan Documents as may be necessary or appropriate, in the reasonable
opinion of the Administrative Agent, to effect the provisions of this
Section.  The effectiveness of any
Incremental Amendment shall be subject to the satisfaction on the date thereof
of each of the conditions set forth in Section 6.2 (it being understood
that all references to the date of “any extension of credit” in such Section 6.2
shall be deemed to refer to the effective date of such Incremental Amendment)
and such other conditions as the parties thereto shall agree.  No Lender shall be obligated to provide any
Incremental Facility, unless it so agrees.

 

SECTION 5.   REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the
Lenders to enter into this Agreement and to make the Loans and issue or
participate in the Letters of Credit, Holdings and the Borrower hereby
represent and warrant to each Agent and each Lender that:

 

5.1.          Financial Condition.  The audited
consolidated balance sheet of Holdings and its consolidated Subsidiaries as at December 31,
2007, and the related consolidated statements of income and of cash flows for
the fiscal year ended on such date, reported on by and accompanied by an
unqualified report from Deloitte & Touche LLP, present fairly the
consolidated financial condition of Holdings and its consolidated Subsidiaries
as at such date, and the consolidated results of its operations and its
consolidated cash flows for the fiscal year then ended.  All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein).  No Group Member has any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any long-term
leases or unusual forward or long-term commitments, including any interest rate
or foreign currency swap or exchange transaction or other obligation in respect
of derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph or disclosed in this Section 5.

 

5.2.          No Change.  Since
December 31, 2007, there has been no development or event that has had or
could reasonably be expected to have a Material Adverse Effect.

 

5.3.          Corporate Existence;
Compliance with Law.  Each Group Member (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the
legal right, to own and operate its property, to lease the property it operates
as lessee and to conduct the business in which it is currently engaged, (c) is
duly qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, except to the extent that
the failure to so qualify could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect and (d) is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

5.4.          Power; Authorization;
Enforceable Obligations.  Each Loan Party has the power and
authority, and the legal right, to make, deliver and perform the Loan Documents
to 

 

59

 

which it is a party and, in the case of the
Borrower, to obtain extensions of credit hereunder.  Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this
Agreement.  No consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the extensions of
credit hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule 5.4, which
consents, authorizations, filings and notices have been obtained or made and
are in full force and effect and (ii) the filings referred to in Section 5.19.  Each Loan Document has been duly executed and
delivered on behalf of each Loan Party thereto. 
This Agreement constitutes, and each other Loan Document upon execution
will constitute, a legal, valid and binding obligation of each Loan Party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

5.5.          No Legal Bar.  The
execution, delivery and performance of this Agreement and the other Loan
Documents, the issuance of Letters of Credit, the borrowings hereunder and the
use of the proceeds thereof will not violate any Requirement of Law or any
Contractual Obligation of any Group Member and will not result in, or require,
the prepayment of any Indebtedness (other than as contemplated hereby) or the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents).  No Requirement of Law or Contractual
Obligation applicable to Holdings or any of its Subsidiaries could reasonably
be expected to have a Material Adverse Effect.

 

5.6.          Litigation.  Except
as described on Schedule 5.6, no litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of Holdings and the Borrower, threatened by or against any Group
Member or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby or (b) that could reasonably be expected to have a
Material Adverse Effect.

 

5.7.          No Default.  No
Group Member is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect.  No Default or Event of
Default has occurred and is continuing.

 

5.8.          Ownership of Property;
Liens.  Each Group Member has title in fee simple to, or a valid
leasehold interest in, all its real property material to its business, and, to
its knowledge, good title to, or a valid leasehold interest in, all its other
property, and none of such property is subject to any Lien except as permitted
by Section 8.3, and as set forth on Schedule B to each Title Policy.

 

5.9.          Intellectual Property.  Each
Group Member owns, or is licensed to use, all material Intellectual Property
necessary for the conduct of its business as currently conducted.  

 

60

 

No claim has been asserted and is pending by
any Person challenging or questioning the use of any Intellectual Property or
the validity or effectiveness of any Intellectual Property, nor does Holdings
or the Borrower know of any valid basis for any such claim, except such claims
that, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.  To the
knowledge of Holdings and the Borrower, the use of Intellectual Property by
each Group Member does not infringe on the rights of any Person in any material
respect.

 

5.10.        Taxes.  Each
Group Member has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority which have become due and
payable (other than any taxes the amount or validity of which are currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
relevant Group Member); no tax Lien has been filed, and, to the knowledge of
Holdings and the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.

 

5.11.        Federal Regulations.  No
part of the proceeds of any Loans, and no other extensions of credit hereunder,
will be used for “buying” or “carrying” any “margin stock” within the
respective meanings of each of the quoted terms under Regulation U as now
and from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. 
If requested by any Lender or the Administrative Agent, the Borrower
will furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1,
as applicable, referred to in Regulation U.

 

5.12.        Labor Matters.  Except
as, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect:  (a) there are no
strikes or other labor disputes against any Group Member pending or, to the
knowledge of Holdings and the Borrower, threatened; (b) hours worked by
and payment made to employees of each Group Member have not been in violation
of the Fair Labor Standards Act or any other applicable Requirement of Law
dealing with such matters; and (c) all payments due from any Group Member
on account of employee health and welfare insurance have been paid or accrued
as a liability on the books of the relevant Group Member.

 

5.13.        ERISA.  Except
as, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect:  (a) neither a
Reportable Event nor an “accumulated funding deficiency” (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during
the five-year period prior to the date on which this representation is made or
deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code; (b) no
termination of a Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period that would result in a
material liability; (c) the present value of all accrued benefits under
each Single Employer Plan (based on those assumptions used to fund such Plans)
did not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits by a material amount in relation to the
business of Holdings and the Subsidiaries; (d) neither Holdings, the 

 

61

 

Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan that has
resulted or could reasonably be expected to result in a material liability
under ERISA; and (e) no such Multiemployer Plan is in Reorganization or
Insolvent.

 

5.14.        Investment Company Act;
Other Regulations.  No Loan Party is an “investment company”, or
a company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended. 
No Loan Party is subject to regulation under any Requirement of Law
(other than Regulation X of the Board) that limits its ability to incur
Indebtedness.

 

5.15.        Subsidiaries.  Except
as disclosed to the Administrative Agent by the Borrower in writing from time
to time after the Effective Date, (a) Schedule 5.15(a) sets
forth the name and jurisdiction of incorporation of each Subsidiary and, as to
each such Subsidiary, the percentage of each class of Capital Stock owned by
any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options or other equity granted to employees, directors or other persons and
directors’ qualifying shares) of any nature relating to any Capital Stock
of  Holdings or any Subsidiary, except as
created by the Loan Documents or, as of the Effective Date, except as disclosed
on Schedule 5.15(b).

 

5.16.        [Reserved]

 

5.17.        Environmental Matters.  Except
as, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect:

 

(a)     the
facilities and properties currently owned, leased or operated by any Group
Member (the “Subject Properties”) and, to the knowledge of Holdings and
the Borrower, the facilities and properties formerly owned, leased or operated
by any Group Member do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could
reasonably be expected to give rise to liability under, any applicable
Environmental Law;

 

(b)     no
Group Member has received any written notice of, or is aware of, any violation,
alleged violation or non-compliance, request for information, claim or demand
liability or potential liability arising under or relating to any Environmental
Laws involving any Group Member (the “Business”), nor does Holdings or
the Borrower have knowledge or reason to believe that any such notice will be
received or is being threatened;

 

(c)     Materials
of Environmental Concern have not been transported or disposed of from the
Subject Properties in violation of, or in a manner or to a location that could
reasonably be expected to give rise to liability under, any applicable
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the Subject
Properties in violation of, or in a manner that could reasonably be expected to
give rise to liability under, any applicable Environmental Law;

 

62

 

(d)     no
judicial proceeding or governmental or administrative action is pending or, to the
knowledge of Holdings and the Borrower, threatened, under any Environmental Law
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law in either case, as to
which any Group Member is or, to the knowledge of Holdings and the Borrower,
will be named as a party;

 

(e)     there
has been no release or threat of release of Materials of Environmental Concern
at or from the Subject Properties, or arising from or related to the operations
of any Group Member in connection with the Subject Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner that
could reasonably be expected to give rise to liability under any applicable
Environmental Laws;

 

(f)      the
Subject Properties and all operations at the Subject Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no violation of any applicable
Environmental Law with respect to the Subject Properties or the Business; and

 

(g)     no
Group Member has assumed or retained any liability of any other Person under
Environmental Laws.

 

5.18.        Accuracy of
Information, etc.    No
statement or information contained in this Agreement, any other Loan Document,
the Confidential Information Memorandum or any other document, certificate or
statement furnished by or on behalf of any Loan Party to the Administrative
Agent or the Lenders, or any of them, for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished (or, in the case of the Confidential Information Memorandum,
as of the date of this Agreement), any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements contained
herein or therein not misleading.  The projections
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of Holdings and the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein
by a material amount.  There is no fact
known to any Loan Party that could reasonably be expected to have a Material
Adverse Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other
documents, certificates and statements furnished to the Administrative Agent
and the Lenders for use in connection with the transactions contemplated hereby
and by the other Loan Documents.

 

5.19.        Security Documents.  (a)  
The Guarantee and Collateral Agreement is effective to create in favor
of the Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof.  In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement, when stock
certificates representing such Pledged Stock have been delivered to the
Administrative Agent, together with proper endorsements executed in blank and
such other action has been 

 

63

 

taken with respect to Pledged Stock of
Foreign Subsidiaries as specified in the Guarantee and Collateral Agreement,
and in the case of the other Collateral described in the Guarantee and
Collateral Agreement, when financing statements specified on Schedule 5.19(a) have
been filed in the offices specified on Schedule 5.19(a), the Guarantee and
Collateral Agreement constitutes a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as security for the Obligations (as defined
in the Guarantee and Collateral Agreement), in each case prior and superior in
right to any other Person (except, in the case of Collateral other than Pledged
Stock, Liens permitted by Section 8.3).

 

(b)   Each Mortgage is effective to create in favor
of the Administrative Agent, for the benefit of the Lenders (as defined in the
Guarantee and Collateral Agreement), a legal, valid and enforceable Lien on the
Mortgaged Properties described therein and proceeds thereof, and when the
Mortgages are filed in the offices specified on Schedule 5.19(b), such
Mortgages shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in such Mortgaged Properties
and the proceeds thereof, as security for the Obligations (as defined in the
relevant Mortgage), in each case prior and superior in right to any other
Person, subject to the exceptions set forth on Schedule B to the applicable
Title Policy and the Liens permitted under Section 8.3.  Schedule 1.1(a) lists each parcel
of real property in the United States owned in fee simple by any Group Member
as of the Effective Date.

 

5.20.        Solvency.  Each
Loan Party is, and after giving effect to the Transactions and the incurrence
of all Indebtedness and obligations being incurred in connection herewith and
therewith will be and will continue to be, Solvent.

 

5.21.        Senior Indebtedness.  The
Obligations constitute “Guarantor Senior Debt” and “Designated Guarantor Senior
Debt” of the Borrower under and as defined in each Senior Subordinated
Securities Indenture.  The obligations of
each Subsidiary Guarantor under the Guarantee and Collateral Agreement
constitute “Guarantor Senior Debt” of such Subsidiary Guarantor under
and as defined in each Senior Subordinated Securities Indenture.  The obligations of Holdings under the
Guarantee and Collateral Agreement constitute “Senior Debt” and “Designated
Senior Debt” of Holdings under and as defined in each Senior Subordinated
Securities Indenture.

 

5.22.        Regulation H.  As
of the Effective Date, except as specified on Schedule 5.22, no Mortgage
encumbers improved real property that is located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards and in which flood insurance has been made available
under the National Flood Insurance Act of 1968.

 

5.23.        Material Contracts.  (a)  
As of the Effective Date, (i) each Material Contract is in full
force and effect and is a legal, valid and binding obligation of each party
thereto enforceable in accordance with its terms and (ii) no Group Member
is in default of any material provision of any Material Contract.

 

(b)   To the best knowledge of Holdings and the
Borrower, (i) there has been no default, breach or other violation of any
Material Contract and (ii) no Governmental Authority has any basis for
terminating any Material Contract other than customary termination provisions 

 

64

 

relating to convenience and other similar
provisions, except, in each case, as could not reasonably be expected to have a
Material Adverse Effect.

 

(c)   To the best knowledge of Holdings and the
Borrower, no Governmental Authority has delivered notice of or otherwise
demonstrated its intention to exercise its option to terminate a Material
Contract on the basis of clause (b)(ii) above between itself and any
of the Group Members, except for any such terminations that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

 

(d)   Schedule 5.23 sets forth each material
contract between any Group Member and any Governmental Authority in effect on
the Effective Date.

 

5.24.        Insurance.  Schedule 5.24
sets forth a description of all material insurance maintained by or on behalf
of the Group Members as of the Effective Date. 
As of the Effective Date, all premiums due and payable in respect of
such insurance have been paid.  Holdings
and the Borrower reasonably believe that the insurance maintained by or on
behalf of the Group Members is adequate.

 

SECTION 6.   CONDITIONS PRECEDENT

 

6.1.          Conditions to Initial
Extension of Credit.  The agreement of each Lender to make the
initial extension of credit requested to be made by it is subject to the
satisfaction, prior to or concurrently with the making of such extension of
credit on the Effective Date, of the following conditions precedent:

 

(a)     Credit
Agreement; Guarantee and Collateral Agreement.  The Administrative Agent shall have received (i) this
Agreement executed and delivered by each Agent, each Lender, Holdings and the
Borrower and (ii) the Guarantee and Collateral Agreement, executed and
delivered by the Borrower, Holdings and each other Guarantor.

 

(b)     Organization,
Existence, Good Standing, Authority, etc. 
The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of each Loan Party,
the authorization of the Transactions and any other legal matters relating to
the Loan Parties, the Loan Documents or the Transactions, all in form and
substance reasonably satisfactory to the Administrative Agent and its counsel.

 

(c)     Approvals.  All governmental and third-party approvals
(including landlords’ and other consents) necessary or advisable in connection
with the transactions contemplated hereby shall have been obtained and be in
full force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority that
would restrain, prevent or otherwise impose material adverse conditions on the
financing contemplated hereby.

 

(d)     Fees.  The Lenders and the Agents shall have
received all fees required to be paid in respect of this Agreement, and all
expenses for which invoices have been presented (including the reasonable fees
and expenses of legal counsel) that are required 

 

65

 

to be paid or
reimbursed pursuant to this Agreement, on or before the Effective Date.  All such amounts will be paid with proceeds
of Loans made on the Effective Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before the
Effective Date.

 

(e)     Closing
Certificates.  The Administrative
Agent shall have received (i) a certificate of each Loan Party, dated the
Effective Date, substantially in the form of Exhibit C-2, with appropriate
insertions and attachments and (ii) a certificate of the Borrower, dated
the Effective Date, certifying to the satisfaction of the conditions precedent
set forth in Section 6.2 substantially in the form of Exhibit C-1.

 

(f)      Legal
Opinions.  The Administrative Agent
shall have received the following executed legal opinions:

 

(i)            the
legal opinion of Kramer Levin Naftalis & Frankel LLP, counsel to the
Loan Parties, substantially in the form of Exhibit F-1;

 

(ii)           the
legal opinion of Ira H. Raphaelson, general counsel of Holdings and its
Subsidiaries, substantially in the form of Exhibit F-2; and

 

(iii)          the
legal opinion of local counsel in each of Connecticut and Georgia and of such
other special and local counsel as may be reasonably required by the
Administrative Agent, in each case in form and substance reasonably satisfactory
to the Administrative Agent.

 

Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.

 

(g)     Perfection
Certificate. The Administrative Agent shall have received a completed
Perfection Certificate dated the Effective Date and signed by an executive
officer or Responsible Officer of Holdings and the Borrower, together with all
attachments contemplated thereby, including the results of a search of the
Uniform Commercial Code (or equivalent) filings made with respect to the Loan
Parties in the jurisdictions contemplated by the Perfection Certificate and
copies of the financing statements (or similar documents) disclosed by such
search and evidence reasonably satisfactory to the Administrative Agent that
the Liens indicated by such financing statements (or similar documents) are
permitted by Section 8.3 or have been released.

 

(h)     Pledged
Stock; Stock Powers; Pledged Notes. 
The Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the Guarantee and
Collateral Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof and (ii) each promissory note (if any) pledged to the
Administrative Agent pursuant to the Guarantee and Collateral Agreement
endorsed (without recourse) in blank (or accompanied by an executed transfer
form in blank) by the pledgor thereof or such other action is taken with
respect to Pledged Stock of Foreign Subsidiaries as specified in the Guarantee
and Collateral Agreement.

 

66

 

(i)      Filings, Registrations
and Recordings.  The Administrative
Agent shall have received each document (including any Uniform Commercial Code
financing statement) required by the Security Documents or under law or
reasonably requested by the Administrative Agent to be filed, registered or
recorded in order to create in favor of the Administrative Agent, for the
benefit of the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect to
Liens expressly permitted by Section 8.3), and each such document shall be
in proper form for filing, registration or recordation.

 

(j)      Mortgages, etc.  (i)  The Administrative Agent shall have
received a Mortgage with respect to each Mortgaged Property, executed and
delivered by a duly authorized officer of each party thereto.

 

(ii)           The Administrative
Agent shall have received a Title Policy with respect to each Mortgaged
Property and the Mortgage with respect thereto. 
Each such Title Policy shall (A) ensure that the Mortgage insured
thereby is a valid first Lien on the relevant Mortgaged Property encumbered
thereby free and clear of all defects and encumbrances, except those permitted
by Section 8.3 and as disclosed therein, (B) name the Administrative
Agent for the benefit of the Lenders (as defined in the Guarantee and
Collateral Agreement) as the insured thereunder and (C) be in form and
substance reasonably satisfactory to the Administrative Agent.  The Administrative Agent shall have received
evidence reasonably satisfactory to it that all premiums in respect of each
such Title Policy, and all charges for mortgage recording tax and all related
expenses, if any, have been paid.  The
Administrative Agent shall have also received a copy of all recorded documents
referred to, or listed as exceptions to title in, each Title Policy referred to
in this subsection and a copy of all other documents affecting each Mortgaged
Property encumbered by a Mortgage as shall have been reasonably requested by
the Administrative Agent; notwithstanding the foregoing, within 60 days after
the Effective Date (subject to extension in the discretion of the
Administrative Agent) the Borrower will deliver to the Administrative Agent (i) a
survey with respect to the Property located at 54 College Avenue, 13 Maple
Street, 15 Maple Street (formerly 19 Maple Street) and 5 Ash Street,
Waterville, Maine (Kennebec County); (ii) an updated Title Policy with
respect to the Property located at 54 College Avenue, 13 Maple Street, 15 Maple
Street (formerly 19 Maple Street) and 5 Ash Street, Waterville, Maine (Kennebec
County), together with the deletion of the standard survey exception from
Schedule B of said Title Policy and the inclusion of all survey related
endorsements including address, assessments, contiguity, land same as survey,
public street access, restrictions, encroachments and minerals, tax lot and any
other endorsements reasonably requested by Administrative Agent; and (iii) a
zoning report with respect to the Property located at 1500 Bluegrass Lakes
Parkway, Alpharetta, Georgia (Forsyth County).

 

(k)     Insurance.  The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.24 and the
Guarantee and Collateral Agreement.

 

(l)      PATRIOT Act.  Each Lender shall have received all
documentation and other information required by bank regulatory authorities
under applicable “know-your-customer”

 

67

 

and anti-money
laundering rules and regulations, including, without limitation, the
United States PATRIOT Act, to the extent reasonably requested through the
Administrative Agent within a reasonable period of time prior to the Effective
Date.

 

(m)    Repayment of Existing
Credit Agreement.  Concurrently with
the initial funding of the Loans on the Effective Date, Holdings shall
effectuate the Existing Credit Agreement Repayment.

 

6.2.          Conditions to Each Extension of
Credit.  The agreement of each Lender to make any extension of
credit requested to be made by it on any date (including its initial extension
of credit), and of the Issuing Bank to issue, increase, renew or extend any
Letter of Credit, is subject to the satisfaction of the following conditions
precedent:

 

(a)  
Representations and Warranties. 
Each of the representations and warranties made by any Loan Party in or
pursuant to the Loan Documents shall be true and correct on and as of such date
as if made on and as of such date.

 

(b)  
No Default.  No Default or
Event of Default shall have occurred and be continuing on such date or after
giving effect to the extensions of credit requested to be made on such date.

 

Each borrowing
by and each issuance, increase, renewal or extension of a Letter of Credit for
the account of the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such borrowing, issuance, renewal,
extension or increase that the conditions contained in this Section 6.2
have been satisfied.

 

SECTION 7.   AFFIRMATIVE COVENANTS

 

Each of
Holdings and the Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any Loan or other amount
is owing to any Lender or Agent hereunder, Holdings and the Borrower shall and
shall cause each of their Subsidiaries to:

 

7.1.          Financial Statements.  Furnish
to the Administrative Agent for distribution to each Lender:

 

(a)     as soon as available, but
in any event within 90 days after the end of each fiscal year of  Holdings, a copy of the audited consolidated
balance sheet of Holdings and its consolidated Subsidiaries as at the end of
such year and the related audited consolidated statements of income and of cash
flows for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a “going concern” or like
qualification or exception, or qualification arising out of the scope of the
audit, by Deloitte & Touche LLP or other independent certified public
accountants of nationally recognized standing; and

 

(b)     as soon as available, but
in any event not later than 45 days after the end of each of the first
three quarterly periods of each fiscal year of Holdings, the unaudited 

 

68

 

consolidated
balance sheet of Holdings and its consolidated Subsidiaries as at the end of
such quarter and the related unaudited consolidated statements of income and of
cash flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer of Holdings as being
fairly stated in all material respects (subject to normal year-end audit
adjustments).

 

All such
financial statements shall be complete and correct in all material respects and
shall be prepared in reasonable detail and in accordance with GAAP.  Any financial statements required to be
delivered pursuant to this Section 7.1 and any financial statements or
reports required to be delivered pursuant to clause (f) of Section 7.2
shall be deemed to have been furnished to the Administrative Agent on the date
that (i) such financial statements or report (as applicable) is posted on
the Securities and Exchange Commission’s website at www.sec.gov or the website
for Holdings and (ii) the Administrative Agent has been provided written
notice of such posting.

