Document:

2nd Amend. to 3rd Amended & Restated Loan and Security Agreement

 Exhibit 10.1 
  
 SECOND AMENDMENT TO 
 THIRD AMENDED AND RESTATED 
 LOAN AND SECURITY AGREEMENT 
  
 THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (“Second
Amendment”) is made as of the 30th day of May, 2003 by and among PW Eagle, Inc., a Minnesota corporation
(“Borrower”), the lenders who are signatories hereto (“Lenders”), and Fleet Capital Corporation, a Rhode Island corporation (“FCC”), as agent for Lenders hereunder (FCC, in such capacity, being “Agent”).

  
 W I T N E S S
E T H: 
  
 WHEREAS, Borrower, Agent and Lenders entered into
a certain Third Amended and Restated Loan and Security Agreement dated as of September 30, 2002 as amended by a certain First Amendment to Third Amended and Restated Loan and Security Agreement dated as of February 4, 2003 by and among Borrowers,
Lenders and Agent (said Third Amended and Restated Loan and Security Agreement, as so amended, is hereinafter referred to as the “Loan Agreement”); and 
  
 WHEREAS, Borrower desires to amend and modify certain provisions of the Loan Agreement and, subject to the terms hereof, Agent and Lenders
are willing to agree to such amendments and modifications; 
  
 NOW THEREFORE, in
consideration of the premises, the mutual covenants and agreements herein contained, and any extension of credit heretofore, now or hereafter made by Agent and Lenders to Borrowers, the parties hereto hereby agree as follows: 
  
 1. Definitions. All capitalized terms used herein without
definition shall have the meaning given to them in the Loan Agreement. 
  
 2. Amended Definitions. The definitions “Borrowing Base” and “Revolving Credit Maximum Amount” are hereby deleted and the following are inserted in their stead: 
  
 “Borrowing Base—as at any date of determination thereof, an amount equal to the
lesser of: 
  
 a. the Maximum Revolving Loan Amount; or 
  
 b. an amount equal to: 
  
 (i) the sum of eighty-five percent (85%) of the net amount of Eligible Accounts (other than Eligible
Accounts with dating terms) outstanding at such date, plus eighty-five percent (85%) of the lesser of Eight Million Dollars ($8,000,000) or the net amount of Eligible Accounts with dating terms outstanding at such date; 
  
 PLUS 
  
 (ii) the lesser of (1) Thirty-Million ($30,000,000); or (2) fifty-five percent (55%) of the value of
Eligible Inventory at such date calculated on the basis of the lower of cost or market with the cost of raw materials and finished goods calculated on a first-in, first-out basis; provided that the amount of allocated fixed manufacturing overhead
included within the value of Eligible Inventory at any date shall not exceed Three Million Dollars ($3,000,000); 
  

 1 

 MINUS (subtract from the lesser of (i) or (ii) above) 
  
 (i) an amount equal to the sum of (a) the LC Amount plus (b)
the amount of any reserve established by Agent pursuant to Section 1.1.1 above. 
  
 For purposes hereof, the net amount of Eligible Accounts at any time shall be the face amount of such Eligible Accounts less any and all returns, rebates, discounts (which may, at Agent’s option, be calculated on shortest terms),
credits, allowances or excise taxes of any nature at any time issued, owing, claimed Account Debtors, granted, outstanding or payable in connection with such Accounts at such time. Agent and Lenders agree that Accounts derived from sales on items of
“FOB Seller’s (Borrower’s) plant” (or the equivalent) may be included within Eligible Accounts from the date of any such sale. 
  
 * * * 
  
 Revolving Credit Maximum Amount—Forty-Nine Million Nine Hundred Fifty Thousand Dollars ($49,950,000), as such amount may be
reduced from time to time pursuant to the terms of the Agreement.” 
  
 3. Amendment Fee. In order to induce Agent and Lenders to enter into this Second Amendment, Borrower shall pay to Agent for the ratable benefit of Lenders, an amendment fee of $25,000. Said amendment fee shall be fully earned,
non-refundable and due and payable on the date hereof. 
  