 

7.2.          Certificates; Other Information.  Furnish
to the Administrative Agent for distribution to each Lender (or, in the case of
clause (h), to the relevant Lender):

 

(a)     concurrently with the
delivery of the financial statements referred to in Section 7.1(a), a
certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;

 

(b)     concurrently with the
delivery of any financial statements pursuant to Section 7.1, (i) a
certificate of a Responsible Officer of Holdings stating that, to the best of
each such Responsible Officer’s knowledge, each Loan Party during such period
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) a
Compliance Certificate containing all information and calculations necessary
for determining, on a consolidated basis, compliance by all Group Members with
the provisions of this Agreement referred to therein as of the last day of the
fiscal quarter or fiscal year of Holdings, as the case may be, and, if
applicable, for determining the Applicable Margins;

 

(c)     as soon as available, and
in any event no later than 45 days after the end of each fiscal year of
Holdings, a detailed consolidated budget for the following fiscal year (including
a projected consolidated balance sheet of Holdings and its Subsidiaries as of
the end of the following fiscal year, the related consolidated statements of
projected cash flow, projected changes in financial position and projected
income and a description of the underlying assumptions applicable thereto)
(collectively, the “Projections”), which Projections shall in each case
be accompanied by a certificate of a Responsible Officer of Holdings stating
that such Projections are based on reasonable estimates, information and
assumptions and that such Responsible Officer has no reason to believe that
such 

 

69

 

Projections
are incorrect in any material respect in light of the circumstances under which
such estimates and assumptions were made;

 

(d)     if at any time Holdings is
not required to file periodic reports with the SEC pursuant to Section 13
or 15(d) of the Exchange Act, within 90 days after the end of each
fiscal year of Holdings and within 45 days after the end of each other
fiscal quarter of Holdings, a narrative discussion and analysis of the
financial condition and results of operations of Holdings and its Subsidiaries
for such fiscal quarter and for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, as compared to the
comparable periods of the previous year;

 

(e)     no later than ten Business
Days prior to the effectiveness thereof, copies of substantially final drafts
of any proposed amendment, supplement, waiver or other modification with
respect to any Senior Subordinated Securities Indenture;

 

(f)      within five days after
the same are sent, copies of all financial statements and reports that Holdings
sends to the holders of any class of its debt securities or public equity
securities and, within five days after the same are filed, copies of all
financial statements and reports Holdings may make to, or file with, the SEC
(it being understood that such financial statements or reports may be furnished
as contemplated by the last sentence of Section 7.1);

 

(g)     if any Subsidiary
organized under the laws of any jurisdiction within the United States becomes
directly owned by a Foreign Subsidiary, prompt notice thereof, including
whether such Subsidiary is to be treated as a Foreign Subsidiary in accordance
with the proviso to the definition of the term “Domestic Subsidiary”; and

 

(h)     promptly, such additional
financial and other information as any Lender through the Administrative Agent
may from time to time reasonably request.

 

7.3.          Payment of Obligations.  Pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its material obligations of whatever nature
(including, for the avoidance of doubt, any tax obligations), except where the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the relevant Group Member.

 

7.4.          Maintenance of Existence;
Compliance.  (a)  (i)  Preserve,
renew and keep in full force and effect its corporate existence and (ii) take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 8.4 and except, in the case of
clause (ii) above, to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (b) comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

70

 

7.5.          Maintenance of Property; Insurance.  (a)  
Keep all Property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted and (b) maintain
with financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but
including in any event public liability, product liability and business
interruption) as are usually insured against in the same general area by
companies engaged in the same or a similar business.

 

7.6.          Inspection of Property; Books and
Records; Discussions.  (a)   Keep proper books of records and account in
which full, true and correct entries in conformity with GAAP and all material
Requirements of Law shall be made of all dealings and transactions in relation
to its business and activities and (b) permit representatives of any
Lender to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time during
regular business hours upon reasonable notice and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Group Members with responsible officers of the Group
Members and with their independent certified public accountants; provided
that, so long as no Default or Event of Default has occurred and is continuing,
such visits, inspections and examinations by any such Lender shall be
coordinated through the Administrative Agent and shall not exceed two visits
each year.

 

7.7.          Notices.  Promptly
give notice to the Administrative Agent and each Lender of:

 

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

 

(b)     any (i) default or
event of default under any Contractual Obligation of any Group Member of which
any Group Member has knowledge or notice or (ii) litigation, request for
information, investigation or proceeding that may exist at any time between any
Group Member and any Governmental Authority of which any Group Member has
knowledge or notice, which in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a Material
Adverse Effect;

 

(c)     any litigation or
proceeding affecting any Group Member of which any Group Member has knowledge
or notice (i) in which the amount involved is $20,000,000 or more and not
covered by insurance, (ii) in which injunctive or similar relief is
sought, which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect or (iii) which relates to any Loan Document;

 

(d)     the following events, as
soon as possible and in any event within 30 days after Holdings or the
Borrower knows thereof:  (i) the
occurrence of any Reportable Event with respect to any Single Employer Plan or
a Multiemployer Plan, a failure to make any required contribution to a Plan,
the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan, in
each case, if Holdings or the Borrower would reasonably be expected to incur
any material liabilities as a result of such event or (ii) the institution
of proceedings or the taking of any other action by the PBGC or Holdings or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect
to the 

 

71

 

withdrawal
from, or the termination, Reorganization or Insolvency of, any Plan if Holdings
or the Borrower could reasonably be expected to incur any material liabilities
as a result of any such event; and

 

(e)     any development or event
that has had or could reasonably be expected to have a Material Adverse Effect.

 

Each notice
pursuant to this Section 7.7 shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings or the relevant Subsidiary proposes to take
with respect thereto.

 

7.8.          Environmental Laws.  (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 to obtain and comply in all
material respects with and maintain, and use reasonable efforts to ensure that
all tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws.

 

(b)   Conduct and complete all investigations,
studies, sampling and testing, and all response, monitoring, remedial, removal
and other actions required under applicable Environmental Laws and promptly
comply in all respects with all orders and directives of all Governmental
Authorities regarding Environmental Laws; provided, however, that
Holdings and the Borrower shall not be deemed in violation of this clause (b) if
it promptly challenges any such order or directive of any Governmental
Authorities in a manner consistent with Environmental Laws and pursues such
challenge or challenges diligently and the pendency of such challenges, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

(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, or to
materially affect any real property owned, leased or operated by, any Group
Member; and take reasonable efforts to prevent any other person from
generating, using, treating, storing, releasing, disposing of, or otherwise
managing Hazardous Materials 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 or any offsite location to which any Group
Member sent Materials of Environmental Concern for disposal or treatment.

 

7.9.          Additional Collateral, etc.  (a)  
With respect to any property acquired after the Effective Date by
Holdings, the Borrower or any other Guarantor (other than (x) any property
described in paragraph (b), (c), (d) or (e) below, and (y) any
property subject to a Lien expressly permitted by Section 8.3(m) or
8.3(p)) as to which the Administrative Agent, for the benefit of the Lenders,
does not have a perfected Lien, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
or such other documents as the Administrative Agent reasonably deems necessary
or advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a security interest in such property and (ii) take all actions
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in such property,
including the filing of 

 

72

 

Uniform Commercial Code
financing statements in such jurisdictions reasonably as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.

 

(b)  With
respect to any fee interest in any real property having a value (together with
improvements thereof) of at least $1,000,000 acquired after the Effective Date
by the Borrower, Holdings or any other Guarantor (other than any such real property
subject to a Lien expressly permitted by Section 8.3(m)), including any
such real property owned by a new Subsidiary at the time it becomes subject to
the requirements of Section 7.9(c) below, promptly (i) execute
and deliver a first priority Mortgage, in favor of the Administrative Agent,
for the benefit of the Lenders, covering such real property, (ii) if
requested by the Administrative Agent, provide the Lenders with (x) title
insurance covering such real property in an amount at least equal to the
purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor’s certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such Mortgage, each of the foregoing in
form and substance reasonably satisfactory to the Administrative Agent and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.

 

(c)  With
respect to any new Subsidiary (other than a Foreign Subsidiary or a non-Wholly
Owned Subsidiary) created or acquired after the Effective Date (which, for the
purposes of this paragraph (c), shall include (A) any existing
Subsidiary that ceases to be a Foreign Subsidiary, (B) any non-Wholly
Owned Subsidiary that becomes a Wholly Owned Subsidiary and (C) any
Foreign Subsidiary or non-Wholly Owned Subsidiary that provides a guarantee of
any Indebtedness (other than the Loans) of the Borrower, Holdings or any other
Guarantor that is a Domestic Subsidiary if the aggregate principal amount of
all such Indebtedness of the Borrower, Holdings and other Guarantors guaranteed
by such Subsidiary exceeds $5,000,000), promptly (i) execute and deliver
to the Administrative Agent such amendments or supplements to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable
to grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by the Borrower, Holdings or any other Guarantor, (ii) deliver
to the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the relevant Group Member or take such other action with
respect to Pledged Stock of Foreign Subsidiaries necessary to perfect the first
priority security interest of the Administrative Agent in such Pledged Stock, (iii) cause
such new Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement, (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Lenders a perfected first priority
security interest in the Collateral described in the Guarantee and Collateral
Agreement owned by such new Subsidiary, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement or by law or as may be requested by
the Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in the form of Exhibit C,
with appropriate insertions and attachments, and (iv) if 

 

73

 

requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

 

(d)  With
respect to any Domestic Subsidiary that does not become a Subsidiary Guarantor
pursuant to Section 7.9(c), promptly (i) execute and deliver to the
Administrative Agent such amendments or supplements to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable
to grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such
Subsidiary that is owned by the Borrower or any Guarantor, (ii) deliver to
the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the relevant Group Member, as the case may be, and take
such other action as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the Administrative Agent’s security interest
therein, and (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.

 

(e)   With respect to any Foreign Subsidiary,
promptly (i) execute and deliver to the Administrative Agent such
amendments or supplements to the Guarantee and Collateral Agreement as the
Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such Subsidiary that is
directly owned by the Borrower or any Guarantor (provided that in no
event shall more than 65% of the total outstanding voting Capital Stock of any
such Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or relevant Guarantor, or take such other
action with respect to Pledged Stock of Foreign Subsidiaries necessary to
perfect the first priority security interest of the Administrative Agent in
such Pledged Stock, as the case may be, and take such other action as may be
necessary or, in the reasonable opinion of the Administrative Agent, desirable to
perfect the Administrative Agent’s security interest therein, and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.

 

(f)   With respect to any Intellectual Property,
acquired by the Borrower or any Guarantor that is not identified on the
Perfection Certificate delivered on the Effective Date, promptly (i) notify
the Administrative Agent of such Intellectual Property, (ii) execute and
deliver to the Administrative Agent such amendments or supplements to the
Guarantee and Collateral Agreement or such other documents as shall be
necessary or as the Administrative Agent reasonably requests to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such Intellectual Property and (iii) take all actions necessary or
reasonably requested by the Administrative Agent to perfect a first priority
security interest in such Intellectual Property.

 

7.10.        Further Assurances.  From
time to time execute and deliver, or cause to be executed and delivered, such
additional instruments, certificates or documents, and take all such 

 

74

 

actions, as the Administrative
Agent may reasonably request for the purposes of implementing or effectuating
the provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Lenders
with respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds thereof or with respect to any other property or
assets hereafter acquired by the Borrower or any Guarantor which may be deemed
to be part of the Collateral) pursuant hereto or thereto.  Upon the exercise by the Administrative Agent
or any Lender of any power, right, privilege or remedy pursuant to this
Agreement or the other Loan Documents which requires any consent, approval,
recording, qualification or authorization of any Governmental Authority,
Holdings and the Borrower will execute and deliver, or will cause the execution
and delivery of, all applications, certifications, instruments and other documents
and papers that the Administrative Agent or such Lenders may be required to
obtain from any Group Member for such governmental consent, approval,
recording, qualification or authorization.

 

7.11.        Use of Proceeds.  Use the proceeds of the Term Loans to effectuate
the Existing Credit Agreement Repayment, to pay fees and expenses related to
the Transactions and for general corporate purposes, including repurchases of
the Capital Stock of Holdings permitted pursuant to Section 8.6(b).  Use the proceeds of the Revolving Facilities
to effectuate the Existing Credit Agreement Repayment and for general corporate
purposes, including Permitted Acquisitions. 
Use the Letters of Credit to support obligations incurred by Holdings
and its Subsidiaries for general corporate purposes.

 

7.12.        [Intentionally Omitted.]

 

7.13.        [Intentionally Omitted.]

 

7.14.        Lease Amendment.  Holdings and the Borrower
will use commercially reasonable efforts to deliver to the Administrative
Agent, within 90 days after the Effective Date, an amendment to the Lease
Agreement dated as of August 1, 2004 (as amended) by and between the
Development Authority of Forsyth County and Scientific Games International, Inc.,
providing the Administrative Agent with the lender protections set forth in Section 10.3
of such Lease Agreement.

 

SECTION 8.  NEGATIVE COVENANTS

 

Each of
Holdings and the Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any Loan or other amount
is owing to any Lender or Agent hereunder, each of Holdings and the Borrower
shall not, and shall not permit any of their Subsidiaries to, directly or
indirectly:

 

8.1.          Financial Condition Covenants.

 

(a)  Consolidated
Leverage Ratio.  Permit the
Consolidated Leverage Ratio as at the last day of any fiscal quarter of
Holdings to exceed the ratio set forth below with respect to such fiscal
quarter or with respect to the period during which such fiscal quarter ends:

 

75

 

	
  Fiscal Quarter Ending

  	
   

  	
  Ratio

  	
   

  
	
  June 30,
  2008 through December 31, 2009

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  March 31,
  2010 and thereafter

  	
   

  	
  4.00 to 1.00

  	
   

  

 

(b) 
[Intentionally Omitted.]

 

(c)  Consolidated
Senior Debt Ratio.  Permit the
Consolidated Senior Debt Ratio as at the last day of any fiscal quarter of
Holdings to exceed 2.50 to 1.00.

 

(d)  Consolidated
Interest Coverage Ratio.  Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of Holdings to be less than 3.50 to 1.00.

 

8.2.          Indebtedness.  Create,
issue, incur, assume, become liable in respect of or suffer to exist any
Indebtedness, except:

 

(a)     Indebtedness of any Loan
Party pursuant to any Loan Document;

 

(b)     Indebtedness (i) of
Holdings to any Subsidiary, (ii) of the Borrower or any Subsidiary
Guarantor to Holdings or any other Subsidiary, (iii) of any Non-Guarantor
Subsidiary to any other Non-Guarantor Subsidiary and (iv) subject to Section 8.8(j),
of any Non-Guarantor Subsidiary to the Borrower or any Guarantor;

 

(c)     Guarantee Obligations
incurred in the ordinary course of business by Holdings or any of its
Subsidiaries of obligations of any Loan Party and, subject to Section 8.8(j),
of any Non-Guarantor Subsidiary;

 

(d)     Indebtedness outstanding
on the Effective Date and listed on Schedule 8.2(d) and any
refinancings, refundings, renewals or extensions thereof (without increasing
the principal amount thereof, shortening the maturity thereof or decreasing the
weighted average life thereof);

 

(e)     Indebtedness of Holdings
or any Subsidiary incurred to finance the acquisition, construction or
improvement by it of any fixed or capital assets in the ordinary course of
business, including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof or result in an earlier maturity date or decreased weighted
average life thereof; provided that (A) such Indebtedness is
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement and (B) the aggregate principal amount of
Indebtedness permitted by this clause 8.2(e) shall not exceed
$75,000,000 at any time outstanding;

 

(f)      (i)   Indebtedness of Holdings in respect of (x) the
2004 Senior Subordinated Notes in an aggregate principal amount not to
exceed the principal amount thereof outstanding on the Effective Date and (y) the
Convertible Senior Subordinated 

 

76

 

Debentures in
an aggregate principal amount not to exceed the principal amount thereof
outstanding on the Effective Date and (ii) Guarantee Obligations of the
Borrower or any Subsidiary Guarantor in respect of such Indebtedness; provided
that such Guarantee Obligations are subordinated to the same extent as the
obligations of Holdings in respect of the related Senior Subordinated
Securities;

 

(g)     additional Indebtedness of
the Borrower or any of the Guarantors in an aggregate principal amount (for the
Borrower and all Guarantors) not to exceed $75,000,000 at any one time
outstanding;

 

(h)     additional Indebtedness of
Non-Guarantor Subsidiaries in an aggregate principal amount (for all such
Subsidiaries) not to exceed $100,000,000 at any one time outstanding, provided
that, any such Indebtedness that is recourse to (including pursuant to any
Guarantee Obligations of) any Loan Party shall be counted against the limit
imposed by the proviso to clause (j) of Section 8.8;

 

(i)      Indebtedness consisting
of indemnities relating to surety bonds issued in the ordinary course of
business;

 

(j)      unsecured obligations
pursuant to “earnout” provisions in respect of the Global Draw Acquisition, the
Racing Venue Acquisition, the Games Media Acquisition and Permitted
Acquisitions;

 

(k)     [Reserved];

 

(l)      Permitted Additional
Subordinated Debt;

 

(m)    Permitted Additional Senior
Indebtedness;

 

(n)     Indebtedness of any Person
that becomes a Subsidiary pursuant to a Permitted Acquisition after the
Effective Date, provided that such Indebtedness exists at the time such Person
becomes a Subsidiary and is not created in contemplation of or in connection
with such Person becoming a Subsidiary, provided further that (A) such
Indebtedness shall not be guaranteed by a guarantor that is not a guarantor of
such Indebtedness immediately prior to such Person becoming a Subsidiary and (B) the
aggregate principal amount of Indebtedness permitted by this clause (n) shall
not exceed $50,000,000 at any time outstanding and (ii) any refinancings,
refundings, renewals or extensions of such Indebtedness (without increasing the
principal amount thereof, shortening the maturity thereof or decreasing the
weighted average life thereof); and

 

(o)     (i) Indebtedness of
the Borrower in respect of the 2008 Senior Subordinated Notes in an aggregate
principal amount not to exceed the principal amount thereof originally issued
and (ii) Guarantee Obligations of any Guarantor in respect of such
Indebtedness; provided that such Guarantee Obligations are subordinated to the
same extent as the obligations of the Borrower in respect of the related Senior
Subordinated Securities.

 

77

 

8.3.          Liens.  Create,
incur, assume or suffer to exist any Lien upon any of its property, whether now
owned or hereafter acquired, except for:

 

(a)     Liens for taxes,
assessments, governmental charges or claims not yet due or that are being
contested in good faith by appropriate proceedings; provided that
adequate reserves with respect thereto are maintained on the books of Holdings
or its Subsidiaries, as the case may be, in conformity with GAAP;

 

(b)     carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s, statutory bank liens, rights of set-off
or other like Liens arising in the ordinary course of business that are not
overdue for a period of more than 30 days or that are being contested in
good faith by appropriate proceedings;

 

(c)     pledges or deposits in
connection with workers’ compensation, unemployment insurance and other social
security legislation and letters of credit issued in lieu of such deposits in
the ordinary course of business;

 

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

 

(e)     easements, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary course of
business that, in the aggregate, are not substantial in amount and that do not
in any case materially detract from the value of the property subject thereto
or materially interfere with the ordinary conduct of the business of Holdings
or any of its Subsidiaries;

 

(f)      attachment or judgment
Liens not constituting an Event of Default under Section 9; provided
that such Lien is released within 60 days after the entry thereof;

 

(g)     Liens in favor of customs
and revenue authorities to secure payment of customs duties in connection with
the importation of goods that are not overdue for a period of more than
30 days or that are being contested in good faith by appropriate
proceedings; provided that such Liens do not encumber any property other
than the goods subject to such customs duties;

 

(h)     zoning or similar laws or
rights reserved to or vested in any Governmental Authority to control or
regulate the use of any real property;

 

(i)      Liens securing obligations
(other than obligations representing Indebtedness for borrowed money) under
operating, reciprocal easement or similar agreements entered into in the
ordinary course of business of Holdings and its Subsidiaries;

 

(j)      licenses of Intellectual
Property granted by Holdings or any of its Subsidiaries which do not interfere
in any material respect with the ordinary conduct of the business of Holdings
or such Subsidiary;

 

78

 

(k)     Liens securing
Indebtedness of any Non-Guarantor Subsidiary permitted by Section 8.2(b)(iii) and
Section 8.2(h), to the extent such Lien does not at any time encumber any
property other than the property of such Non-Guarantor Subsidiary;

 

(l)      Liens in existence on the
Effective Date listed on Schedule 8.3(l), securing Indebtedness permitted
by Section 8.2(d); provided that no such Lien is spread to cover
any additional property after the Effective Date and that the amount of
Indebtedness secured thereby is not increased;

 

(m)    Liens on fixed or capital
assets acquired, constructed or improved by Holdings or any Subsidiary in the
ordinary course of business; provided that (i) such security
interests secure Indebtedness permitted by Section 8.2(e), (ii) such
security interests and the Indebtedness secured thereby are incurred prior to
or within 90 days after such acquisition or the completion of such construction
or improvement, and (iii) such security interests shall not apply to any
other property or assets of Holdings or any Subsidiary;

 

(n)     Liens created pursuant to
the Security Documents;

 

(o)     any interest or title of a
lessor under any lease entered into by Holdings or any Subsidiary in the
ordinary course of its business and covering only the assets so leased;

 

(p)     Liens securing
Indebtedness of the Borrower or any Guarantors incurred pursuant to Section 8.2(g) so
long as neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value (determined
as of the date such Lien is incurred) of the assets subject thereto exceeds (as
to Holdings and all Subsidiaries) $35,000,000 at any one time;

 

(q)     Liens in favor of surety
bond providers securing performance and indemnity obligations of the Group
Members to such providers in connection with surety bonds issued in the
ordinary course of business to support performance obligations (not including
Indebtedness) of such Group Members under contracts entered into in the
ordinary course of business (any such surety bond, a “Secured Surety Bond”);
provided that (i) to the extent that any such Lien becomes secured
and perfected on a first priority basis, Holdings or any of its Subsidiaries
shall cause, within 75 days after the date that is the earlier of (A) the
date that Holdings or any of its Subsidiaries becomes aware of a default under
a contract in respect of which a Secured Surety Bond has been issued or (B) the
date that Holdings or any of its Subsidiaries becomes aware that such Lien has
become so perfected, either (x) such Lien to be released or terminated or (y) such
Lien to be junior to the Liens created pursuant to the Security Documents on
terms and conditions reasonably satisfactory to the Administrative Agent and (ii) the
terms of any such Lien shall provide, at the time provision is made for the
granting of such Lien, that such Lien shall only become effective upon the
occurrence of a default in respect of the related contract for which a Secured
Surety Bond has been issued or a bankruptcy or similar event with respect to
the relevant Group Members;

 

79

 

(r)      any Lien existing on any
property or asset prior to the acquisition thereof by Holdings or any
Subsidiary or existing on any property or asset of any Person that becomes a
Subsidiary after the Effective Date prior to the time such Person becomes a
Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary, as the case may be, (ii) such Lien shall not apply to any
other property or assets of Holdings or any Subsidiary, (iii) such Lien
does not secure Indebtedness (other than Indebtedness permitted in Section 8.2
(n)) and (iv) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be (and, in the case of any such Liens securing
Indebtedness permitted by Section 8.2(n), any refinancings, refundings,
renewals or extensions thereof (without increasing the principal amount
thereof, shortening the maturity thereof or decreasing the weighted average
life thereof) permitted by such Section 8.2(n));

 

(s)     Liens in favor of the
holders of any Permitted Additional Senior Indebtedness or Senior Subordinated
Securities (or any trustee or agent therefor) on funds deposited pursuant to
any arrangement for defeasance or segregation of funds for the payment of such
Indebtedness in compliance with Section 8.9(a); and

 

(t)      Liens not otherwise
permitted by this Section so long as neither (i) the aggregate
outstanding principal amount of the obligations secured thereby nor (ii) the
aggregate fair market value (determined as of the date such Lien is incurred)
of the assets subject thereto exceeds (as to Holdings and all Subsidiaries)
$25,000,000 at any one time.

 

8.4.          Fundamental Changes.  Enter
into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or Dispose of all
or substantially all of its property or business, except that:

 

(a)     any Subsidiary (other than
the Borrower) of Holdings or the Borrower may be merged or consolidated with or
into Holdings or the Borrower (provided that Holdings or the Borrower,
as applicable,  shall be the continuing
or surviving Person) or with or into any Subsidiary Guarantor (provided
that a Subsidiary Guarantor shall be the continuing or surviving corporation)
or, subject to Section 8.8(j), with or into any Foreign Subsidiary or
Non-Guarantor Subsidiary; notwithstanding the foregoing, any Non-Guarantor
Subsidiary may be merged or consolidated with another Non-Guarantor Subsidiary
without limitation;

 

(b)     any Subsidiary of Holdings
(other than the Borrower) may Dispose of any or all of its assets (upon
voluntary liquidation or otherwise) (i) to the Borrower or any Guarantor
or, subject to Section 8.8(j), any Non-Guarantor Subsidiary or (ii) pursuant
to Dispositions permitted by clause (e) of Section 8.5;
notwithstanding the foregoing, any Non-Guarantor Subsidiary may Dispose of any
or all of its assets (upon voluntary liquidation or otherwise) to another
Non-Guarantor Subsidiary without limitation;

 

(c)     any Subsidiary (other than
the Borrower) may liquidate, wind up or dissolve after the Disposition of all
of its assets as set forth in Section 8.4(b); and

 

80

 

(d)     Holdings may liquidate,
wind up or dissolve the Peru Investments.

 

8.5.          Disposition of Property.  Dispose
of any of its Property, whether now owned or hereafter acquired, or, in the
case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital
Stock to any Person, except:

 

(a)     Dispositions of obsolete
or worn out Property in the ordinary course of business;

 

(b)     Dispositions of inventory
in the ordinary course of business;

 

(c)     Dispositions permitted by Section 8.4(b);

 

(d)     the sale or issuance of
any Subsidiary’s Capital Stock to the Borrower or any Guarantor;

 

(e)     (i) Dispositions of
other Property (other than any Disposition of less than all of the Capital
Stock of any Subsidiary then owned by the Group Members or any Disposition that
results in the Borrower ceasing to be a Wholly Owned Subsidiary of Holdings) or
(ii) Dispositions of minority interests in joint ventures or any
Non-Guarantor Subsidiary, having a fair market value (in the aggregate, for all
Dispositions pursuant to clauses (i) and (ii)) not to exceed $200,000,000
in the aggregate for all such Dispositions during the period commencing on the
Effective Date through the term of this Agreement, provided that (A) the
consideration received in any such Disposition shall be in an amount at least
equal to the fair market value of such Property, (B) at least 75% of the
consideration received in any such Disposition shall be in cash, provided
that (1) the amount of such consideration required to be paid in cash may
be reduced to 50% so long as the remaining portion of such consideration is
comprised of debt or equity securities of the acquiring Person and (2) the
amount of consideration received for Dispositions of Property having a fair
market value not to exceed $25,000,000 in the aggregate for all such
Dispositions during the period commencing on the Effective Date through the
term of this Agreement shall not be subject to this clause (B); provided
further that, notwithstanding the foregoing, the amount of consideration
received in a Disposition that is allocated by the Borrower against the limit
in clause (2) above shall be disregarded for purposes of determining
compliance with clause (1) above; and (C) the Net Cash Proceeds
of any such Dispositions shall be applied to prepay Term Loans to the extent
required pursuant to Section 4.2(c);

 

(f)      the sale or issuance of
any Non-Guarantor Subsidiary’s Capital Stock to any other Non-Guarantor
Subsidiary in compliance with any other applicable requirements of this
Agreement (including, to the extent applicable, Sections 8.8 and 8.10);
and

 

(g)     Dispositions of the Peru
Investments.

 

8.6.          Restricted Payments.  Declare
or make any Restricted Payment, except that:

 

81

 

(a)     any Subsidiary (including
the Borrower) may make Restricted Payments to the Borrower or any Guarantor;

 

(b)     Holdings may repurchase (x) shares
of its Capital Stock to the extent that such repurchase is deemed to occur upon
the exercise of stock options to acquire Holdings’s common stock or similar
arrangements to acquire common stock; provided that such repurchased
Capital Stock represent a portion of the exercise price thereof and provided,
further, that no cash is expended (or obligation to expend cash, other
than with respect to related withholding taxes, is incurred) by Holdings or any
of its Subsidiaries pursuant to this clause (x), (y) shares of
Holdings’s Capital Stock held by directors, executive officers, members of
management or employees of Holdings or any of its Subsidiaries upon the death,
disability, retirement or termination of employment of such directors,
executive officers, members of management or employees, so long as (1) immediately
prior to and after giving effect to such repurchase, no Default or Event of
Default shall have occurred or is continuing and (2) the aggregate amount
of cash expended by Holdings pursuant to this clause (y) does not
exceed $5,000,000 in any fiscal year of Holdings and (z) shares of
Holdings’s or any of its Subsidiary’s Capital Stock, so long as (1) immediately
prior to, and after giving effect to such repurchase, no Default or Event of
Default shall have occurred or is continuing, (2) Holdings is in
compliance with Section 8.1 as of the last day of the most recently ended
fiscal quarter of Holdings for which financial statements are available at the
time, determined on a Pro Forma Basis, (3) at the time of the
repurchase (and after giving effect thereto), there shall be remaining at least
$15,000,000 of Available Revolving Commitments and (4) the aggregate
amount expended for repurchases pursuant to this clause (z) shall not
exceed an amount equal to the sum of (i) $200,000,000 in the aggregate
during the period commencing on the Effective Date through the term of this
Agreement plus (ii) the then unused Permitted Expenditure Amount at the
time of the relevant repurchase; provided that, if any repurchase is to
be made pursuant to this clause (z), such repurchase shall not be permitted
based on sub-clause (ii) above (the Permitted Expenditure Amount)
unless the Consolidated Senior Debt Ratio on a Pro Forma Basis would be at
least 0.25 below the level required by Section 8.1(c) as of the end
of such fiscal quarter;

 

(c)     Holdings may make
Restricted Payments pursuant to and in accordance with the Hedge Agreements
permitted by clauses (c) and (d) of Section 8.16; provided that,
with respect to the Hedge Agreements permitted by clause (d) of Section 8.16,
the aggregate amount of all such Restricted Payments minus cash received
from counterparties to such Hedge Agreements upon entering into such Hedge
Agreements shall not exceed $40,000,000 during the period commencing on the
Effective Date through the term of this Agreement;

 

(d)     any Subsidiary may make
Restricted Payments ratably with respect to its Capital Stock; and

 

(e)     Holdings may make dividend
payments payable solely in its Capital Stock (other than Disqualified Stock).

 

82

 

8.7.          Payment Blockage Notice.  Give
any notice to block or prohibit payments in respect of any Senior Subordinated
Securities pursuant to the subordination provisions thereof, except with the
prior written consent of the Required Lenders.

 

8.8.          Investments.  Make
any advance, loan, extension of credit (by way of guaranty or otherwise) or
capital contribution to, or purchase any Capital Stock, bonds, notes,
debentures or other debt securities of, or any assets constituting a business
unit of, or make any other investment in, any Person (all of the foregoing, “Investments”),
except:

 

(a)     extensions of trade credit
in the ordinary course of business;

 

(b)     Investments in Cash
Equivalents;

 

(c)     Guarantee Obligations
permitted by Section 8.2;

 

(d)     loans and advances to
employees of any Group Member in the ordinary course of business (including for
travel, entertainment and relocation expenses) in an aggregate amount for all
Group Members not to exceed $2,000,000 at any one time outstanding;

 

(e)     Investments consisting of
Capital Expenditures otherwise permitted by this Agreement;

 

(f)      Investments outstanding
on the Effective Date and listed on Schedule 8.8(f);

 

(g)     Investments consisting of
non-cash consideration received by Holdings and its Subsidiaries in connection
with any Disposition of assets permitted under Section 8.5(e) in an
aggregate amount not to exceed $100,000,000 at any one time outstanding
(determined without regard to any write-downs or write-offs thereof);

 

(h)     Investments in assets
useful in the business of Holdings and its Subsidiaries (of the type described
in the definition of the term Reinvestment Notice) made by Holdings or any of
its Subsidiaries with the proceeds of any Reinvestment Deferred Amount, subject
to the limitations in clauses (j) and (k) of this Section in
the case of any such Investment in or by a Non-Guarantor Subsidiary with any
such proceeds received by the Borrower or a Guarantor;

 

(i)      intercompany Investments
by any Group Member in the Borrower or any Person that, prior to such
Investment, is a Guarantor; provided that such Investments shall be
subordinated to the Obligations in a manner reasonably satisfactory to the
Administrative Agent;

 

(j)      intercompany Investments
by Holdings or any of its Subsidiaries in any Person, that, prior to such
Investment, is a Non-Guarantor Subsidiary (including, without limitation,
Guarantee Obligations with respect to obligations of any such Non-Guarantor
Subsidiary, loans made to any such Non-Guarantor Subsidiary and Investments
resulting from mergers with or sales of assets to any such Non-Guarantor
Subsidiary); provided that the aggregate amount of all such Investments
(including, without limitation, all such 

 

83

 

Guarantee
Obligations) made by the Borrower and the Guarantors (excluding those permitted
by clause (k) below) valued at cost without giving effect to any
write-down or write-off of any such Investments, shall not exceed at any time
outstanding during the term of this Agreement the sum of (i) $200,000,000,
plus (ii) the amount of Capital Stock (other than Disqualified
Stock) issued by Holdings in exchange for such Investment, plus (iii) the
amount of Capital Stock (other than Disqualified Stock) of Holdings and
Permitted Additional Subordinated Debt issued to finance such Investment;

 

(k)     Investments consisting of
acquisitions of Capital Stock or assets pursuant to a Permitted Acquisition; provided
that (i) the aggregate amount of all such Investments in Non-Guarantor
Subsidiaries (excluding those (1) made with Capital Stock (other than
Disqualified Stock) of Holdings and (2) financed with the issuance of
Capital Stock (other than Disqualified Stock) of Holdings or Permitted
Additional Subordinated Debt) shall not exceed $250,000,000 at any time during
the period commencing on the Effective Date through the term of this Agreement,
and (ii) (A) immediately prior to and after giving effect to any such
Investment, no Default or Event of Default shall have occurred or is
continuing, (B) Holdings is in compliance with Section 8.1, as of the
last day of the most recently ended fiscal quarter of Holdings for which
financial statements are available at the time, determined on a Pro Forma
Basis, and (C) at the time of such Investment (and after giving effect
thereto), there shall be remaining at least $15,000,000 of Available Revolving
Commitments;

 

(l)      Investments in joint
ventures (other than pursuant to Section 8.8(j)) in an aggregate amount
not to exceed $75,000,000;

 

(m)    minority Investments in the
securities of any trade creditor, wholesaler, supplier or customer received
pursuant to any plan of reorganization or similar arrangement of such trade
creditor, wholesaler, supplier or customer, as applicable;

 

(n)     in addition to Investments
otherwise expressly permitted by this Section, Investments by Holdings or any
of its Subsidiaries in an aggregate amount (valued at cost, without giving
effect to any write-down or write-off of any such Investments) not to exceed
$25,000,000 during the period commencing on the Effective Date through the term
of this Agreement;

 

(o)     Investments that will fund
Supplemental Executive Retirement Plan liabilities as approved by the board of
directors of Holdings;

 

(p)     Investments made by a
deferred compensation plan for employees of Holdings and its Subsidiaries, to
the extent funded by contributions to such plan and permitted by the terms
thereof;

 

(q)     the Peru Investments;

 

(r)      to the extent
constituting Investments, the Hedge Agreements permitted by clauses (c) and
(d) of Section 8.16; and

 

84

 

(s)     to the extent constituting
Investments, the repurchase by Holdings of its Capital Stock pursuant to clause
(b) of Section 8.6.

 

8.9.          Payments and Modifications of
Certain Debt Instruments.  (a)  (i)  Make
or offer to make any optional or voluntary payment, prepayment, repurchase or
redemption of or otherwise optionally or voluntarily defease or segregate funds
with respect to the Permitted Additional Senior Indebtedness or Senior
Subordinated Securities; provided that the Borrower or any Guarantor may
make or offer to make a payment, prepayment, repurchase or redemption of or
otherwise optionally or voluntarily defease or segregate funds with respect to (1) the
Permitted Additional Senior Indebtedness to the extent permitted in clause (a) of
the definition of the term “Permitted Additional Senior Indebtedness”, (2) the
Permitted Additional Senior Indebtedness or the Senior Subordinated Securities
so long as (x) no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (y) as of the last day of the most
recently ended fiscal quarter of Holdings for which financial statements are available
at the time, the Consolidated Senior Debt Ratio on a Pro Forma Basis would be
at least 0.25 below the level required by Section 8.1(c) as of the
end of such fiscal quarter, and (z) at the time of such payment,
prepayment, repurchase or redemption or such optional or voluntary defeasance
or segregation of funds (and after giving effect thereto), as applicable, there
shall be remaining at least $15,000,000 of Available Revolving Commitments, or (3) the
Convertible Senior Subordinated Debentures or the Senior Subordinated Notes, in
each case with the Net Cash Proceeds of Permitted Refinancing Securities, (ii) amend,
modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of the Permitted
Additional Senior Indebtedness or the Senior Subordinated Securities (other
than any such amendment, modification, waiver or other change that (A) would
extend the maturity or reduce the amount of any payment of principal thereof or
reduce the rate or extend any date for payment of interest thereon or would
eliminate any covenant or make any covenant less restrictive and (B) does
not involve the payment of a consent fee) or (iii) designate any
Indebtedness (other than obligations of the Loan Parties pursuant to the Loan
Documents) as “Designated Senior Debt” (or any other defined term having
a similar purpose) for the purposes of any Senior Subordinated Securities
Indenture; provided that, notwithstanding clause (ii)(B) above,
the Borrower or any Guarantor may pay fees with respect to any amendment,
modification, waiver or other change to any of the terms of the Senior
Subordinated Securities so long as (x) no Default has occurred and is
continuing or would result therefrom and (y) the aggregate amount of all
such fees so paid does not exceed $10,000,000.

 

(b)  Make
any cash payment in respect of the principal amount of any Convertible Senior
Subordinated Debentures that are converted, unless (i) immediately prior
to and after giving effect to any such cash payment, no Default or Event of
Default shall have occurred or is continuing, (ii) Holdings is in
compliance with Section 8.1, as of the last day of the most recently ended
fiscal quarter of Holdings for which financial statements are available at the
time, determined on a Pro Forma Basis, and (iii) at the time of such cash
payment (and after giving effect thereto), there shall be remaining at least
$15,000,000 of Available Revolving Commitments.

 

8.10.        Transactions with Affiliates.  Enter
into any transaction, including any purchase, sale, lease or exchange of
property, the rendering of any service or the payment of any 

 

85

 

management, advisory or similar
fees, with any Affiliate (other than transactions between or among Loan
Parties) unless such transaction is (a) otherwise not prohibited by this
Agreement, and (b) upon fair and reasonable terms no less favorable to the
relevant Group Member, than it would obtain in a comparable arm’s length
transaction with a Person that is not an Affiliate; provided, however,
that the provisions of clause (b) of this Section 8.10 shall not
apply to any transaction (i) between a Non-Guarantor Subsidiary and any
other Non-Guarantor Subsidiary and (ii) between a Loan Party and any
Non-Guarantor Subsidiary to the extent such transaction is no less favorable to
such Loan Party than it would obtain in a comparable arm’s length transaction
with a Person that is not an Affiliate.

 

8.11.        Sales and Leasebacks.  Enter
into any arrangement with any Person providing for the leasing by any Group
Member of real or personal property that has been or is to be sold or
transferred by such Group Member to such Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of such Group Member, other than any such
arrangement (a) that (i) if such arrangement is a Capital Lease
Obligation, is permitted pursuant to Section 8.2(e), (ii) the
consideration received from such arrangement is (A) solely cash
consideration to the extent of the fair market value of any Collateral so sold
or transferred, as determined in good faith by Holdings’s board of directors
and (B) at least 75% in cash consideration to the extent of the fair
market value of the property (other than Collateral) so sold or transferred, as
determined in good faith by Holdings’s board of directors, provided that
prior consent of the board of directors shall be obtained if such fair market
value was determined to be in excess of $1,000,000 and (iii) the Net Cash
Proceeds derived from such arrangement shall be applied toward the prepayment
of the Term Loans as set forth in Section 4.2(c), without giving any
Reinvestment Notice or (b) between a Loan Party and another Loan Party or
between a Non-Guarantor Subsidiary and another Non-Guarantor Subsidiary.

 

8.12.        Changes in Fiscal Periods.  Permit
the fiscal year of Holdings to end on a day other than December 31 or
change Holdings’s method of determining fiscal quarters.

 

8.13.        Negative Pledge Clauses.  Enter
into or suffer to exist or become effective any agreement that prohibits or
limits the ability of any Group Member to create, incur, assume or suffer to
exist any Lien upon any of its property or revenues, whether now owned or
hereafter acquired, to secure its obligations under the Loan Documents to which
it is a party other than (a) this Agreement and the other Loan Documents, (b) any
agreements governing any Liens or Capital Lease Obligations otherwise permitted
under Sections 8.3(l), (m), (o) and (s), provided that, in each
case, any prohibition or limitation shall only be effective against the assets
subject to the applicable Lien, (c) to the extent existing on the
Effective Date, contracts with customers prohibiting Liens on any equipment
used in the performance of any such contracts set forth on Schedule 8.13(c), (d) to
the extent existing on the Effective Date, contracts with customers prohibiting
the assignment of such contracts or proceeds owing thereunder set forth on
Schedule 8.13(d), (e) to the extent contracts of the type described in
clause (c) or (d) hereof are entered into after the Effective
Date, any such contracts (and any renewals thereof) so long as the aggregate
value of the assets subject to such prohibitions, in each case as set forth on
the most recent consolidated balance sheet of Holdings and its consolidated
Subsidiaries in accordance with GAAP, shall not exceed 5% of the aggregate
value of all assets set forth on the most recent 

 

86

 

consolidated balance sheet of
Holdings and its consolidated Subsidiaries in accordance with GAAP and (f) any
agreements entered into in the ordinary course of business which contain
customary provisions restricting assignments of such agreements.

 

8.14.        Clauses Restricting Subsidiary
Distributions.  Enter into or suffer to exist or become effective
any consensual encumbrance or restriction on the ability of any Subsidiary of
Holdings to (a) make Restricted Payments in respect of any Capital Stock
of such Subsidiary held by, or pay any Indebtedness owed to, Holdings or any
other Subsidiary of Holdings, (b) make loans or advances to, or other
Investments in, Holdings or any other Subsidiary of Holdings or (c) transfer
any of its assets to Holdings or any other Subsidiary of Holdings, except for
such encumbrances or restrictions existing under or by reason of (i) any
restrictions existing under the Loan Documents and (ii) any restrictions
with respect to a Subsidiary imposed pursuant to an agreement that has been
entered into in connection with the Disposition of all or substantially all of
the Capital Stock or assets of such Subsidiary.

 

8.15.        Lines of Business.  Enter
into any business, either directly or through any Subsidiary, except for those
businesses in which Holdings and its Subsidiaries are engaged on the date of
this Agreement or that are reasonably related thereto and business utilizing
the same or similar technology.

 

8.16.        Hedge Agreements.  Enter
into any Hedge Agreement, except (a) Hedge Agreements entered into by
Holdings or the Borrower to hedge or mitigate risks to which Holdings or any
Subsidiary has actual exposure (other than those in respect of Capital Stock or
the Senior Subordinated Securities), (b) Hedge Agreements entered into in
order to effectively cap, collar or exchange interest or currency rates (from
fixed to floating rates, from one floating rate to another floating rate or
otherwise) with respect to any interest-bearing liability or investment of
Holdings or any Subsidiary (including any Senior Subordinated Securities); provided
that, at the time of and after giving effect to any such Hedge Agreement, at
least 40% of Consolidated Total Debt will be comprised of Indebtedness effectively
bearing interest at a fixed rate (taking into account the effect of all Hedge
Agreements, whether fixed to floating or floating to fixed), (c) the
Convertible Debentures Options Transactions, (d) Hedge Agreements entered
into in order to effectively hedge or mitigate risks associated with any
Permitted Additional Subordinated Debt that is convertible into Equity
Interests of Holdings, which Hedge Agreements are, other than with respect to
pricing terms, substantially similar to the Convertible Debentures Options
Transactions and (e) other Hedge Agreements entered into to hedge or
mitigate risks to which Holdings or any Subsidiary has exposure that do not
involve any risk of payment required to be made by Holdings or any Subsidiary
(other than any up-front payment made at the time such Hedge Agreement is
entered into).