 4.
Revolving Notes and Term Notes. Borrower shall execute and deliver to each Lender the amended and restated Revolving Notes and the amended and Restated Term Notes in the form attached hereto and incorporated herein as Exhibits 1.1,
1.1(a), 1.3 and 1.3(a). 
  
 5. Signature Block. The
signature block to the Loan Agreement is hereby amended to read as the signature block to this Second Amendment. 
  
 6. Execution in Counterparts. This Second Amendment may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 
  
 7. Conditions Precedent. This Second Amendment shall become effective on the satisfaction of each of the following conditions precedent:

  
 (i) Borrower, Agent and Lenders shall have
executed and delivered to each other this Second Amendment; 
  
 (ii) Borrower shall have executed and delivered to Agent for the benefit of Lenders the amended and restated Revolving Notes and amended and restated Term Notes in the forms attached hereto and incorporated herein as
Exhibits 1.1, 1.1(a), 1.3 and 1.3(a); and 
  
 (iii) Borrower shall have paid to Agent, for the ratable benefit of Lenders, the $25,000 amendment fee. 
  
 Upon the effectiveness of this Second Amendment, Lenders shall deliver to Borrower the Revolving Notes and the Term Notes delivered to Lenders on the
Closing Date marked “Amended and Superceded.” 
  

 2 

 8. Continuing Effect. Except as otherwise specifically set out herein, the provisions of
the Loan Agreement shall remain in full force and effect. 
  
 (Signature Page Follows) 
  

 3 

 (Signature Page to Second Amendment to 
 Third Amended and Restated Loan and Security Agreement) 
  
 IN WITNESS WHEREOF, this Second Amendment has been duly executed as of the day and year specified at the beginning hereof. 
  

	PW EAGLE, INC., (“Borrower”)
		
	 By:
	 	 /s/    ROGER R.
ROBB        

	 Name:
	 	 Roger R. Robb

	 Title:
	 	 CFO

	
	FLEET CAPITAL CORPORATION, as Agent and as a Lender
		
	 By:
	 	 /s/    BRIAN
CONOLE        

	 Name:
	 	 Brian Conole

	 Title:
	 	 Senior Vice President

	
	Revolving Loan Commitment: $29,970,000 (60%) Term Loan as of the Second Amendment Effective Date: $10,020,000 (60%)
	
	THE CIT GROUP/BUSINESS CREDIT, INC., as
Lender
		
	 By:
	 	 /s/    JACK A.
MYERS        

	 Name:
	 	 Jack A. Myers

	 Title:
	 	 Vice President

	
	 Address:

	
	 Ten South LaSalle Street
 22nd Floor
 Chicago, IL 60603-1097
 Attention: Regional Credit
Manager                            
 Telephone No.: (312) 424-9700
 Facsimile No.: (312) 424-9740

	
	 Revolving Loan Commitment: $19,980,000 (40%)
 Term Loan as of the Second Amendment
 Effective Date: $6,680,000 (40%)

  

 4 

 EXHIBIT 1.1 
  
 FORM OF REVOLVING NOTE 
  

	 $29,970.000
	 	 Amended and Restated as of
 May 30, 2003
 Chicago, Illinois

  
 FOR VALUE RECEIVED, the undersigned,
(hereinafter “Borrower”), hereby PROMISES TO PAY to the order of Fleet Capital Corporation, a Rhode Island corporation (“Lender”), or its registered assigns, at the principal office of Fleet Capital Corporation, as agent for such
Lender, or at such other place in the United States of America as the holder of this Note may designate from time to time in writing, in lawful money of the United States of America and in immediately available funds, the principal amount of Twenty
Nine Million Nine Hundred Seventy Dollars ($29,970,000), or such lesser principal amount as may be outstanding pursuant to the Loan Agreement (as hereinafter defined) with respect to the Revolving Credit Loan, together with interest on the unpaid
principal amount of this Note outstanding from time to time. 
  