 

SECTION 9.  EVENTS OF DEFAULT

 

If any of the
following events shall occur and be continuing:

 

(a)     the Borrower shall fail to
pay any principal of any Loan or Reimbursement Obligation when due in
accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan or Reimbursement Obligation, or any other amount payable 

 

87

 

hereunder or
under any other Loan Document, within five days after any such interest or
other amount becomes due in accordance with the terms hereof; or

 

(b)     any representation or
warranty made or deemed made by any Loan Party herein or in any other Loan
Document or that is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been inaccurate
in any material respect on or as of the date made or deemed made; or

 

(c)     (i)  any Loan
Party shall default in the observance or performance of any agreement contained
in clause (i) or (ii) of Section 7.4(a) (with respect
to Holdings and the Borrower only), Section 7.7(a), Section 7.11 or Section 8
of this Agreement or Sections 5.5 or 5.7(b) of the Guarantee and
Collateral Agreement or (ii) an “Event of Default” under and as defined in
any Mortgage shall have occurred and be continuing; or

 

(d)     any Loan Party shall
default in the observance or performance of any other agreement contained in
this Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default
shall continue unremedied for a period of 30 days after notice to the
Borrower from the Administrative Agent or the Required Lenders; or

 

(e)     any Group Member (i) defaults
in making any payment of any principal of any Material Indebtedness (including
any Guarantee Obligation, but excluding the Loans) on the scheduled or original
due date with respect thereto; or (ii) defaults in making any payment of
any interest on any Material Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Material Indebtedness
was created; or (iii) defaults in the observance or performance of any
other agreement or condition relating to any Material Indebtedness or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or beneficiary of
Material Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, Material
Indebtedness to become due prior to its stated maturity or to become subject to
a mandatory offer to purchase by the obligor thereunder or (in the case of any
Material Indebtedness constituting a Guarantee Obligation) to become payable;
or

 

(f)      (i) any Group Member
shall commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part
of its assets, or any Group Member shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against any
Group Member any case, proceeding or other action of a nature referred to in
clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or 

 

88

 

(B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against any Group Member any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets that results
in the entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) any Group Member shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any
Group Member shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or

 

(g)     (i) any Person shall
engage in any “prohibited transaction” (as defined in Section 406 of ERISA
or Section 4975 of the Code) involving any Plan, (ii) any “accumulated
funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of the PBGC
or a Plan shall arise on the assets of Holdings, the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, or
(v) Holdings, the Borrower or any Commonly Controlled Entity shall, or in
the reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan; and in each case in clauses (i) through
(v) above, such event or condition, together with all other such events or
conditions, if any, would, in the reasonable judgment of the Required Lenders,
reasonably be expected to have a Material Adverse Effect; or

 

(h)     one or more judgments or
decrees shall be entered against any Group Member involving in the aggregate a
liability (not paid or fully covered by insurance as to which the relevant
insurance company has acknowledged coverage) of $20,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or

 

(i)      any of the Security
Documents shall cease, for any reason, to be in full force and effect, or any
Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien
created by any of the Security Documents shall cease to be enforceable and of
the same effect and priority purported to be created thereby; or

 

(j)      the guarantee contained
in Section 2 of the Guarantee and Collateral Agreement shall cease, for
any reason, to be in full force and effect or any Loan Party or any Affiliate
of any Loan Party shall so assert; or

 

(k)     (i) any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall
become, or obtain rights (whether by means or warrants, options or otherwise)
to become, 

 

89

 

the “beneficial
owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act),
directly or indirectly, of more than 35% of the outstanding common stock of
Holdings; (ii) the board of directors of Holdings shall cease to consist
of a majority of Continuing Directors; (iii) a Specified Change of Control
shall occur; or (iv) the Borrower shall cease to be a Wholly Owned Subsidiary
of Holdings; or

 

(l)      any Senior Subordinated
Securities or the guarantees thereof shall cease, for any reason, to be validly
subordinated to the Obligations, as provided in any Senior Subordinated
Securities Indenture, or any Loan Party, any Affiliate of any Loan Party, the
trustee in respect of such Senior Subordinated Securities or the holders of at
least 25% in aggregate principal amount of such Senior Subordinated Securities
shall so assert in writing; or

 

(m)    any Group Member defaults
in the observation or performance of any agreement or condition contained in
one or more contracts with respect to which Secured Surety Bonds have been
issued resulting in a notice or notices of claims submitted under the Secured
Surety Bonds and the aggregate amount of such claims exceed $20,000,000 at any
time outstanding and such defaults shall either (x) be continuing for a
period of 60 days or more or (y) have resulted in the provider of the
relevant Secured Surety Bonds taking any enforcement action in respect of the
Lien securing such Secured Surety Bond;

 

then, and in
any such event, (A) if such event is an Event of Default specified in
clause (i) or (ii) of paragraph (f) above with respect
to the Borrower, automatically the Commitments shall immediately terminate and
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder) shall
immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken:  (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Revolving Commitments to be terminated forthwith, whereupon the Revolving
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.  With
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit.  Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower hereunder and under the
other Loan Documents.  After all such

 

90

 

Letters of Credit shall have expired or been
fully drawn upon, all Reimbursement Obligations shall have been satisfied and
all other obligations of the Borrower hereunder and under the other Loan
Documents shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Borrower (or such other Person as
may be lawfully entitled thereto). 
Except as expressly provided above in this Section, presentment, demand,
protest and all other notices of any kind are hereby expressly waived by the
Borrower.

 

SECTION 10.   THE
AGENTS

 

10.1.        Appointment.  (a)   Each Lender and Issuing Lender hereby
irrevocably designates and appoints each Agent as the agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes such 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 delegated to such Agent
by the terms of this Agreement and the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall 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 any Agent.

 

(b)   The Issuing Lender shall act on behalf of the
Revolving Lenders with respect to Letters of Credit issued or made under this
Agreement and the documents associated therewith.  It is understood and agreed that the Issuing
Lender (i) shall have all of the benefits and immunities (x) provided
to the Agents in this Section 10 with respect to acts taken or omissions
suffered by the Issuing Lender in connection with Letters of Credit issued or
made under this Agreement and the documents associated therewith as fully as if
the term “Agents”, as used in this Section 10, included the Issuing Lender
with respect to such acts or omissions and (y) as additionally provided in
this Agreement and (ii) shall have all of the benefits of the provisions
of Section 10.7 as fully as if the term “Agents”, as used in Section 10.7,
included the Issuing Lender.

 

10.2.        Delegation of Duties.  Each 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.  Each Agent and any such agent or
attorney-in-fact may perform any and all of its duties and exercise its rights
and powers through their respective Related Parties.  No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.

 

10.3.        Exculpatory Provisions.  Neither any Agent
nor any of their respective Related Parties 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 

 

91

 

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.

 

10.4.        Reliance by Agents.  Each 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 such 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.  Each 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 Agents 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.

 

10.5.        Notice of Default.  No Agent shall be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless such Agent has received notice from a Lender 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 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 or any other instructing group of Lenders specified
by this Agreement); 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.

 

10.6.        Non-Reliance on Agents and Other Lenders.  Each
Lender expressly acknowledges that neither the Agents nor any of their
respective Related Parties 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 

 

92

 

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 Related Parties.

 

10.7.        Indemnification.  The Lenders agree to
indemnify each Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of 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, bad faith or willful misconduct.  The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.

 

10.8.        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.

 

93

 

10.9.        Successor Administrative Agent.  The
Administrative Agent may resign as Administrative Agent at any time upon notice
to the Lenders, the Issuing Lenders and the Borrower and may be removed at any
time by the Required Lenders. Upon the resignation or removal of the
Administrative Agent under this Agreement and the other Loan Documents, the
Required Lenders shall appoint a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 9(a) or
Section 9(f) 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 30 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent may, on behalf of the Lenders
and the Issuing Lenders, appoint a successor agent, which agent shall be a bank
organized and doing business under the laws of the United States or any state
thereof, subject to supervision or examination by any Federal or state
authority and having a total shareholder equity aggregating at least
$1,000,000,000 or an Affiliate of any such bank.  Upon the acceptance of its appointment as Administrative
Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. 
The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. 
After any retiring Administrative Agent’s resignation or removal as
Administrative Agent, the provisions of this Section 10 and Section 11.5
shall inure to its benefit and the benefit of its agents and their respective
Related Parties as to any actions taken or omitted to be taken by any of them
while it was acting under this Agreement and the other Loan Documents.

 

10.10.      Agents Generally.  Except
as expressly set forth herein, no Agent shall have any duties or
responsibilities hereunder in its capacity as such.

 

10.11.      Lead Arrangers and Syndication Agents.  Each
of the Lead Arrangers and the Syndication Agents, in its capacity as such,
shall have no duties or responsibilities, and shall incur no liability, under
this Agreement and other Loan Documents.

 

SECTION 11.  MISCELLANEOUS

 

11.1.        Amendments and Waivers.  (a)  Neither
this Agreement, any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the provisions of
this Section 11.1; provided that Incremental Amendments pursuant to
and in compliance with Section 4.17 shall not be subject to this Section 11.1.
The Required Lenders and each Loan Party to the relevant Loan Document may, or,
with the written consent of the Required Lenders, the Administrative Agent and
each Loan Party to the relevant Loan Document may, from time to time, (a) enter
into written amendments, consents, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding 

 

94

 

any provisions to this Agreement or the other
Loan Documents or changing in any manner the rights of the Lenders or of the
Loan Parties hereunder or thereunder or (b) waive, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement
or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) forgive the principal
amount of any Loan or L/C Disbursement or extend the final scheduled date of
maturity of any Loan, extend the scheduled date of any amortization payment in
respect of any Term Loan, extend the required date of reimbursement of any L/C
Disbursement, reduce the stated rate of any interest or fee payable hereunder
(except (x) in connection with the waiver of applicability of any
post-default increase in interest rates, which waiver shall be effective with
the consent of the Majority Facility Lenders of each adversely affected
Facility and (y) that any amendment or modification of defined terms used
in the financial covenants in this Agreement shall not constitute a reduction
in the rate of interest or fees for purposes of this clause (i)) or extend
the scheduled date of any payment thereof, or increase the amount or extend the
expiration date of any Lender’s Revolving Commitment under either Revolving
Facility, in each case without the written consent of each Lender directly affected
thereby; provided that this clause (i) shall not apply to any
amendment, modification or waiver of the Convertible Debentures Conditions,
Subordinated Notes Conditions or Liquidity Condition; (ii) eliminate or
reduce the voting rights of any Lender under this Section 11.1 without the
written consent of such Lender; (iii) reduce any percentage specified in
the definition of Required Lenders or any other provision of any Loan Document
(other than the definition of Majority Facility Lenders or Super Majority
Facility Lenders) specifying the number or percentage of Lenders required to
waive, modify or amend any rights thereunder or make any determination or grant
any consent thereunder, consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Collateral or release any
material guarantee under the Guarantee and Collateral Agreement or limit the
applicable Loan Party’s liability in respect of such guarantee, in each case
without the written consent of all Lenders; (iv) amend, modify or waive
any condition precedent to any extension of credit under a Revolving Facility
set forth in Section 6.2 (including in connection with any waiver of an
existing Default or Event of Default) without the written consent of the
Majority Facility Lenders with respect to such Revolving Facility; (v) amend,
modify or waive the pro rata requirements of Section 4.8(a), (b) or
(c) without the written consent of each Lender adversely affected thereby;
(vi) reduce the amount of Net Cash Proceeds required to be applied to
prepay Term Loans under this Agreement without the written consent of the
Majority Facility Lenders with respect to the Term Facility; (vii) reduce
the percentage specified in the definition of Majority Facility Lenders or
Super Majority Facility Lenders with respect to any Facility without the
written consent of all Lenders under such Facility; (viii) amend, modify
or waive any provision of Section 10 without the written consent of each
Agent adversely affected thereby; (ix) amend, modify or waive any
provision of Section 3.3 or 3.4 without the written consent of the
Swingline Lender; (x) amend, modify or waive the Convertible Debentures
Conditions, Subordinated Notes Conditions or Liquidity Condition in a manner
that affects any Facility, in each case without the written consent of the
Super Majority Facility Lenders in respect of such Facility, (xi) change
any 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 any Class differently
than those holding Loans of any other Class, without the written consent of
Lenders 

 

95

 

holding a majority in interest of the
outstanding Loans and unused Commitments of each affected Class; or
(xii) amend, modify or waive any provision of Sections 3.7 to 3.14
without the written consent of each Issuing Lender; provided, further,
that any waiver, amendment or modification of this Agreement that by its terms
affects the rights or duties under this Agreement of one Class of Lenders
(but not other Classes) may be effected by an agreement or agreements in
writing entered into by the Borrower and the requisite percentage in interest
of the affected Class of Lenders that would be required to consent thereto
under this Section if such Class of Lenders were the only Class of
Lenders hereunder at the time (a “Class Vote”).  Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the affected Lenders
and shall be binding upon the Loan Parties, the Lenders, the Agents and all
future holders of the Loans; provided that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Issuing Lender or the Swingline Lender without the prior written
consent of the Administrative Agent, the Issuing Lender or the Swingline
Lender, as the case may be.  In the case
of any waiver, the Loan Parties, the Lenders and the Agents shall be restored
to their former positions and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.  Notwithstanding the foregoing, any provision
of this Agreement may be amended by an agreement in writing entered into by
Holdings, the Borrower, the Required Lenders and the Administrative Agent (and,
if their rights or obligations are affected thereby, each Issuing Lender and
the Swingline Lender) if (i) by the terms of such agreement the Commitment
of each Lender not consenting to the amendment provided for therein shall
terminate upon the effectiveness of such amendment and (ii) at the time
such amendment becomes effective, each Lender not consenting thereto receives
payment in full of the principal of and interest accrued on each Loan made by
it and all other amounts owing to it or accrued for its account under this
Agreement.

 

(b)  In connection with
any proposed amendment, modification, waiver or termination (a “Proposed
Change”) requiring the consent of all Lenders or all Lenders directly
affected thereby, if the consent of the Required Lenders (in the case of a
Proposed Change affecting all Lenders or all Lenders directly affected thereby,
not limited to a particular Class) or the Majority Facility Lenders (in the
case of a Proposed Change affecting all Lenders or all directly affected
Lenders of a particular Class), to such Proposed Change is obtained, the
Borrower shall be permitted to replace any Lender whose consent is required but
is not obtained (any such Lender whose consent is not obtained being referred
to as a “Non-Consenting Lender”). 
The Borrower may, at its sole expense and effort, upon notice to such
Non-Consenting Lender and the Administrative Agent, require such Non-Consenting
Lender to assign and delegate (it being understood that all such Non-Consenting
Lenders have granted hereby to the Administrative Agent Power of Attorney to
assign and delegate on their behalf pursuant to this Agreement), without
recourse (in accordance with and subject to the restrictions contained in Section 11.6),
all its interests, rights and obligations under this Agreement (or, with
respect to a Class Vote, at the option of the Borrower, all such Lender’s
interests, rights and obligations with respect to the respective Class of
Loans) to an assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (i) the
Lender that is acting as the Administrative Agent is not a Non-Consenting
Lender, (ii) the Borrower shall have received the prior written consent of
the Administrative Agent, which 

 

96

 

consent shall not
unreasonably be withheld, (iii) such Non-Consenting Lender shall have
received payment of an amount equal to (x) at par, all Loans and
participations in LC Disbursements being assigned, accrued interest thereon,
accrued fees and all other amounts payable (other than any fee payable pursuant
to Section 4.11) to it with respect thereto from, the assignee (to the extent
of such outstanding principal and accrued interest and fees) and (y) all
other amounts owing hereunder to such Non-Consenting Lender, from the Borrower
(it being understood that, the Borrower shall be liable to such Non-Consenting
Lender under Section 4.11 if any Eurocurrency Loan owing to such
Non-Consenting Lender shall be purchased other than on the last day of the
Interest Period relating thereto), (iv) the Borrower or such assignee
shall have paid to the Administrative Agent the processing and recordation fee
specified in Section 11.6(b)(ii)(D) and (v) any such replacement
shall not be deemed to be a waiver of any rights that the Borrower, the
Administrative Agent or any other Lender shall have against the Non-Consenting
Lender. Notwithstanding anything to the contrary in this Agreement, the return
of the note held by such Non-Consenting Lender is not a condition to the
effectiveness of any assignment pursuant to this Section 11.1(b).

 

(c)  Notwithstanding
the foregoing, this Agreement may be amended (or amended and restated) with the
written consent of the Required Lenders, the Administrative Agent and the
Borrower (i) to add one or more additional credit facilities to this
Agreement and to permit the extensions of credit from time to time outstanding
thereunder and the accrued interest and fees in respect thereof to share
ratably in the benefits of this Agreement and the other Loan Documents with the
Term Loans and Revolving Extensions of Credit and the accrued interest and fees
in respect thereof and (ii) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders, Majority
Facility Lenders and (if applicable) Super Majority Facility Lenders.

 

(d)  In addition,
notwithstanding the foregoing, this Agreement may be amended with the written
consent of the Administrative Agent, the Borrower and the Lenders providing the
relevant Replacement Term Loans (as defined below) to permit the refinancing of
all outstanding Term Loans (“Refinanced Term Loans”) with a replacement
term loan tranche hereunder (“Replacement Term Loans”), provided
that (i) the aggregate principal amount of such Replacement Term Loans
shall not exceed the aggregate principal amount of such Refinanced Term Loans, (ii) the
Applicable Margin for such Replacement Term Loans shall not be higher than the
Applicable Margin for such Refinanced Term Loans, (iii) the weighted
average life to maturity of such Replacement Term Loans shall not be shorter
than the weighted average life to maturity of such Refinanced Term Loans at the
time of such refinancing and (iv) all other terms applicable to such
Replacement Term Loans shall be substantially identical to, or less favorable
to the Lenders providing such Replacement Term Loans than, those applicable to
such Refinanced Term Loans, except to the extent necessary to provide for
covenants and other terms applicable to any period after the latest final
maturity of the Term Loans in effect immediately prior to such refinancing.

 

11.2.        Notices.  (a) 
Except in the case of notices and other communications expressly permitted to
be given by telephone (and subject to paragraph (b) below), all notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to 

 

97

 

have been duly given or made when delivered,
or three Business Days after being deposited in the mail, postage prepaid, or,
in the case of telecopy notice, when received, addressed as follows in the case
of Holdings, the Borrower and the Agents, and as set forth in an Administrative
Questionnaire delivered to the Administrative Agent in the case of the Lenders,
or to such other address as may be hereafter notified by the respective parties
hereto:

 

(i)      to Holdings or the Borrower at 750
Lexington Avenue, New York, NY 10022, Attention of Robert C. Becker (Telecopy No. (212)
754-2372);

 

(ii)     if to the Administrative Agent, to JPMorgan
Chase Bank, N.A., 1111 Fannin, 10th Floor, Houston, TX  77002, Attention of Loan and Agency Services
Group (Telecopy No. (713) 750-2892), with a copy to (A) JPMorgan
Chase Bank, N.A., 277 Park Avenue, 2nd Floor, New York, NY 10172,
Attention of Ralph Totoonchie (Telecopy No. (917) 463-0120) and (B) in
the case of a Multicurrency Revolving Loan denominated in a Foreign Currency,
J. P. Morgan Europe Limited, 125 London Wall, London EC2Y 5AJ, Attention
of Agency Department, 9th Floor (Telecopy No. 44 207 777 2360)
(Telephone No. 44 207 777 0976);

 

(iii)    if to JPMorgan Chase Bank, N.A., as Issuing
Lender, to 4 New York Plaza, 4th Floor, New York, NY 10004, Attention of David
Gugliotta (Telecopy No. (212) 623-0806), with a copy to JPMorgan
Chase Bank, N.A., 277 Park Avenue, 2nd Floor, New York, New York 10172,
Attention of Ralph Totoonchie (Telecopy No. (917) 463-0120);

 

(iv)    if to the Swingline Lender, to JPMorgan
Chase Bank, N.A., 1111 Fannin, 10th Floor, Houston, TX  77002, Attention of Loan and Agency Services
Group (Telecopy No.: (713) 750-2892), with a copy to JPMorgan Chase Bank, N.A.,
277 Park Avenue, 3rd Floor, New York, NY 10172, Attention of Donald Shokrian
(Telecopy No.: (646) 534-0574); and

 

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

 

provided that any
notice, request or demand to or upon any Agent, any Issuing Lender or the
Lenders shall not be effective until received.

 

(b)   Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices pursuant to Sections 2, 3 and 4
unless otherwise agreed by the Administrative Agent and the applicable
Lender.  The Administrative Agent,
Holdings or the Borrower may, in their discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may
be limited to particular notices or communications.

 

11.3.        No Waiver; Cumulative Remedies.  No failure
to exercise and no delay in exercising, on the part of any Agent or any Lender,
any right, remedy, power or privilege 

 

98

 

hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers
and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges that would otherwise be provided by law.  No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by Section 11.1, and
then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. 
Without limiting the generality of the foregoing, the making of a Loan
or issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or any
Issuing Lender may have had notice or knowledge of such Default at the time.

 

11.4.        Survival.  All representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments 
delivered in connection with or pursuant to this Agreement or any other
Loan Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, any Issuing Lender or any Lender
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on
any Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not expired or terminated. 
The provisions of Sections 4.9, 4.10, 4.11, 11.5, 11.12(e) and Section 10
shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

 

11.5.        Payment of Expenses and Taxes.  The Borrower
agrees (a) to pay or reimburse the Administrative Agent and the Lead
Arranger and their respective Affiliates for all their respective reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, including the reasonable fees
and disbursements of counsel to such Agent and filing and recording fees and
expenses, with statements with respect to the foregoing to be submitted to the
Borrower prior to the Effective Date (in the case of amounts to be paid on the
Effective Date) and from time to time thereafter (not less frequently than
quarterly, if accrued and unbilled fees exceed $15,000) as such Agent shall
deem appropriate, (b) to pay or reimburse each Lender, Issuing Lender and
Agent and their respective Affiliates for all its costs and reasonable expenses
incurred in connection with the enforcement or preservation of any rights under
this Agreement, the other Loan Documents and any such other documents (in each
case including all costs and reasonable expenses incurred in connection with
any work-out, restructuring, forbearance or waiver providing relief to the Loan
Parties), including the fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each 

 

99

 

Lender and Issuing Lender and of counsel to
such Agent, provided that, the fees and disbursements of counsel to any
such Lender shall only be paid or reimbursed to the extent incurred in
connection with a Default or an Event of Default, (c) to pay, indemnify,
and hold each Lender, Issuing Lender and Agent and their respective Affiliates
harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, (d) to
pay or reimburse each Issuing Lender for all its reasonable out-of-pocket costs
and expenses incurred in connection with the conversion of any Multicurrency
Letter of Credit denominated in a Foreign Currency pursuant to the terms of
this Agreement, and (e) to pay, indemnify, and hold each Lender, Issuing
Lender and Agent and their respective officers, directors, employees,
affiliates, agents, trustees, advisors and controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (without regard to whether or not such
Indemnitee is a party hereto and irrespective of whether any of the foregoing
is initiated by a Loan Party or by a third party), with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and any such other documents, including any of the
foregoing relating to the use of proceeds of the Loans or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations or current or former properties of any Group Member or any of the
Properties and the reasonable fees and expenses of legal counsel in connection
with claims, actions, investigations, litigation, or proceedings by any
Indemnitee against any Loan Party under any Loan Document (all the foregoing in
this clause (e), collectively, the “Indemnified Liabilities”), provided
that the Borrower shall have no obligation hereunder to any Indemnitee with
respect to Indemnified Liabilities to the extent such Indemnified Liabilities
are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence, bad faith or willful
misconduct of such Indemnitee.  Without
limiting the foregoing, and to the extent permitted by applicable law, Holdings
and the Borrower agree not to assert and to cause their Subsidiaries not to
assert, and hereby waive and agree to cause their Subsidiaries to waive, all
rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, arising under or related to Environmental
Laws, that any of them may have by statute or otherwise against any Indemnitee,
except to the extent resulting from the gross negligence, bad faith or willful
misconduct of such Indemnitee.  All
amounts due under this Section 11.5 shall be payable not later than ten
days after written demand therefor. 
Statements payable by the Borrower pursuant to this Section 11.5
shall be submitted to Robert C. Becker (Telephone No.:  (212) 754-2233 and Telecopy No:  (212) 754-2372), at the address of the
Borrower set forth in Section 11.2, or to such other Person or address as
may be hereafter designated by the Borrower in a written notice to the
Administrative Agent.  The agreements in
this Section 11.5 shall survive repayment of the Loans and all other
amounts payable hereunder.

 

11.6.        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 

 

100

 

assigns permitted hereby (including any Affiliate
of any Issuing Lender 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.  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of any Issuing Lender that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Lenders and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

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

 

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

 

(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.

 

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

 

(A)    no assignment may be made
to an Ineligible Assignee;

 

(B)    except in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an
assignment of the entire remaining amount of the assigning Lender’s Commitment
or Loans of any Class, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 or, in the case of Term
Loans, $1,000,000, unless the Borrower and the Administrative Agent otherwise
consent; provided that no such consent of the Borrower shall be required
if an Event of Default has occurred and is continuing and Approved Funds shall
be aggregated for purposes of determining compliance with such minimum
assignment amount;

 

(C)    each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement, except that this
clause (C) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of one Facility;

 

101

 

(D)    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 to be
paid by the assignor or assignee; and

 

(E)     the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

For purposes of this Section 11.6, the
term “Approved Fund” has the following meaning:

 

“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
and that is administered or managed by, or has as its principal investment
advisor, a Lender, an Affiliate of a Lender or an entity or an Affiliate of an
entity that administers or manages a Lender or is the principal investment
advisor of a Lender.

 

(iii)    Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) of
this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, shall 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 4.9, 4.10, 4.11, 11.5 and 11.12(e)).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 11.6
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 in The City of New York a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans and 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 each of the Borrower, the Administrative Agent, the Issuing
Lender and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection
by the Borrower, any Issuing Lender and any Lender at any reasonable time and
from time to time upon reasonable prior notice.

 

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

 

102

 

be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this paragraph.

 

(c)  (i)  Any
Lender may, without the consent of the Borrower, the Administrative Agent, the
Issuing Lenders or the Swingline Lender, sell participations to one or more
banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (C) the Borrower, the Administrative
Agent, the Issuing Lenders 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 and (D) such Lender shall keep a list on
its books and records of such Participants. 
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce the Loan Documents and to approve any amendment, modification or waiver
of any provision of the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver (1) that
requires the consent of each Lender directly affected thereby pursuant to the
proviso to the second sentence of Section 11.1 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 4.9, 4.10 and 4.11 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 11.7 as
though it were a Lender, provided such Participant agrees to be subject to Section 11.7(a) as
though it were a Lender.

 

(ii)     A
Participant shall not be entitled to receive any greater payment under Section 4.9
or 4.10 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a
Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of Section 4.10
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section 4.10
as though it were a Lender.

 

(d)   Any Lender may, without the consent of the
Borrower or the Administrative Agent, 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 11.6(b).  The Borrower, each Lender and each Agent
hereby confirm that they will not institute against a Conduit Lender or join
any other Person in instituting against a Conduit 

 

103

 

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.

 

11.7.        Adjustments; Set-off. 
(a)   Except to the extent
that this Agreement expressly provides for payments to be allocated to a
particular Lender or to the Lenders under a particular Facility, if any Lender
(a “Benefitted Lender”) shall, at any time after the Loans and other
amounts payable hereunder shall immediately become due and payable pursuant to Section 9,
receive any payment of all or part of the Obligations owing to it, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in Section 9(f),
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, such Benefitted Lender shall purchase for cash from the
other Lenders a participating interest in such portion of the Obligations owing
to each such other Lender, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.

 

(b)   In addition to any rights and remedies of the
Lenders provided by law, each Lender shall have the right, without prior notice
to the Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon any amount becoming due and payable by
the Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall
not affect the validity of such setoff and application.

 

11.8.        Counterparts.  This Agreement may be
executed by one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.  Delivery of an executed signature page of
this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.  A
set of the copies of this Agreement signed by all the parties shall be lodged
with the Borrower and the Administrative Agent.

 

11.9.        Severability.  Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any 

 

104

 

such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

11.10.      Integration.  This
Agreement and the other Loan Documents represent the entire agreement of the
Borrower, the Agents and the Lenders with respect to the subject matter hereof
and thereof, and there are no promises, undertakings, representations or
warranties by any Agent or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.

 

11.11.      GOVERNING
LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

11.12.      Submission to Jurisdiction; Waivers.  Each
of Holdings and the Borrower hereby irrevocably and unconditionally:

 

(a)     submits for itself and its property in any
legal action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for the
Southern District of New York, and appellate courts from any thereof;

 

(b)     consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

 

(c)     agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
it at its address set forth in Section 11.2 or at such other address of
which the Administrative Agent shall have been notified pursuant hereto;

 

(d)     agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and

 

(e)     waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.

 

11.13.      Acknowledgments.  Each of
Holdings and the Borrower hereby acknowledges that:

 

(a)     it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;

 

105

 

(b)     no Agent, Issuing Lender or Lender has any
fiduciary relationship with or duty to Holdings or the Borrower arising out of
or in connection with this Agreement or any of the other Loan Documents, and
the relationship between the Agents, the Issuing Lender and Lenders, on one
hand, and Holdings and the Borrower, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor; and

 

(c)     no joint venture is created hereby or by
the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among Holdings and the Borrower and
the Lenders.

 

11.14.      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 11.1)
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 11.1 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 Hedge 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.

 

11.15.      Confidentiality.  Each
Agent, Issuing Lender and Lender agrees to keep confidential all non-public
information provided to it by any Loan Party pursuant to this Agreement that is
designated by such Loan Party as confidential; provided that nothing
herein shall prevent any Agent, Issuing Lender or any Lender from disclosing
any such information (a) to any Agent, any other Lender or any Lender
Affiliate, (b) subject to an agreement to comply with the provisions of
this Section, to any pledgee referred to in Section 11.6(d) or any
actual or prospective Transferee or any direct or indirect counterparty to any
Hedge Agreement (or any professional advisor to such counterparty), (c) to
its employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates, (d) upon the request or demand
of any Governmental Authority, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) that has been publicly
disclosed, (h) to the National Association of Insurance Commissioners or
any similar organization or any nationally recognized rating agency that
requires access to information about a Lender’s investment portfolio in
connection with ratings issued with respect to such Lender, or (i) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.  Any Person required to
maintain the confidentiality of information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the 

 

106

 

confidentiality of such information as such
Person would accord to its own confidential information.

 

11.16.      WAIVERS
OF JURY TRIAL.  HOLDINGS,
THE BORROWER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

11.17.      [Reserved]

 

11.18.      Conversion of Currencies.  (a)  If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing hereunder in one
currency into another currency, each party hereto agrees, to the fullest extent
that it may effectively do so, that the rate of exchange used shall be that at
which, in accordance with normal banking procedures in the relevant
jurisdiction, the first currency could be purchased with such other currency on
the Business Day immediately preceding the day on which final judgment is
given.

 

(b)   The obligations of the Borrower in respect of
any sum due to any party hereto or any holder of the obligations owing
hereunder (the “Applicable Creditor”) shall, notwithstanding any
judgment in a currency (the “Judgment Currency”) other than the currency
in which such sum is stated to be due hereunder (the “Agreement Currency”),
be discharged only to the extent that, on the Business Day following receipt by
the Applicable Creditor of any sum adjudged to be so due in the Judgment
Currency, the Applicable Creditor may in accordance with normal banking
procedures in the relevant jurisdiction purchase the Agreement Currency with
the Judgment Currency; if the amount of the Agreement Currency so purchased is
less than the sum originally due to the Applicable Creditor in the Agreement
Currency, the Borrower agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Applicable Creditor against such loss.  The obligations of the Borrower contained in
this Section 11.18 shall survive the termination of this Agreement and the
payment of all other amounts owing hereunder.

 

11.19.      Interest
Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan 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 in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.

 

107

 

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

 

 

	
   

  	
  SCIENTIFIC GAMES
  INTERNATIONAL, 

  INC.,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  DeWayne E. Laird

  
	
   

  	
   

  	
  Name:  DeWayne E. Laird

  
	
   

  	
   

  	
  Title:    Vice
  President

  

 

[Signature Page to Credit Agreement]

 

 

	
   

  	
  SCIENTIFIC GAMES
  CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  DeWayne E. Laird

  
	
   

  	
   

  	
  Name:  DeWayne E. Laird

  
	
   

  	
   

  	
  Title:    Vice
  President and Chief

  
	
   

  	
   

  	
                Financial Officer

  

 

[Signature Page to Credit Agreement]

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.,
  

  
	
   

  	
  individually and as Administrative
  Agent,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Donald S. Shokrian

  
	
   

  	
   

  	
  Name:  Donald S. Shokrian

  
	
   

  	
   

  	
  Title:     Managing Director

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, ANDJPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Bank of America, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Justin Lien

  
	
   

  	
   

  	
  Name:

  	
  Justin Lien

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT,
  DATED AS OF JUNE  9, 2008 AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE TIME TO TIME PARTIES HERETO, AND JPMORGAN
  CHASE 

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Allied Irish Banks, P.L.C

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Joseph
  Augustine

  
	
   

  	
   

  	
    Name:

  	
  Joseph Augustine

  
	
   

  	
   

  	
    Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Gregory J.
  Wiske

  
	
   

  	
   

  	
    Name:

  	
  Gregory J. Wiske

  
	
   

  	
   

  	
    Title:

  	
  Vice President

  

 

2

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  The Bank of East Asia
  Limited 

  New York Branch

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kenneth A. Pettis

  
	
   

  	
   

  	
  Name:

  	
  Kenneth
  A. Pettis

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kitty Sin

  
	
   

  	
   

  	
  Name:

  	
  Kitty
  Sin

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  The Governor and Company 

  of the Bank of Ireland

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Carl Androser

  
	
   

  	
   

  	
  Name:

  	
  Carl Androser

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Christopher L. Craley

  
	
   

  	
   

  	
  Name:

  	
   Christopher
  L. Craley

  
	
   

  	
   

  	
  Title:

  	
  Director

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  The Bank of Nova Scotia

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Todd S. Meller

  
	
   

  	
   

  	
  Name:

  	
  Todd S. Meller

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Bank of Tokyo – Mitsubishi
  UFJ

  Trust Company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Tarik Hussain

  
	
   

  	
   

  	
  Name:  Tarik Hussain

  
	
   

  	
   

  	
  Title:    Vice
  President

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Bayerische Hypo – und
  Vereinsbank 

  AG, New York Branch

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William W. Hunter

  
	
   

  	
   

  	
  Name:

  	
  William W. Hunter

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Miriam G. Trautmann

  
	
   

  	
   

  	
  Name:  Miriam G.
  Trautmann

  
	
   

  	
   

  	
  Title:   Director

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Bayerische Landesbank, New
  York 

  Branch

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Georgina Fiordalisi

  
	
   

  	
   

  	
  Name:  Georgina Fiordalisi, CFA

  
	
   

  	
   

  	
  Title:    Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Elke Videgain

  
	
   

  	
   

  	
  Name:  Elke Videgain

  
	
   

  	
   

  	
  Title:    Second
  Vice President

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Chang Hwa Commercial Bank,
  Ltd.

  New York Branch

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jim C.Y. Chen

  
	
   

  	
   

  	
  Name:  Jim C.Y. Chen

  
	
   

  	
   

  	
  Title:    VP
  & General Manager

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  CIT Bank 

  The CIT Group/Equipment Financing Inc.,

  as attorney-in-fact,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Andrew Giangrave

  
	
   

  	
   

  	
  Name:  Andrew Giangrave

  
	
   

  	
   

  	
  Title:    Managing
  Director

               CIT Group

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Credit Industriel et
  Commercial

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Anthony Rock

  
	
   

  	
   

  	
  Name:  Anthony Rock

  
	
   

  	
   

  	
  Title:   Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Marcus Edward

  
	
   

  	
   

  	
  Name:  Marcus Edward

  
	
   

  	
   

  	
  Title:    Managing
  Director

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Fifth Third Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nancy W. Lanzoni

  
	
   

  	
   

  	
  Name:  Nancy W. Lanzoni

  
	
   

  	
   

  	
  Title:    Vice
  President

  

 

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  HSBC Bank USA, NA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard F. Neuman

  
	
   

  	
   

  	
  Name:  Richard F. Neuman

  
	
   

  	
   

  	
  Title:     S.V.P.

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Hua Nan Commercial Bank,

  New York Agency

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Henry Hsich

  
	
   

  	
   

  	
  Name:  Henry Hsich

  
	
   

  	
   

  	
  Title:     Assistant Vice President

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  ING Capital LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William C. James

  
	
   

  	
   

  	
  Name:  William C. James

  
	
   

  	
   

  	
  Title:     Managing Director

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Israel Discount Bank of
  New York

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Howard Weinberg

  
	
   

  	
   

  	
  Name:  Howard Weinberg

  
	
   

  	
   

  	
  Title:     Senior Vice President I

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard R. Tripaldi

  
	
   

  	
   

  	
  Name:  Richard R. Tripaldi

  
	
   

  	
   

  	
  Title:     Assistant Vice President

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  JP Morgan Chase Bank, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Donald S. Shokrian

  
	
   

  	
   

  	
  Name:  Donald S. Shokrian

  
	
   

  	
   

  	
  Title:     Managing Director

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  by: PPM America, Inc., as
  Attorney-in-fact,

  on behalf of Jackson National Life 

  Insurance Company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David C. Wagner

  
	
   

  	
   

  	
  Name:  David C. Wagner

  
	
   

  	
   

  	
  Title:     Managing Director

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Raymond James Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Andrew D. Hahn

  
	
   

  	
   

  	
  Name:  Andrew D. Hahn

  
	
   

  	
   

  	
  Title:     Senior Vice President

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED
  AS OF JUNE 9, 2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS
  BORROWER, SCIENTIFIC GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME
  PARTIES HERETO, AND JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  R2B FINANCE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John A. Valiska

  
	
   

  	
   

  	
  Name:  John A. Valiska

  
	
   

  	
   

  	
  Title:     First Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Eric Salat

  
	
   

  	
   

  	
  Name:  Eric Salat

  
	
   

  	
   

  	
  Title:    Group Vice President

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF JUNE 9,
  2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS BORROWER, SCIENTIFIC
  GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, AND
  JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  State Bank of India 

  Los Angeles Agency

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ K.S.S. NAIDU

  
	
   

  	
   

  	
  Name:  K.S.S.
  NAIDU

  
	
   

  	
   

  	
  Title:    Vice President (CR. & OPS.)

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF JUNE 9,
  2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS BORROWER, SCIENTIFIC
  GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, AND
  JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Sumitomo Mitsui Banking 

  Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Yoshihiro Hayakotome

  
	
   

  	
   

  	
  Name:  Yoshihiro
  Hayakotome

  
	
   

  	
   

  	
  Title:    General Manager

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF JUNE 9,
  2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS BORROWER, SCIENTIFIC
  GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, AND
  JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Taipei Fubon Commercial 

  Bank, New York Agency

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sophia Jing

  
	
   

  	
   

  	
  Name:  Sophia
  Jing

  
	
   

  	
   

  	
  Title:    FVP & General Manager

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF JUNE 9,
  2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS BORROWER, SCIENTIFIC
  GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, AND
  JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Toronto Dominion (Texas) LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Debbi L. Brito

  
	
   

  	
   

  	
  Name:  Debbi
  L. Brito

  
	
   

  	
   

  	
  Title:    Authorized Signatory

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF JUNE 9,
  2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS BORROWER, SCIENTIFIC
  GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, AND
  JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  UBS Loan Finance LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard L. Tavrow

  
	
   

  	
   

  	
  Name:

  	
  Richard L. Tavrow

  
	
   

  	
   

  	
  Title:

  	
  Director

   Banking Products Services, US

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Irja R. Otsa

  
	
   

  	
   

  	
  Name:  Irja R.
  Otsa

  
	
   

  	
   

  	
  Title:    Associate Director

  Banking Products Services, US

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF JUNE 9,
  2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS BORROWER, SCIENTIFIC
  GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, AND
  JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Union Bank of California N.A

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher K.
  Freeman

  
	
   

  	
   

  	
  Name:  Christopher
  K. Freeman

  
	
   

  	
   

  	
  Title:    Vice President

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF JUNE 9,
  2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS BORROWER, SCIENTIFIC
  GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, AND
  JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  United Overseas Bank Limited,

  New York Agency,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Lim

  
	
   

  	
   

  	
  Name:  George
  Lim

  
	
   

  	
   

  	
  Title:   
  SVP & GM

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mario Sheng

  
	
   

  	
   

  	
  Name:  Mario
  Sheng

  
	
   

  	
   

  	
  Title:   
  AVP

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF JUNE 9,
  2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS BORROWER, SCIENTIFIC
  GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, AND
  JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Wachovia Bank, National

  Association

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen T. Dorosh

  
	
   

  	
   

  	
  Name:  Stephen
  T. Dorosh

  
	
   

  	
   

  	
  Title:    Vice President

  

 

 

	
   

  	
  SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF JUNE 9,
  2008, AMONG SCIENTIFIC GAMES INTERNATIONAL, INC., AS BORROWER, SCIENTIFIC
  GAMES CORPORATION, THE SEVERAL LENDERS FROM TIME TO TIME PARTIES HERETO, AND
  JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER:

  	
  Wells Fargo Bank, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peitty Chou

  
	
   

  	
   

  	
  Name:  Peitty
  Chou

  
	
   

  	
   

  	
  Title:    Vice PresidentExhibit 10.2

 

 

GUARANTEE AND COLLATERAL
AGREEMENT

 

among

 

SCIENTIFIC GAMES INTERNATIONAL,
INC.,

 

SCIENTIFIC GAMES CORPORATION,

as a Guarantor

 

and certain of their
Subsidiaries

 

in favor of

 

JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent

 

Dated as of June 9, 2008

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.
  DEFINED TERMS

  	
  1

  
	
   

  	
  1.1.

  	
  Definitions

  	
  1

  
	
   

  	
  1.2.

  	
  Other Definitional Provisions

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.
  GUARANTEE

  	
  5

  
	
   

  	
  2.1.

  	
  Guarantee

  	
  5

  
	
   

  	
  2.2.

  	
  Indemnity and Subrogation.

  	
  5

  
	
   

  	
  2.3.

  	
  Contribution and Subrogation

  	
  6

  
	
   

  	
  2.4.

  	
  Subordination.

  	
  6

  
	
   

  	
  2.5.

  	
  Amendments, etc. with respect to the
  Borrower Obligations

  	
  6

  
	
   

  	
  2.6.

  	
  Guarantee Absolute and Unconditional

  	
  7

  
	
   

  	
  2.7.

  	
  Reinstatement

  	
  7

  
	
   

  	
  2.8.

  	
  Payments

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.
  GRANT OF SECURITY INTEREST

  	
  8

  
	
   

  	
   

  	
   

  
	
  SECTION 4.
  REPRESENTATIONS AND WARRANTIES

  	
  9

  
	
   

  	
  4.1.

  	
  Representations in Credit Agreement

  	
  9

  
	
   

  	
  4.2.

  	
  Title; No Other Liens

  	
  9

  
	
   

  	
  4.3.

  	
  Perfected Liens

  	
  9

  
	
   

  	
  4.4.

  	
  Jurisdiction of Organization; Chief
  Executive Office

  	
  10

  
	
   

  	
  4.5.

  	
  Inventory and Equipment

  	
  10

  
	
   

  	
  4.6.

  	
  Farm Products

  	
  10

  
	
   

  	
  4.7.

  	
  Investment Property

  	
  10

  
	
   

  	
  4.8.

  	
  Receivables

  	
  11

  
	
   

  	
  4.9.

  	
  Intellectual Property

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.
  COVENANTS

  	
  11

  
	
   

  	
  5.1.

  	
  Covenants in Credit Agreement

  	
  11

  
	
   

  	
  5.2.

  	
  Delivery of Instruments and Chattel Paper

  	
  12

  
	
   

  	
  5.3.

  	
  Maintenance of Insurance

  	
  12

  
	
   

  	
  5.4.

  	
  Payment of Obligations

  	
  12

  
	
   

  	
  5.5.

  	
  Maintenance of Perfected Security Interest;
  Further Documentation

  	
  12

  
	
   

  	
  5.6.

  	
  Changes in Locations, Name, etc.

  	
  13

  
	
   

  	
  5.7.

  	
  Notices

  	
  13

  
	
   

  	
  5.8.

  	
  Investment Property

  	
  13

  
	
   

  	
  5.9.

  	
  Receivables

  	
  13

  
	
   

  	
  5.10.

  	
  Intellectual Property

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.
  REMEDIAL PROVISIONS

  	
  16

  
	
   

  	
  6.1.

  	
  Certain Matters Relating to Receivables

  	
  16

  
	
   

  	
  6.2.

  	
  Communications with Obligors; Grantors
  Remain Liable

  	
  17

  
	
   

  	
  6.3.

  	
  Pledged Stock

  	
  17

  

 

 

	
   

  	
  6.4.

  	
  Proceeds to be Turned Over to
  Administrative Agent

  	
  18

  
	
   

  	
  6.5.

  	
  Application of Proceeds

  	
  18

  
	
   

  	
  6.6.

  	
  Code and Other Remedies

  	
  19

  
	
   

  	
  6.7.

  	
  Registration Rights

  	
  20

  
	
   

  	
  6.8.

  	
  Deficiency

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.
  THE ADMINISTRATIVE AGENT

  	
  21

  
	
   

  	
  7.1.

  	
  Administrative Agent’s Appointment as
  Attorney-in-Fact, etc.

  	
  21

  
	
   

  	
  7.2.

  	
  Duty of Administrative Agent

  	
  23

  
	
   

  	
  7.3.

  	
  Recording of Financing Statements

  	
  23

  
	
   

  	
  7.4.

  	
  Authority of Administrative Agent

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.
  MISCELLANEOUS

  	
  24

  
	
   

  	
  8.1.

  	
  Amendments in Writing

  	
  24

  
	
   

  	
  8.2.

  	
  Notices

  	
  24

  
	
   

  	
  8.3.

  	
  No Waiver by Course of Conduct; Cumulative
  Remedies

  	
  24

  
	
   

  	
  8.4.

  	
  Enforcement Expenses; Indemnification

  	
  24

  
	
   

  	
  8.5.

  	
  Successors and Assigns

  	
  25

  
	
   

  	
  8.6.

  	
  Set-Off

  	
  25

  
	
   

  	
  8.7.

  	
  Counterparts

  	
  25

  
	
   

  	
  8.8.

  	
  Severability

  	
  25

  
	
   

  	
  8.9.

  	
  Section Headings

  	
  25

  
	
   

  	
  8.10.

  	
  Integration

  	
  25

  
	
   

  	
  8.11.

  	
  GOVERNING LAW

  	
  26

  
	
   

  	
  8.12.

  	
  Submission To Jurisdiction; Waivers

  	
  26

  
	
   

  	
  8.13.

  	
  Acknowledgements

  	
  26

  
	
   

  	
  8.14.

  	
  Additional Grantors

  	
  27

  
	
   

  	
  8.15.

  	
  Releases

  	
  27

  
	
   

  	
  8.16.

  	
  WAIVER OF JURY TRIAL

  	
  27

  

 

 

	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  Schedule 1

  	
   

  	
  Guarantors

  
	
  Schedule 2

  	
   

  	
  Description of Pledged Securities

  
	
  Schedule 3

  	
   

  	
  Filings and Other Actions
  Required to Perfect Security Interests

  
	
  Schedule 4

  	
   

  	
  Location of Jurisdiction of
  Organization and Chief Executive Office

  
	
  Schedule 5

  	
   

  	
  Location of Inventory and
  Equipment

  
	
  Schedule 6

  	
   

  	
  Intellectual Property

  
	
   

  	
   

  	
   

  
	
  ANNEXES

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex I

  	
   

  	
  Form of Assumption Agreement

  
	
  Annex II

  	
   

  	
  Form of Acknowledgment and
  Consent

  
	
  Annex III

  	
   

  	
  Form of Perfection
  Certificate

  

 

 

GUARANTEE AND COLLATERAL AGREEMENT, dated as
of June 9, 2008, SCIENTIFIC GAMES INTERNATIONAL, INC., a Delaware
corporation (the “Borrower”), SCIENTIFIC GAMES CORPORATION, a Delaware
corporation (“Holdings”), as a Guarantor, each of the subsidiaries of
Holdings party hereto (together with the Borrower, Holdings and any other
subsidiary of Holdings that may become a party hereto as provided herein, the “Grantors”),
in favor of JPMORGAN CHASE BANK, N.A., as Administrative Agent (in such
capacity, the “Administrative Agent”) for the several banks, financial
institutions and other entities (the “Lenders”) from time to time
parties to the Credit Agreement, dated as of June 9, 2008 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, as borrower, Holdings, as a Guarantor and parent of the
Borrower, the Lenders and the Administrative Agent.

 

W  I  T  N  E  S  S  E  T
H:

 

WHEREAS, the Lenders have agreed to extend
credit to the Borrower subject to the terms and conditions set forth in the
Credit Agreement.

 

WHEREAS, the obligations of the Lenders to
extend such credit are conditioned upon, among other things, the execution and
delivery of this Agreement.

 

WHEREAS, the Guarantors are affiliates of the
Borrower, will derive substantial benefits from the extension of credit to the
Borrower pursuant to the Credit Agreement and are willing to execute and
deliver this Agreement in order to induce the Lenders to extend such credit.

 

NOW, THEREFORE, in consideration of the
premises, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Agents and the Lenders, as follows:

 

SECTION 1.  DEFINED TERMS

 

1.1.          Definitions.  (a)  Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement, and the
following terms are used herein as defined in the New York UCC: Accounts,
Certificated Security, Chattel Paper, Commercial Tort Claims, Documents,
Equipment, Farm Products, General Intangibles, Goods, Instruments, Inventory,
Letter-of-Credit Rights and Supporting Obligations.

 

(b)           The
following terms shall have the following meanings:

 

“Agreement”:  this Guarantee and Collateral Agreement, as
the same may be amended, supplemented or otherwise modified from time to time.

 

“Borrower
Credit Agreement Obligations”:  the
collective reference to the unpaid principal of and interest on the Loans and
Reimbursement Obligations and all other obligations and liabilities of the
Borrower (including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of the
Loans and Reimbursement Obligations and interest accruing at the then applicable
rate provided in the

 

 

Credit Agreement 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)
to any Agent or 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, the Credit Agreement, this Agreement, the
other Loan Documents or any Letter of Credit, or any other document made,
delivered or given in connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Agents or to the Lenders that are required to
be paid by the Borrower pursuant to the terms of any of the foregoing
agreements).

 

“Borrower
Obligations”:  the collective
reference to (i) the Borrower Credit Agreement Obligations and (ii) Hedge
Agreement Obligations, but only to the extent that, and only so long as, the
Borrower Credit Agreement Obligations are secured and guaranteed pursuant
hereto.

 

“Collateral”:  as defined in Section 3.

 

“Collateral
Account”:  any collateral account
established by the Administrative Agent as provided in Section 6.1 or 6.4.

 

“Copyrights”:  (i) all copyrights arising under the
laws of the United States, any other country or any political subdivision
thereof, whether registered or unregistered and whether published or
unpublished (including, without limitation, those listed on Schedule 6),
all registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to
obtain all renewals thereof.

 

“Copyright
Licenses”:  any written agreement
naming any Grantor as licensor or licensee (including, without limitation,
those listed on Schedule 6), granting any right under any
Copyright, including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.

 

“Deposit
Account”:  as defined in the Uniform
Commercial Code of any applicable jurisdiction and, in any event, including,
without limitation, any demand, time, savings, passbook or like account
maintained with a depositary institution.

 

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

 

“Foreign
Subsidiary Voting Stock”:  the voting
Capital Stock of any Foreign Subsidiary.

 

“Grantors”:
as defined in the preamble to this Agreement.

 

“Guarantor
Obligations”:  with respect to any
Guarantor, all obligations and liabilities of such Guarantor which may arise
under or in connection with this Agreement (including, without limitation, Section 2)
or any other Loan Document to which such Guarantor is a party, in each case
whether on account of guarantee obligations, reimbursement obligations, fees,
indemnities, 

 

2

 

costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to the
Agents or to the Lenders that are required to be paid by such Guarantor
pursuant to the terms of this Agreement or any other Loan Document).

 

“Guarantors”:  the collective reference to each Grantor
other than the Borrower.  The initial
Guarantors are identified on Schedule 1 hereto.

 

“Hedge
Agreement Obligations”:  the
collective reference to all obligations and liabilities of Holdings or any
Subsidiary (including, without limitation, interest accruing at the then
applicable rate provided in any Specified Hedge Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Holdings or any such Subsidiary,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to any counterparty to a Specified Hedge Agreement, 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, any Specified Hedge Agreement or any other document made, delivered or
given in connection therewith, in each case, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the relevant counterparty to a Specified Hedge Agreement that are required
to be paid by Holdings or any such Subsidiary pursuant to the terms of any
Specified Hedge Agreement).

 

“Intercompany
Note”:  any promissory note evidencing
loans made by any Grantor to any other Group Member.

 

“Investment
Property”:  the collective reference
to (i) all “investment property” as such term is defined in Section 9-102(a)(49)
of the New York UCC (other than any Foreign Subsidiary Voting Stock excluded
from the definition of “Pledged Stock”) and (ii) whether or not
constituting “investment property” as so defined, all Pledged Notes and all
Pledged Stock.

 

“Issuers”:  the collective reference to each issuer of
any Investment Property.

 

“New York
UCC”:  the Uniform Commercial Code as
from time to time in effect in the State of New York.

 

“Obligations”:  (i) in the case of the Borrower, the
Borrower Obligations, and (ii) in the case of each Guarantor, its
Guarantor Obligations.

 

“Patents”:  (i) all letters patent of the United
States, any other country or any political subdivision thereof, all reissues
and extensions thereof and all goodwill associated therewith, including,
without limitation, any of the foregoing referred to on Schedule 6,
(ii) all applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any of the foregoing referred to on Schedule 6,
and (iii) all rights to obtain any reissues or extensions of the
foregoing.

 

“Patent
License”:  all agreements, whether
written or oral, providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a Patent,
including, without limitation, any of the foregoing referred to on Schedule 6.

 

3

 

“Perfection Certificate”:  a certificate substantially in the form of
Annex II, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by a Financial Officer and the chief
legal officer of Holdings.

 

“Pledged
Notes”:  all promissory notes listed
on Schedule 2, all Intercompany Notes at any time issued to any
Grantor and all other promissory notes issued to or held by any Grantor (other
than promissory notes issued in connection with extensions of trade credit by
any Grantor in the ordinary course of business).

 

“Pledged
Stock”:  the shares of Capital Stock
listed on Schedule 2, together with any other shares, stock
certificates, options, interests or rights of any nature whatsoever in respect
of the Capital Stock of any Person that may be issued or granted to, or held
by, any Grantor while this Agreement is in effect; provided that in no
event shall more than 65% of the total outstanding Foreign Subsidiary Voting
Stock of any Foreign Subsidiary directly owned by a Grantor be required to be
pledged hereunder.

 

“Proceeds”:  all “proceeds” as such term is defined in Section 9-102(a)(64)
of the New York UCC and, in any event, shall include, without limitation, all
dividends or other income from the Investment Property, collections thereon or
distributions or payments with respect thereto.

 

“Receivable”:  any right to payment for goods sold or leased
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).

 

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

 

“Trademarks”:  (i) all trademarks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, service marks, logos and other source or business identifiers,
and all goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark Office
or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, or otherwise, and all
common-law rights related thereto, including, without limitation, any of the
foregoing referred to on Schedule 6, and (ii) the right to
obtain all renewals thereof.

 

“Trademark
License”:  any agreement, whether
written or oral, providing for the grant by or to any Grantor of any right to
use any Trademark, including, without limitation, any of the foregoing referred
to on Schedule 6.

 

“Vehicles”:  all cars, trucks, trailers, construction,
special purpose and other vehicles and equipment covered by a certificate of
title of any state or of the United States of America and all appurtenants to
any of the foregoing.

 

1.2.         Other
Definitional Provisions.  (a)  The words “hereof,” “herein”,
“hereto” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to
this Agreement unless otherwise specified.

 

4

 

(b)          The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

 

(c)          Where the context requires, terms
relating to the Collateral or any part thereof, when used in relation to a
Grantor, shall refer to such Grantor’s Collateral or the relevant part thereof.

 

(d)          Where the context requires, any affiliate of a Lender which
is a party to a Specified Hedge Agreement and any counterparty to a Specified
Hedge Agreement set forth on Schedule 1.1(b) to the Credit Agreement,
in each case shall be deemed to be a “Lender”
for purposes of this Agreement.

 

SECTION 2.  GUARANTEE

 

2.1.         Guarantee.  (a)  Each
of the Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Administrative Agent, for the ratable benefit of
the Agents and the Lenders and their respective permitted successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.

 

(b)          [Reserved.]

 

(c)          [Reserved.]

 

(d)          The
guarantee contained in this Section 2 shall remain in full force and
effect until all the Borrower Obligations and the obligations of each Guarantor
under the guarantee contained in this Section 2 shall have been satisfied
by payment in full, no Letter of Credit shall be outstanding and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from any Borrower
Obligations.

 

(e)          No payment made by the Borrower, any
of the Guarantors, any other guarantor or any other Person or received or
collected by any Agent or any Lender from the Borrower, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from time to time
in reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations until the Borrower
Obligations are paid in full, no Letter of Credit shall be outstanding and the
Commitments are terminated.

 

2.2.         Indemnity
and Subrogation.  In addition to all
such rights of indemnity and subrogation as the Guarantors may have under
applicable law (but subject to Section 2.4), Holdings and the Borrower
agree that (a) in the event a payment of an obligation shall be made by
any Guarantor (other than Holdings) under this Agreement, Holdings and the
Borrower shall indemnify such Guarantor for the full amount of such payment and
such Guarantor shall be 

 

5

 

subrogated to the
rights of the Person to whom such payment shall have been made to the extent of
such payment and (b) in the event any assets of any Grantor (other than
Holdings or the Borrower) shall be sold pursuant to this Agreement or any other
Security Document to satisfy in whole or in part an obligation owed to any
Lender, Holdings and the Borrower shall indemnify such Grantor in an amount
equal to the greater of the book value or the fair market value of the assets
so sold.

 

2.3.         Contribution
and Subrogation.  Each Guarantor and Grantor (a “Contributing
Party”) agrees (subject to Section 2.4) that, in the event a payment
shall be made by any other Guarantor (other than Holdings) hereunder in respect
of any Borrower Obligation or assets of any other Grantor (other than Holdings
or the Borrower) shall be sold pursuant to any Security Document to satisfy any
Borrower Obligation owed to any Lender and such other Guarantor or Grantor (the
“Claiming Party”) shall not have been fully indemnified by Holdings and
the Borrower as provided in Section 2.2, the Contributing Party shall
indemnify the Claiming Party in an amount equal to the amount of such payment
or the greater of the book value or the fair market value of such assets, as
the case may be, in each case multiplied by a fraction of which the numerator
shall be the net worth of the Contributing Party on the date hereof and the
denominator shall be the aggregate net worth of all the Guarantors and Grantors
on the date hereof (or, in the case of any Guarantor or Grantor becoming a
party hereto pursuant to Section 8.14, the date of the Assumption
Agreement executed and delivered by such Guarantor or Grantor).  Any Contributing Party making any payment to
a Claiming Party pursuant to this Section 2.3 shall be subrogated to the
rights of such Claiming Party under Section 2.2 to the extent of such
payment.

 

2.4.         Subordination.  Notwithstanding any
provision of this Agreement to the contrary, all rights of the Guarantors and
Grantors under Sections 2.2 and 2.3 and all other rights of indemnity,
contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the Borrower
Obligations.  No failure on the part of
the Borrower or any Guarantor or Grantor to make the payments required by
Sections 2.2 and 2.3 (or any other payments required under applicable law
or otherwise) shall in any respect limit the obligations and liabilities of any
Guarantor or Grantor with respect to its obligations hereunder, and each
Guarantor and Grantor shall remain liable for the full amount of the
obligations of such Guarantor or Grantor hereunder.

 

(b)          Each Guarantor and Grantor hereby agrees that all
Indebtedness and other monetary obligations owed by it to any other Guarantor, Grantor
or any other Subsidiary shall be fully subordinated to the indefeasible payment
in full in cash of the Borrower Obligations.

 

2.5.         Amendments,
etc. with respect to the Borrower Obligations.  Each Guarantor
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Borrower Obligations made by
any Agent or any Lender may be rescinded by such Agent or such Lender and any
of the Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended,
modified, accelerated, compromised, waived, surrendered or released by any
Agent or any Lender, and the Credit Agreement and the 

 

6

 

other Loan Documents
and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, and any
collateral security, guarantee or right of offset at any time held by any Agent
or any Lender for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. 
No Agent or Lender shall have any obligation to protect, secure, perfect
or insure any Lien at any time held by it as security for the Borrower
Obligations or for the guarantee contained in this Section 2 or any
property subject thereto.

 

2.6.         Guarantee
Absolute and Unconditional.  Each Guarantor to the extent
permitted by applicable law, waives any and all notice of the creation,
renewal, extension or accrual of any of the Borrower Obligations and notice of
or proof of reliance by any Agent or any Lender upon the guarantee contained in
this Section 2 or acceptance of the guarantee contained in this Section 2;
the Borrower Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon the guarantee contained in this Section 2; and all
dealings between the Borrower and any of the Guarantors, on the one hand, and
the Agents and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Section 2.  Each
Guarantor, to the extent permitted by applicable law, waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations.  Each Guarantor understands
and agrees that the guarantee contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Credit
Agreement or any other Loan Document, any of the Borrower Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by any Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against any Agent or any Lender, or (c) any
other circumstance whatsoever (with or without notice to or knowledge of the
Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section 2,
in bankruptcy or in any other instance. 
When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, any Agent or any Lender may, but
shall be under no obligation to, make a similar demand on or otherwise pursue
such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Borrower Obligations or any right of offset with respect thereto, and
any failure by any Agent or any Lender to make any such demand, to pursue such
other rights or remedies or to collect any payments from the Borrower, any
other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release
of the Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of any
Agent or any Lender against any Guarantor. 
For the purposes hereof “demand” shall include the commencement and
continuance of any legal proceedings.

 

2.7.         Reinstatement.  The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of

 

7

 

any of the
Borrower Obligations is rescinded or must otherwise be restored or returned by
any Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.

 

2.8.         Payments.  Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars or the relevant Foreign Currency, as applicable, at the
Funding Office.

 

SECTION 3.  GRANT OF SECURITY INTEREST

 

Each Grantor
hereby assigns and transfers to the Administrative Agent, and hereby grants to
the Administrative Agent, for the ratable benefit of the Agents and the Lenders
(and any affiliates of any Lender to which Hedge Agreement Obligations are
owing), a security interest in, all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”), as collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of such Grantor’s Obligations:

 

(a)          all
Accounts;

 

(b)          all
Chattel Paper;

 

(c)          all
Deposit Accounts;

 

(d)          all
Documents;

 

(e)          all
Equipment, other than Vehicles;

 

(f)           all
General Intangibles;

 

(g)          all
Instruments (except with regard to licenses of Intellectual Property by a third
party to a Grantor, if the assignment, transfer or grant of the security
interest would breach, limit the rights of the Grantor under or give rise to a
right to terminate such license);

 

(h)          all
Intellectual Property;

 

(i)           all
Inventory;

 

(j)           all
Investment Property;

 

(k)          all Letter-of-Credit
Rights;

 

(l)           all Goods and other property not
otherwise described above;

 

(m)         all books and records pertaining to the
Collateral; and

 

8

 

(n)          to
the extent not otherwise included, all Proceeds, Supporting Obligations  and products of any and all of the foregoing
and all collateral security and guarantees given by any Person with respect to
any of the foregoing;

 

provided,
however, that notwithstanding any of the other provisions set forth in
this Section 3, this Agreement shall not constitute a grant of a security
interest in any property to the extent that such grant of a security interest
is prohibited by any Requirements of Law of a Governmental Authority, requires
a consent not obtained of any Governmental Authority pursuant to such
Requirement of Law or is prohibited by, or constitutes a breach or default
under or results in the termination of or requires any consent not obtained
under, any contract, license, agreement, instrument or other document
evidencing or giving rise to such property or, in the case of any Investment
Property, any applicable shareholder or similar agreement, except to the extent
that such Requirement of Law or the term in such contract, license, agreement,
instrument or other document or shareholder or similar agreement providing for
such prohibition, breach, default or termination or requiring such consent is
ineffective under applicable law; and provided, further, that the
parties hereto acknowledge that the security interest is granted as security
only and shall not subject the Administrative Agent or any Lender to, or in any
way alter or modify, any obligation or liability of any Grantor with respect to
or arising out of the Collateral.

 

SECTION 4.  REPRESENTATIONS AND WARRANTIES

 

To induce the
Agents and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby represents and warrants to each Agent and each
Lender that:

 

4.1.         Representations
in Credit Agreement.  In the case of each Guarantor, the
representations and warranties set forth in Section 5 of the Credit
Agreement as they relate to such Guarantor or to the Loan Documents to which
such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and each Agent and each Lender shall be
entitled to rely on each of them as if they were fully set forth herein, provided
that each reference in each such representation and warranty to the knowledge
of Holdings and the Borrower shall, for the purposes of this Section 4.1,
be deemed to be a reference to such Guarantor’s knowledge.

 

4.2.         Title;
No Other Liens.  Except for the security interest granted to the
Administrative Agent for the ratable benefit of the Agents and the Lenders
pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others.  No financing statement or other public notice
with respect to all or any part of the Collateral is on file or of record in
any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Agents and the Lenders,
pursuant to this Agreement or as are permitted by the Credit Agreement.

 

4.3.         Perfected
Liens.  The security interests granted pursuant to this Agreement
(a) upon completion of the filings and other actions specified on Schedule 3
(which, in the case of all filings and other documents referred to on said
Schedule, have been delivered to the Administrative Agent in completed and duly
executed form) will constitute valid perfected 

 

9

 

security interests
in all of the Collateral in favor of the Administrative Agent, for the ratable
benefit of the Agents and the Lenders, as collateral security for such Grantor’s
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral
in existence on the date hereof except for Liens permitted by the Credit
Agreement.

 

4.4.         Jurisdiction
of Organization; Chief Executive Office.  On the date hereof,
such Grantor’s jurisdiction of organization, identification number from the
jurisdiction of organization (if any), and the location of such Grantor’s chief
executive office or sole place of business, are specified on Schedule 4.  Such Grantor has furnished to the
Administrative Agent a certified charter, certificate of incorporation or other
organization document and long-form good standing certificate as of a date
which is recent to the date hereof.

 

4.5.         Inventory
and Equipment.  On the date hereof, the Inventory and the Equipment
(other than mobile or moveable goods) are kept at the locations listed on Schedule 5.

 

4.6.         Farm
Products.  None of the Collateral constitutes, or is the Proceeds
of, Farm Products.

 

4.7.         Investment
Property.  (a)  The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each relevant Issuer owned by such Grantor or,
in the case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding
Foreign Subsidiary Voting Stock of each relevant Issuer owned by such Grantor.
Each Grantor acknowledges and agrees that (i) to the extent each interest
in any limited liability company or limited partnership controlled now or in
the future by such Grantor and pledged hereunder is a “security” within the
meaning of Article 8 of the New York UCC and is governed by Article 8
of the New York UCC, such interest shall be certificated and (ii) each
such interest shall at all times hereafter continue to be such a security and
represented by such certificate.  Each
Grantor further acknowledges and agrees that with respect to any interest in
any limited liability company or limited partnership controlled now or in the
future by such Grantor and pledged hereunder that is not a “security” within
the meaning of Article 8 of the New York UCC, such Grantor shall at no
time elect to treat any such interest as a “security” within the meaning of Article 8
of the New York UCC, nor shall such interest be represented by a certificate,
unless such Grantor provides prior written notification to the Administrative
Agent of such election and such interest is thereafter represented by a
certificate that is promptly delivered to the Administrative Agent pursuant to
the terms hereof.

 

(b)          All
the shares of the Pledged Stock have been duly and validly issued and are fully
paid and nonassessable.

 

(c)          Each
of the Pledged Notes constitutes the legal, valid and binding obligation of the
obligor with respect thereto, enforceable in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles 

 

10

 

(whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing.

 

(d)          Such
Grantor is the record and beneficial owner of, and has good and marketable
title to, the Investment Property pledged by it hereunder, free of any and all
Liens or options in favor of, or claims of any other Person, except the
security interest created by this Agreement.

 

4.8.         Receivables.  (a)  Each
Grantor shall deliver to the Administrative Agent each Instrument or Chattel
Paper in an amount in excess of $1,000,000 payable to such Grantor under or in
connection with any Receivable.

 

(b)          The
amounts represented by such Grantor to the Lenders from time to time as owing
to such Grantor in respect of the Receivables will at such times be accurate.

 

4.9.         Intellectual
Property.  (a)  Schedule 6 lists all
registered Copyrights, registered Trademarks, Patents and applications to
register any of the foregoing owned by such Grantor in its own name on the date
hereof, and all Copyright Licenses, Trademark Licenses and Patent Licenses.

 

(b)          On
the date hereof, all material Intellectual Property of such Grantor, including
without limitation the Intellectual Property described on Schedule 6,
is valid, subsisting, unexpired and enforceable, has not been abandoned and
does not infringe the intellectual property rights of any other Person.

 

(c)          Except
as set forth on Schedule 6, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.

 

(d)          No
holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or such Grantor’s rights
in, any Intellectual Property in any respect that could reasonably be expected
to have a Material Adverse Effect.

 

(e)          Except as set forth on Schedule 6,
no action or proceeding is pending, or, to the knowledge of such Grantor,
threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor’s ownership interest
therein or (ii) which, if adversely determined, would have a material
adverse effect on the value of any Intellectual Property.

 

SECTION 5.  COVENANTS

 

Each Grantor
covenants and agrees with the Agents and the Lenders that, from and after the
date of this Agreement until the Obligations shall have been paid in full, no
Letter of Credit shall be outstanding and the Commitments shall have
terminated:

 

5.1.         Covenants
in Credit Agreement.  In the case of each Guarantor, such
Guarantor shall take, or shall refrain from taking, as the case may be, each
action that is 

 

11

 

necessary to be
taken or not taken under Sections 7 and 8 of the Credit Agreement, as the
case may be, so that no Default or Event of Default is caused by the failure to
take such action or to refrain from taking such action by such Guarantor or any
of its Subsidiaries.

 

5.2.         Delivery
of Instruments and Chattel Paper.  If any amount in excess of
$1,000,000 payable under or in connection with any of the Collateral shall be
or become evidenced by any Instrument, Certificated Security or Chattel Paper,
such Instrument, Certificated Security or Chattel Paper shall be promptly
delivered to the Administrative Agent, duly indorsed in a manner reasonably
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.

 

5.3.         Maintenance
of Insurance.  (a)  Such Grantor will maintain, with
financially sound and reputable companies, insurance policies in accordance
with Section 7.5 of the Credit Agreement.

 

(b)          All
such insurance shall (i) provide that no cancellation, material reduction
in amount or material change in coverage thereof shall be effective, except in
the case of non-payment of premium, until at least 30 days after receipt
by the Administrative Agent of written notice thereof, (ii) name the
Administrative Agent as insured party or loss payee, (iii) if reasonably
requested by the Administrative Agent, include a breach of warranty clause and (iv) be
reasonably satisfactory in all other respects to the Administrative Agent.

 

(c)          Upon
the reasonable request of the Administrative Agent, the Borrower shall deliver
to the Administrative Agent a report of a reputable insurance broker with
respect to such insurance substantially concurrently with the delivery by
Holdings to the Administrative Agent of its audited financial statements for
each fiscal year and such supplemental reports with respect thereto as the
Administrative Agent may from time to time reasonably request.

 

5.4.         Payment
of Obligations.  Such Grantor will pay and discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all material taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as
all material claims of any kind (including, without limitation, claims for
labor, materials and supplies) against or with respect to the Collateral,
except that no such charge need be paid if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
such Grantor.

 

5.5.         Maintenance
of Perfected Security Interest; Further Documentation.  (a)  Such
Grantor shall maintain the security interest created by this Agreement as a
perfected security interest having at least the priority described in Section 4.3
and shall defend such security interest against the claims and demands of all
Persons whomsoever, subject to the rights of such Grantor under the Loan
Documents to Dispose of the Collateral.

 

(b)          Such
Grantor will furnish to the Administrative Agent and the Lenders from time to
time statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection therewith, in
each case as the Administrative Agent may reasonably request, all in reasonable
detail.

 

12

 

(c)          At any time and from time to time,
upon the written request of the Administrative Agent, and at the sole expense
of such Grantor, such Grantor will promptly and duly execute and deliver, and
have recorded, such further instruments and documents and take such further
actions as the Administrative Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, (i) the filing
of any financing or continuation statements under the Uniform Commercial Code
(or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby and (ii) in the case of  Investment Property, Deposit Accounts,
Letter-of-Credit Rights and any other relevant Collateral, taking any actions
necessary to enable the Administrative Agent to obtain “control” (within the
meaning of the applicable Uniform Commercial Code) with respect thereto.

 

5.6.         Changes
in Locations, Name, etc.  Such Grantor will promptly notify the
Administrative Agent of (i) any change in its jurisdiction of organization
or the location of its chief executive office or sole place of business or principal
residence from that referred to in Section 4.4, or (ii) any change in
its name; and thereupon such Grantor shall deliver to the Administrative Agent (a) all
additional financing statements and other documents reasonably requested by the
Administrative Agent as necessary to maintain the validity, perfection and
priority of the security interests provided for herein and (b) if
applicable, a written supplement to Schedule 5 showing any
additional location at which Inventory or Equipment shall be kept.

 

5.8.         Notices.  Such Grantor
will advise the Administrative Agent and the Lenders promptly, in reasonable
detail, of:

 

(a)           any Lien (other than
security interests created hereby or Liens permitted under the Credit
Agreement) on any of the Collateral which would materially adversely affect the
ability of the Administrative Agent to exercise any of its remedies hereunder;
and

 

(b)           of the occurrence of
any other event which could reasonably be expected to have a material adverse
effect on the aggregate value of the Collateral or on the security interests
created hereby.

 

5.9.         Investment
Property.  (a)  If such Grantor shall become entitled
to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in substitution
of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent
of the Agents and the Lenders, hold the same for the benefit of the Agents and
the Lenders and deliver the same forthwith to the Administrative Agent in the
exact form received, duly indorsed by such Grantor to the Administrative Agent,
if required, together with an undated stock power covering such certificate
duly executed in blank by such Grantor to be held by the Administrative Agent,
subject to the terms hereof, as additional collateral security for the
Obligations.  Any sums paid upon or in
respect of the Investment Property upon the liquidation or dissolution of any
Issuer shall be paid over to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations, and in case

 

13

 

any distribution
of capital shall be made on or in respect of the Investment Property or any
property shall be distributed upon or with respect to the Investment Property
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in favor of
the Administrative Agent, be delivered to the Administrative Agent to be held
by it hereunder as additional collateral security for the Obligations.  If any sums of money or property so paid or
distributed in respect of the Investment Property shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property for the benefit of the
Agents and the Lenders, segregated from other funds of such Grantor, as
additional collateral security for the Obligations.  Notwithstanding the foregoing, the
Grantors shall not be required to pay over to the Administrative Agent or
deliver to the Administrative Agent as Collateral any proceeds of any
liquidation or dissolution of any Issuer, or any distribution of capital or
property in respect of any Investment Property, to the extent that (i) such
liquidation, dissolution or distribution, if treated as a Disposition of the
relevant Issuer, would be permitted by the Credit Agreement and (ii) the
proceeds thereof are applied toward prepayment of Loans and reduction of
Commitments to the extent required by the Credit Agreement.

 

(b)          Without
the prior written consent of the Administrative Agent, such Grantor will not (i) vote
to enable, or take any other action to permit, any Issuer to issue any stock or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock or
other equity securities of any nature of any Issuer, (ii) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Investment Property or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement), (iii) create, incur or
permit to exist any Lien or option in favor of, or any claim of any Person with
respect to, any of the Investment Property or Proceeds thereof, or any interest
therein, except for the security interests created by this Agreement or (iv) enter
into any agreement or undertaking restricting the right or ability of such
Grantor or the Administrative Agent to sell, assign or transfer any of the
Investment Property or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement).

 

(c)          In
the case of each Grantor which is an Issuer, such Issuer agrees that (i) it
will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.8(a) with
respect to the Investment Property issued by it and (iii) the terms of
Sections 6.3(c) and 6.7 shall apply to it, mutatis  mutandis,
with respect to all actions that may be required of it pursuant to Section 6.3(c) or
6.7 with respect to the Investment Property issued by it.

 

5.10.       Receivables.  (a)  Other
than in the ordinary course of business consistent with its past practice, such
Grantor will not (i) grant any extension of the time of payment of any
Receivable, (ii) compromise or settle any Receivable for less than the
full amount thereof, (iii) release, wholly or partially, any Person liable
for the payment of any Receivable, (iv) allow any credit or discount
whatsoever on any Receivable or (v) amend, supplement or modify in any
material respect any Receivable in any manner that could adversely affect the
value thereof.

 

14

 

(b)          Such
Grantor will deliver to the Administrative Agent a copy of each material
written demand, notice or document received by it that questions the validity
or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.

 

5.11.       Intellectual
Property.  (a)  Such Grantor (either itself or through
licensees) will (i) continue to use each material Trademark owned by any
Grantor on and with respect to each and every product and service applicable to
its then current line in order to maintain such Trademark in full force free
from any claim of abandonment for non-use, provided that if a product or
service line is discontinued, use of a Trademark with respect to such product
or service line may be discontinued, (ii) maintain at least the current
quality of products and services offered under such Trademark, (iii) use
such Trademark with the appropriate notice of registration and all other
notices and legends required by applicable Requirements of Law, (iv) not
adopt or use any mark which is confusingly similar or a colorable imitation of
such Trademark unless the Administrative Agent, for the ratable benefit of the
Agents and the Lenders, shall obtain a perfected security interest in such mark
pursuant to this Agreement, and (v) not knowingly (and not knowingly
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark may become invalidated or impaired in any
way, except as provided in Section 5.10(a)(i) above.

 

(b)          Such
Grantor (either itself or through licensees) will not knowingly do any act, or
knowingly omit to do any act, whereby any material Patent owned by any Grantor
may become forfeited, abandoned or dedicated to the public.

 

(c)          Such
Grantor (either itself or through licensees) will not knowingly (and will not
knowingly permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any material portion of the Copyrights
owned by any Grantor may become invalidated or otherwise impaired.  Such Grantor will not knowingly (either
itself or through licensees) do any act whereby any material portion of the
Copyrights owned by any Grantor may fall into the public domain.

 

(d)          Such
Grantor (either itself or through licensees) will not do any act that knowingly
uses any material Intellectual Property to infringe the intellectual property
rights of any other Person.

 

(e)          Such
Grantor will notify the Administrative Agent and the Lenders promptly if it
knows, or has reason to know, that any application or registration relating to
any material Intellectual Property may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including,
without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any court or tribunal in any
country) regarding such Grantor’s ownership of, or the validity of, any
material Intellectual Property or such Grantor’s right to register the same or
to own and maintain the same.

 

(f)           Whenever
such Grantor, either by itself or through any agent, employee, licensee or
designee, shall file an application for the registration of any Intellectual
Property with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, such Grantor shall 

 

15

 

report such filing to the Administrative
Agent within thirty Business Days after the last day of the fiscal quarter in
which such filing occurs.  Upon request
of the Administrative Agent, such Grantor shall execute and deliver, for
recordation by the Administrative Agent (at such Grantor’s cost and expense),
any and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Agents’ and the Lenders’ security
interest in any Copyright, Patent or Trademark owned by any Grantor and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby.

 

(g)          Such
Grantor will take all reasonable and necessary steps, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain and pursue
each application (and to obtain the relevant registration) and to maintain each
registration of the material Intellectual Property, including, without
limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.

 

(h)          In
the event that any material Intellectual Property is infringed, misappropriated
or diluted by a third party, such Grantor shall (i) take such actions as
such Grantor shall reasonably deem appropriate under the circumstances to
protect such Intellectual Property and (ii) if such Intellectual Property
is of material economic value, promptly notify the Administrative Agent after
it learns thereof and take all commercially reasonable actions necessary to
protect such Intellectual Property and to recover any and all damages for such
infringement, misappropriation or dilution.

 

SECTION 6.  REMEDIAL PROVISIONS

 

6.1.         Certain Matters Relating to Receivables.  (a)  The
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that the Administrative Agent
(in consultation with the Borrower) reasonably considers advisable, and each
Grantor shall furnish all such assistance and information as the Administrative
Agent may reasonably require in connection with such test verifications.  At any time upon the occurrence and during
the continuance of an Event of Default, upon the Administrative Agent’s
reasonable request and at the expense of the relevant Grantor, such Grantor
shall cause independent public accountants reasonably satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables.

 

(b)          The Administrative Agent hereby
authorizes each Grantor to collect such Grantor’s Receivables and the
Administrative Agent may curtail or terminate said authority at any time after
the occurrence and during the continuance of an Event of Default.  If required by the Administrative Agent at
any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables, when collected by any Grantor, (i) shall
be forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of the Administrative Agent, subject to withdrawal by
the Administrative Agent for the account of the Lenders only as provided in Section 6.5,
and (ii) until so turned over, shall be held by such Grantor on behalf of 

 

16

 

the Administrative Agent and the Lenders,
segregated from other funds of such Grantor. 
Each such deposit of Proceeds of Receivables shall be accompanied by a
report identifying in reasonable detail the nature and source of the payments
included in the deposit.

 

(c)          Upon
the occurrence and during the continuance of an Event of Default, at the
Administrative Agent’s request, each Grantor shall deliver to the
Administrative Agent all original (where practicable, otherwise copies will be
delivered) and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Receivables, including, without limitation,
all original orders, invoices and shipping receipts.

 

6.2.         Communications
with Obligors; Grantors Remain Liable.  (a)  The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent’s reasonable satisfaction the existence, amount and terms
of any Receivables.

 

(b)          Upon
the reasonable request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor
shall notify obligors on the Receivables that the Receivables have been
assigned to the Administrative Agent for the ratable benefit of the Agents and
the Lenders and that payments in respect thereof shall be made directly to the
Administrative Agent.

 

(c)          Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under
each Receivables to observe and perform in all material respects all the
conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise thereto.  No Agent or Lender shall have any obligation
or liability under any Receivable (or any agreement giving rise thereto) by
reason of or arising out of this Agreement or the receipt by any Agent or any
Lender of any payment relating thereto, nor shall any Agent or any Lender be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto), to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

 

6.3.         Pledged Stock. 
(a)  Unless an Event of Default shall have occurred and be
continuing and the Administrative Agent shall have given notice to the relevant
Grantor of the Administrative Agent’s intent to exercise its corresponding
rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive
all cash dividends paid in respect of the Pledged Stock and all payments made
in respect of the Pledged Notes and to exercise all voting and corporate or
other organizational rights with respect to the Investment Property; provided,
however, that no vote shall be cast or corporate or other organizational
right exercised or other action taken which, in the Administrative Agent’s
reasonable judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any provision of the Credit Agreement, this
Agreement or any other Loan Document.

 

17

 

(b)                             If an
Event of Default shall occur and be continuing and the Administrative Agent
shall give notice of its intent to exercise such rights to the relevant Grantor
or Grantors, (i) the Administrative Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Investment Property and make application thereof to the Obligations in the
order set forth in Section 6.5, and (ii) any or all of the Investment
Property shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all
voting, corporate and other rights pertaining to such Investment Property at
any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any
and all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Investment Property as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Investment Property upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate or other organizational structure of any Issuer, or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or
option pertaining to such Investment Property, and in connection therewith, the
right to deposit and deliver any and all of the Investment Property with any
committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do
so or delay in so doing.

 

(c)                              Each
Grantor hereby authorizes and instructs each Issuer of any Investment Property
pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Administrative Agent in writing that (x) states
that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Investment Property directly to the Administrative Agent.

 

6.4.                          Proceeds
to be Turned Over to Administrative Agent. 
In addition to the rights of the Agents and the Lenders specified in Section 6.1
with respect to payments of Receivables, if an Event of Default shall occur and
be continuing, at the request of the Administrative Agent all Proceeds received
by any Grantor consisting of cash, checks and other near-cash items shall be
held by such Grantor on behalf of the Agents and the Lenders, segregated from
other funds of such Grantor, and shall, forthwith upon receipt by such Grantor,
be turned over to the Administrative Agent in the exact form received by such
Grantor (duly indorsed by such Grantor to the Administrative Agent, if
required).  All Proceeds received by the
Administrative Agent hereunder shall be held by the Administrative Agent in a
Collateral Account maintained under its sole dominion and control.  All Proceeds while held by the Administrative
Agent in a Collateral Account (or by such Grantor on behalf of the
Administrative Agent and the Lenders) shall continue to be held as collateral
security for all the Obligations and shall not constitute payment thereof until
applied as provided in Section 6.5.

 

6.5.                          Application
of Proceeds.  At such intervals as
may be agreed upon by the Borrower and the Administrative Agent, or, if an
Event of Default shall have occurred and be 

 

18

 

continuing, at any time
at the Administrative Agent’s election, the Administrative Agent may apply all
or any part of Proceeds constituting Collateral, whether or not held in any
Collateral Account, and any proceeds of the guarantee set forth in Section 2,
in payment of the Obligations in the following order:

 

First,
to pay incurred and unpaid fees, costs and expenses of the Administrative Agent
under the Loan Documents, including, without limitation, the reasonable fees
and expenses of counsel to the Administrative Agent;

 

Second,
to the Administrative Agent, for application by it towards payment of amounts
remaining unpaid in respect of the Obligations, pro  rata among
the Agents and the Lenders according to the amounts of the Obligations
remaining unpaid to the Agents and the Lenders (including depositing in a cash
collateral account opened by the Administrative Agent, an amount equal to the
aggregate amount of L/C Obligations at the time of application of Proceeds
pursuant to this Section 6.5 and with respect to which the Borrower has
not previously made a deposit into a cash collateral account pursuant to Section 9
of the Credit Agreement); and

 

Third,
any balance of such Proceeds remaining after the then outstanding Obligations
shall have been paid in full, no Letters of Credit shall be outstanding and the
Commitments shall have been terminated shall be paid over to the Borrower or to
whomsoever may be lawfully entitled to receive the same.

 

6.6.                          Code
and Other Remedies.  If an Event of
Default shall occur and be continuing, the Administrative Agent, on behalf of
the Lenders, may exercise, in addition to all other rights and remedies granted
to them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the New York UCC or any other applicable law.  Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived to the extent permitted by applicable law), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of any Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may reasonably
deem best, for cash or on credit or for future delivery without assumption of
any credit risk.  Any Agent or any Lender
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption
in any Grantor, which right or equity is hereby waived and released.  Each Grantor further agrees, at the
Administrative Agent’s request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Grantor’s premises or elsewhere.  The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.6, after
deducting all reasonable costs and expenses of every kind incurred in 

 

19

 

connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys’ fees
and disbursements, to the payment in whole or in part of the Obligations, in
such order as the Administrative Agent may elect, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section 9-615(a)(3) of
the New York UCC, need the Administrative Agent account for the surplus, if
any, to any Grantor.  To the extent
permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against any Agent or any Lender arising out of the
exercise by them of any rights hereunder. 
If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.

 

6.7.                          Registration
Rights.  (a)  If the
Administrative Agent shall determine to exercise its right to sell any or all
of the Pledged Stock pursuant to Section 6.6, and if in the opinion of the
Administrative Agent it is necessary or advisable to have the Pledged Stock, or
that portion thereof to be sold, registered under the provisions of the
Securities Act, the relevant Grantor will cause the Issuer thereof to (i) execute
and deliver, and cause the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to be done all
such other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Pledged Stock, or that portion thereof
to be sold, under the provisions of the Securities Act, (ii) use its best
efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from the date of the
first public offering of the Pledged Stock, or that portion thereof to be sold,
and (iii) make all amendments thereto and/or to the related prospectus
which, in the opinion of the Administrative Agent, are necessary or advisable,
all in conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto.  Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or “Blue Sky” laws of any and all
jurisdictions which the Administrative Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of Section 11(a) of
the Securities Act.

 

(b)                             Each
Grantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner.  The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock for
the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.

 

20

 

(c)                              Each
Grantor agrees to use its best efforts to do or cause to be done all such other
acts as may be necessary to make such sale or sales of all or any portion of
the Pledged Stock pursuant to this Section 6.7 valid and binding and in
compliance with any and all other applicable Requirements of Law.  Each Grantor further agrees that a breach of
any of the covenants contained in this Section 6.7 will cause irreparable
injury to the Agents and the Lenders, that the Agents and the Lenders have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 6.7 shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred
under the Credit Agreement.

 

6.8.                          Deficiency.  Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations.

 

SECTION 7.  THE ADMINISTRATIVE AGENT

 

7.1.                          Administrative
Agent’s Appointment as Attorney-in-Fact, etc.  (a)  Each Grantor hereby
irrevocably constitutes and appoints the Administrative Agent and any officer
or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement,
and, without limiting the generality of the foregoing, each Grantor hereby
gives the Administrative Agent the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do any or all of the following:

 

(i)                                 in
the name of such Grantor or its own name, or otherwise, take possession of and indorse
and collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Receivable or with respect to any other
Collateral and file any claim or take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under any
Receivable or with respect to any other Collateral whenever payable;

 

(ii)                              in
the case of any Intellectual Property, execute and deliver, and have recorded,
any and all agreements, instruments, documents and papers as the Administrative
Agent may reasonably request to evidence the Agents’ and the Lenders’ security
interest in such Intellectual Property and the goodwill and general intangibles
of such Grantor relating thereto or represented thereby;

 

(iii)                           pay
or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and the costs
thereof;

 

21

 

(iv)                          execute,
in connection with any sale provided for in Section 6.6 or 6.7, any
indorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and

 

(v)                             (1) direct
any party liable for any payment under any of the Collateral to make payment of
any and all moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct; (2) ask
or demand for, collect, and receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in respect of
or arising out of any Collateral; (3) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other documents
in connection with any of the Collateral; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce
any other right in respect of any Collateral; (5) defend any suit, action
or proceeding brought against such Grantor with respect to any Collateral; (6) settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent may
deem appropriate; (7) assign any Copyright, Patent or Trademark (along with
the goodwill of the business to which any such Copyright, Patent or Trademark
owned by any Grantor pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the Administrative Agent shall in its
sole discretion determine; and (8) generally, sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Administrative Agent were the absolute
owner thereof for all purposes, and do, at the Administrative Agent’s option
and such Grantor’s expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Administrative Agent’s and the Lenders’
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.

 

Anything in this Section 7.1 (a) to
the contrary notwithstanding, the Administrative Agent agrees that it will not
exercise any rights under the power of attorney provided for in this Section 7.1(a) unless
an Event of Default shall have occurred and be continuing.

 

(b)                             If
any Grantor fails to perform or comply with any of its agreements contained
herein, the Administrative Agent, at its option, but without any obligation so
to do, may perform or comply, or otherwise cause performance or compliance,
with such agreement.

 

(c)                              The
expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon
at a rate per annum equal to the rate per annum at which interest would then be
payable on past due Revolving Loans that are Base Rate Loans under the Credit
Agreement, from the date of payment by the Administrative Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.

 

22

 

(d)                             Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof.  All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.

 

7.2.                          Duty
of Administrative Agent.  The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the New York UCC or otherwise, shall be to deal with it in the same manner
as the Administrative Agent deals with similar property for its own
account.  Neither the Administrative
Agent, any Lender nor any of their respective officers, directors, employees or
agents shall be liable for failure to demand, collect or realize upon any of
the Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral upon the request of any Grantor or
any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof, except if such failure or delay results from
their own gross negligence or willful misconduct.  The powers conferred on the Agents and the
Lenders hereunder are solely to protect the Agents’ and the Lenders’ interests
in the Collateral and shall not impose any duty upon any Agent or any Lender to
exercise any such powers.  The Agents and
the Lenders shall be accountable only for amounts that they actually receive as
a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor
for any act or failure to act hereunder, except for their own gross negligence
or willful misconduct.

 

7.3.                          Recording
of Financing Statements.  Pursuant to
any applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such
Grantor in such form and in such offices as the Administrative Agent determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement.  Each Grantor authorizes
the Administrative Agent to use the collateral description “all assets” in any
such financing statements.  Each Grantor
hereby ratifies and authorizes the filing by the Administrative Agent of any
financing statement with respect to the Collateral made prior to the date
hereof.

 

7.4.                          Authority
of Administrative Agent.  Each
Grantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
between the Agents and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Agents and the Lenders with full and valid authority so to act or refrain
from acting, and no Grantor shall be under any obligation, or entitlement, to
make any inquiry respecting such authority.

 

23

 

SECTION 8.  MISCELLANEOUS

 

8.1.                          Amendments
in Writing.  None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 11.1 of the Credit Agreement.

 

8.2.                          Notices.  All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 11.2 of the Credit Agreement; provided that
any such notice, request or demand to or upon any Guarantor (other than
Holdings) shall be addressed to such Guarantor at its notice address set forth
on Schedule 1.

 

8.3.                          No
Waiver by Course of Conduct; Cumulative Remedies.  No Agent or Lender shall by any act (except
by a written instrument pursuant to Section 8.1), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default.  No failure to exercise, nor any delay in
exercising, on the part of any Agent or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  A waiver by any Agent or any Lender of any
right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which the Administrative Agent or such Lender would
otherwise have on any future occasion. 
The rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any other rights or remedies
provided by law.

 

8.4.                          Enforcement
Expenses; Indemnification.  (a)  Each
Guarantor agrees to pay, or reimburse each Lender and Agent for all its costs
and reasonable expenses incurred in collecting against such Guarantor under the
guarantee contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such
Guarantor is a party, including, without limitation, the fees and disbursements
of counsel (including the allocated fees and expenses of in-house counsel) to
each Lender and of counsel to the Administrative Agent.

 

(b)                             Each
Guarantor agrees to pay, and to save the Agents and the Lenders harmless from,
any and all liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.

 

(c)                              Each
Guarantor agrees to pay, and to save the Agents and the Lenders harmless from,
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, reasonable expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 11.5 of the Credit
Agreement.

 

24

 

(d)                             The
agreements in this Section shall survive repayment of the Obligations and
all other amounts payable under the Credit Agreement and the other Loan
Documents.

 

8.5.                          Successors
and Assigns.  This Agreement shall be
binding upon the successors and assigns of each Grantor and shall inure to the
benefit of the Agents and the Lenders and their successors and assigns; provided
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent unless permitted by the Credit Agreement.

 

8.6.                          Set-Off.  Each Grantor hereby irrevocably authorizes
each Agent and each Lender at any time and from time to time while an Event of
Default shall have occurred and be continuing, without notice to such Grantor
or any other Grantor, any such notice being expressly waived by each Grantor to
the extent permitted by applicable law, to set-off and appropriate and apply
any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Agent or such Lender to
or for the credit or the account of such Grantor, or any part thereof in such
amounts as such Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Grantor to such Agent or such Lender
hereunder and claims of every nature and description of such Agent or such Lender
against such Grantor, in any currency, arising hereunder, under the Credit
Agreement or any other Loan Document to which it is a party, as such Agent or
such Lender may elect, whether or not any Agent or any Lender has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured.  Each Agent and
each Lender shall notify such Grantor promptly of any such set-off and the
application made by such Agent or such Lender of the proceeds thereof, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.  The rights of
each Agent and each Lender under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which such Agent or such Lender may have.

 

8.7.                          Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

 

8.8.                          Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

8.9.                          Section Headings.  The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.

 

8.10.                    Integration.  This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Agents and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by any Agent 

 

25

 

or any Lender relative to
subject matter hereof and thereof not expressly set forth or referred to herein
or in the other Loan Documents.

 

8.11.                    GOVERNING LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

 

8.12.                    Submission
To Jurisdiction; Waivers.  Each
Grantor hereby irrevocably and unconditionally:

 

(a)                              submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;

 

(b)                             consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;

 

(c)                              agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such Grantor (other than the
Borrower and Holdings) at its address referred to on Schedule 1, or
in the case of the Borrower and Holdings, at their respective addresses
referred to in Section 11.2 of the Credit Agreement, or at such other
address of which the Administrative Agent shall have been notified pursuant
hereto;

 

(d)                             agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other
jurisdiction; and

 

(e)                              waives,
to the maximum extent not prohibited by law, any right it may have to claim or  recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or consequential
damages.

 

8.13.                    Acknowledgements.  Each Grantor hereby acknowledges that:

 

(a)                              it
has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;

 

(b)                             no
Agent or Lender has any fiduciary relationship with or duty to any Grantor
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand, and the
Agents and Lenders, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and

 

26

 

(c)                              no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or
among the Grantors and the Lenders.

 

8.14.                    Additional
Grantors.  Each Subsidiary of
Holdings that is required to become a party to this Agreement pursuant to Section 7.9
of the Credit Agreement shall become a Grantor for all purposes of this
Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex I hereto.

 

8.15.                    Releases.  (a)  At such time as the Loans, the
Reimbursement Obligations and the other Obligations (other than Hedge Agreement
Obligations) shall have been paid in full, the Commitments have been terminated
and no Letters of Credit shall be outstanding (other than any such Letters of
Credit that the applicable Issuing Lender or Issuing Lenders shall, in its sole
discretion, permit to remain outstanding, but shall release the Revolving
Lenders from their participations therein), the Collateral shall be released
from the Liens created hereby, and this Agreement and all obligations (other
than those expressly stated to survive such termination) of the Administrative
Agent and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors.

 

(b)                             If
any of the Collateral shall be sold, transferred or otherwise Disposed of by
any Grantor in a transaction permitted by the Credit Agreement (other than to a
Loan Party), the Collateral shall be automatically released from the Liens
created hereby.

 

(c)                              At
the request and sole expense of the Borrower, a Guarantor (other than Holdings)
shall be released from its obligations hereunder and the Collateral of such
Guarantor shall be automatically released from the Liens created hereby upon
the consummation of any transaction permitted by the Credit Agreement as a
result of which such Guarantor ceases to be a Subsidiary of Holdings.

 

(d)                             At
the request and sole expense of any Grantor following any such termination or
release pursuant to paragraph (a) , (b) or (c), the Administrative
Agent shall promptly deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination
or release, without recourse or warranty by the Administrative Agent.

 

8.16.                    WAIVER OF JURY TRIAL.  EACH GRANTOR AND, BY ACCEPTANCE OF THE
BENEFITS HEREOF, EACH AGENT AND EACH LENDER, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

27

 

IN WITNESS WHEREOF, each of the undersigned
has caused this Guarantee and Collateral Agreement to be duly executed and
delivered as of the date first above written.

 

 

SCIENTIFIC
GAMES INTERNATIONAL, INC.,

 

 

	
   

  	
  By:

  	
  /s/ DeWayne E. Laird

  
	
   

  	
   

  	
  Name:
  DeWayne E. Laird

  
	
   

  	
   

  	
  Title:
    Vice President

  

 

[Signature Page to Guarantee
and Collateral Agreement]

 

 

AUTOTOTE ENTERPRISES, INC.,

 

	
   

  	
  by

  	
   

  
	
   

  	
   

  	
    /s/ DeWayne E. Laird

  
	
   

  	
   

  	
    Name:
  DeWayne E. Laird

  
	
   

  	
   

  	
    Title:   Vice President

  

 

[Signature Page to Guarantee
and Collateral Agreement]

 

 

SCIENTIFIC GAMES CORPORATION,

 

	
   

  	
  by

  	
   

  
	
   

  	
   

  	
    /s/ DeWayne E. Laird

  
	
   

  	
   

  	
    Name:

  	
  DeWayne E. Laird

  
	
   

  	
   

  	
    Title:

  	
  Vice President and Chief 

  
	
   

  	
   

  	
   

  	
  Financial Officer

  

 

[Signature Page to Guarantee
and Collateral Agreement]

 

 

SCIENTIFIC GAMES HOLDINGS CORP.,

 

	
   

  	
  by

  	
   

  
	
   

  	
   

  	
    /s/ DeWayne E. Laird

  
	
   

  	
   

  	
    Name:
  DeWayne E. Laird

  
	
   

  	
   

  	
    Title:   Vice President

  

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

MDI ENTERTAINMENT, LLC,

 

	
   

  	
  by

  	
  SCIENTIFIC
  GAMES INTERNATIONAL, 

  INC., as its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  Ira H. Raphaelson

  
	
   

  	
   

  	
    Name:

  	
  Ira
  H. Raphaelson

  
	
   

  	
   

  	
    Title:

  	
  Vice
  President, General Counsel and Secretary

  

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

SCIENTIFIC GAMES RACING, LLC,

 

	
   

  	
  by

  	
   

  
	
   

  	
   

  	
    /s/ Ira H. Raphaelson

  
	
   

  	
   

  	
    Name:

  	
  Ira H. Raphaelson

  
	
   

  	
   

  	
    Title:

  	
  Vice
  President, General Counsel 

  
	
   

  	
   

  	
   

  	
  and
  Secretary

  

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

TRACKPLAY LLC,

 

	
   

  	
  by

  	
  SCIENTIFIC
  GAMES RACING, LLC, as

  its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/ Ira H. Raphaelson

  
	
   

  	
   

  	
    Name:
  

  	
  Ira
  H. Raphaelson

  
	
   

  	
   

  	
    Title:
  

  	
  Vice
  President, General Counsel and Secretary

  of Scientific Games International, Inc.,

  its sole member

  

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

SG RACING, INC.,

 

	
   

  	
  by

  	
   

  
	
   

  	
   

  	
    /s/ DeWayne E. Laird

  
	
   

  	
   

  	
    Name:
  DeWayne E. Laird

  
	
   

  	
   

  	
    Title:   Vice President and Treasurer

  

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

SCIENTIFIC GAMES products, INC.,

 

	
   

  	
  by

  	
   

  
	
   

  	
   

  	
    /s/ DeWayne E. Laird

  
	
   

  	
   

  	
    Name:
  DeWayne E. Laird

  
	
   

  	
   

  	
    Title:   Chief Financial Officer

  

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

SCIENTIFIC GAMES SA INC.,

 

	
   

  	
  by

  	
   

  
	
   

  	
   

  	
    /s/ DeWayne E. Laird

  
	
   

  	
   

  	
    Name:
  DeWayne E. Laird

  
	
   

  	
   

  	
    Title:   Chief Financial Officer

  

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

	
   

  	
  AUTOTOTE GAMING, INC.,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
    /s/ DeWayne E. Laird

  
	
   

  	
   

  	
    Name:

  	
  DeWayne E. Laird

  
	
   

  	
   

  	
    Title:

  	
  Vice President and Chief Financial

  Officer

  

 

[Signature Page to Guarantee and Collateral Agreement]

 

 

Annex I

to

Guarantee and Collateral Agreement

 

ASSUMPTION AGREEMENT, dated as of                               ,
200  , made by                                                         ,
a                                
corporation (the “Additional Grantor”), in favor of JPMorgan Chase Bank,
N.A., as administrative agent (in such capacity, the “Administrative Agent”)
for the banks and other financial institutions (the “Lenders”) parties
to the Credit Agreement referred to below. 
All capitalized terms not defined herein shall have the meaning ascribed
to them in such Credit Agreement.

 

W  I  T  N  E
S  S  E  T  H  :

 

WHEREAS, Scientific Games International, Inc.
(the “Borrower”), Scientific Games Corporation (“Holdings”), the
Lenders, the Administrative Agent and other entities party thereto have entered
into a Credit Agreement, dated as of June 9, 2008 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”);

 

WHEREAS, in connection with the Credit
Agreement, Holdings, the Borrower and certain of its Affiliates (other than the
Additional Grantor) have entered into the Guarantee and Collateral Agreement,
dated as of June 9, 2008 (as amended, supplemented or otherwise modified
from time to time, the “Guarantee and Collateral Agreement”) in favor of
the Administrative Agent for the benefit of the Agents and the Lenders;

 

WHEREAS, the Credit Agreement requires the
Additional Grantor to become a party to the Guarantee and Collateral Agreement;
and

 

WHEREAS, the Additional Grantor has agreed to
execute and deliver this Assumption Agreement in order to become a party to the
Guarantee and Collateral Agreement;

 

NOW, THEREFORE, IT IS AGREED:

 

1.  Guarantee
and Collateral Agreement.  By
executing and delivering this Assumption Agreement, the Additional Grantor, as
provided in Section 8.14 of the Guarantee and Collateral Agreement, hereby
becomes a party to the Guarantee and Collateral Agreement as a Grantor
thereunder with the same force and effect as if originally named therein as a
Grantor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of a Grantor thereunder.  The information set forth in Annex 1-A hereto
is hereby added to the information set forth on Schedules                            *
to the Guarantee and Collateral Agreement. 
The Additional Grantor hereby represents and warrants that each of the
representations and warranties contained in Section 4 of the Guarantee and
Collateral Agreement is true and correct on and as of the date hereof (after
giving effect to this Assumption Agreement) as if made on and as of such date.

 

*              Refer to each
Schedule which needs to be supplemented.

 

 

2.  GOVERNING LAW.  THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.

 

IN WITNESS WHEREOF, the undersigned has
caused this Assumption Agreement to be duly executed and delivered as of the
date first above written.

 

	
   

  	
  [ADDITIONAL
  GRANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

2

 

Annex II

to

Guarantee and Collateral Agreement

 

[FORM OF] PERFECTION CERTIFICATE

 

Reference is made to the Credit
Agreement dated as of June 9, 2008 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Scientific Games
International, Inc., a Delaware corporation (the “Borrower”),
Scientific Games Corporation, a Delaware corporation (“Holdings”), the
lenders from time to time party thereto (the “Lenders”) and JPMorgan
Chase Bank, N.A., as Administrative Agent for the Lenders (in such capacity,
the “Administrative Agent”). 
Capitalized terms used but not defined herein have the meanings assigned
in the Credit Agreement or the Guarantee and Collateral Agreement referred to
therein, as applicable.

 

The undersigned, a Financial
Officer and a Legal Officer, respectively, of the Borrower, hereby certify to
the Administrative Agent and each other Secured Party as follows:

 

1.             Names.  (a)   The exact legal name of each Grantor, as such
name appears in its respective certificate of formation, is as set forth on
Schedule 1(a).

 

(b)  Set forth on
Schedule 1(b) is each other legal name each Grantor has had in the past
five years, together with the date of the relevant change.

 

(c)  Except as set
forth on Schedule 1(c) hereto, no Grantor has changed its identity or
corporate structure in any way within the past five years.  Changes in identity or corporate structure
would include mergers, consolidations and acquisitions, as well as any change
in the form, nature or jurisdiction of organization.

 

(d)  Set forth on
Schedule 1(d) is a list of all other names (including trade names or
similar appellations) used by each Grantor or any of its divisions or other
business units in connection with the conduct of its business or the ownership
of its properties at any time during the past five years.

 

(e)  Set forth on
Schedule 1(e) is the Organizational Identification Number, if any, issued
by the jurisdiction of formation of each Grantor that is a registered
organization.

 

(f)  Set forth on
Schedule 1(f) is the Federal Taxpayer Identification Number of each
Grantor.

 

2.  Current Locations. 
(a)  The chief executive office of each Grantor is located at
the address set forth on Schedule 2(a).

 

(b)  Set forth on Schedule 2(b) opposite the name of
each Grantor are all locations where such Grantor maintains any books or
records relating to any Accounts Receivable (with each location at which
chattel paper, if any, is kept being indicated by an “*”).

 

3

 

(c)  The jurisdiction
of formation of each Grantor that is a registered organization is set forth
opposite its name below on Schedule 2(c).

 

(d) Set forth on Schedule 2(d) opposite the name of each
Grantor are all the locations where such Grantor maintains any Equipment or
other Collateral not identified above.

 

(e)  No Grantor maintains places of business at locations
other than those identified in paragraph (a), (b), (c) or (d) above.

 

(f)  Persons other than such Grantor that have possession of any
of the Collateral of such Grantor as indicated on Schedule 2(f).

 

3.  Unusual
Transactions.  All Accounts have been
originated by the Grantors and all Inventory has been acquired by the Grantors
in the ordinary course of business.

 

4.  File Search
Reports.  File search reports have
been obtained from each Uniform Commercial Code filing office identified with
respect to such Grantor in Section 2(c) hereof, and such search
reports reflect no liens against any of the Collateral other than those
permitted under the Credit Agreement.

 

5.  UCC Filings.  Financing statements in substantially the
form of Schedule 5 hereto have been prepared for filing in the proper Uniform
Commercial Code filing office in the jurisdiction in which each Grantor is
located and, to the extent any of the collateral is comprised of fixtures,
timber to be cut or as extracted collateral from the wellhead or minehead, in
the proper local jurisdiction, in each case as set forth with respect to such
Grantor in Section 2(c) hereof.

 

6.  Schedule of
Filings.  Attached hereto as Schedule
6 is a schedule setting forth, with respect to the filings described in Section 5
above, each filing and the filing office in which such filing is to be made.

 

7.  Stock
Ownership and other Equity Interests.  Attached hereto as Schedule 7 is a true and
correct list of all the issued and outstanding stock, partnership interests,
limited liability company membership interests or other equity interest of
Holdings and each Subsidiary and the record and beneficial owners of such
stock, partnership interests, membership interests or other equity interests.

8.  Debt
Instruments.  Attached hereto as
Schedule 8 is a true and correct list of all promissory notes and other
evidence of indebtedness held by a Grantor that are required to be pledged
under the Guarantee and Collateral Agreement.

 

9.  Mortgage
Filings.  Attached hereto as
Schedule 9 is a schedule setting forth, with respect to each Mortgaged
Property, (a) the exact name of the Person that owns such property as such
name appears in its certificate of incorporation or other organizational
document, (b) if different from the name identified pursuant to clause
(a), the exact name of the current record owner of such property reflected in
the records of the filing office for such property identified pursuant to the
following clause and (c) the filing office in which a Mortgage with
respect to such property must 

 

4

 

be filed or recorded in order
for the Administrative Agent to obtain a perfected security interest therein.

 

10.  Intellectual
Property.  Attached hereto as
Schedule 10(A) in proper form for filing with the United States
Patent and Trademark Office is a schedule setting forth all Patents and
Trademarks owned by any Grantor, including the name of the registered owner and
the registration or application number and the Patent Licenses and Trademark
Licenses owned by any Grantor. Attached hereto as Schedule 10(B) in
proper form for filing with the United States Copyright Office is a schedule
setting forth all of each Grantor’s Copyrights, including the name of the
registered owner, the registration number and the registration date of each
Copyright, and the Copyright Licenses owned by any Grantor.

[This space left intentionally blank]

 

5

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