 This Note is one
of the Revolving Credit Notes referred to in, and issued pursuant to, that certain Third Amended and Restated Loan and Security Agreement dated as of September 30, 2002, by and among Borrower, the lender signatories thereto (including Lender) and
Fleet Capital Corporation (“FCC”), as agent for such Lenders (FCC in such capacity “Agent”) (hereinafter amended from time to time, the “Loan Agreement”), and is entitled to the benefit and security of the Loan
Agreement. All of the terms, covenants and conditions of the Loan Agreement and the Security Documents are hereby made a part of this Note and are deemed incorporated herein in full. All capitalized terms herein, unless otherwise defined, unless
otherwise specifically defined in this Note, shall have the meanings ascribed to them in the Loan Agreement. 
  
 The principal amount of the indebtedness evidenced hereby shall be payable in the amounts and on the dates specified in the Loan Agreement and, if not sooner paid in full, on August 20, 2005, unless the term hereof is
extended in accordance with the Loan Agreement. Interest thereon shall be paid until such principal amount is paid in full at such interest rates and at such times as are specified in the Loan Agreement. 
  
 Upon and after the occurrence, and during the continuation, of an Event of Default, this Note
shall or may, as provided in the Loan Agreement, become or be declared immediately due and payable. 
  
 The right to receive principal of, and stated interest on, this Note may only be transferred in accordance with the provisions of the Loan Agreement. 
  
 Demand, presentment, protest and notice of nonpayment and protest are hereby waived by Borrower. 
  

 Exhibit 1.1 – Page 1 

 This Note shall be interpreted, governed by, and construed in accordance with, the internal laws of the State of
Illinois. 
  

	PW EAGLE, INC.
		
	 By:
	 	 /s/    ROGER R.
ROBB        

	 Name:
	 	 Roger R. Robb

	 Title:
	 	 CFO

  

 Exhibit 1.1 – Page 2 

 EXHIBIT 1.1(a) 
  
 FORM OF REVOLVING NOTE 
  

	 $19,980,000
	 	 Amended and Restated as of
 May 30, 2003
 Chicago, Illinois

  
 FOR VALUE RECEIVED, the undersigned,
(hereinafter “Borrower”), hereby PROMISES TO PAY to the order of The CIT Group/Business Credit, Inc., a Delaware corporation (“Lender”), or its registered assigns, at the principal office of Fleet Capital Corporation, as agent
for such Lender, or at such other place in the United States of America as the holder of this Note may designate from time to time in writing, in lawful money of the United States of America and in immediately available funds, the principal amount
of Nineteen Million Nine Hundred Eighty Thousand Dollars ($19,980,000), or such lesser principal amount as may be outstanding pursuant to the Loan Agreement (as hereinafter defined) with respect to the Revolving Credit Loan, together with interest
on the unpaid principal amount of this Note outstanding from time to time. 
  
 This Note is one of the Revolving Credit Notes referred to in, and issued pursuant to, that certain Third Amended and Restated Loan and Security Agreement dated as of September 30, 2002, by and among Borrower, the lender signatories thereto
(including Lender) and Fleet Capital Corporation (“FCC”), as agent for such Lenders (FCC in such capacity “Agent”) (hereinafter amended from time to time, the “Loan Agreement”), and is entitled to the benefit and
security of the Loan Agreement. All of the terms, covenants and conditions of the Loan Agreement and the Security Documents are hereby made a part of this Note and are deemed incorporated herein in full. All capitalized terms herein, unless
otherwise defined, unless otherwise specifically defined in this Note, shall have the meanings ascribed to them in the Loan Agreement. 
  
 The principal amount of the indebtedness evidenced hereby shall be payable in the amounts and on the dates specified in the Loan Agreement and, if not sooner paid in
full, on August 20, 2005, unless the term hereof is extended in accordance with the Loan Agreement. Interest thereon shall be paid until such principal amount is paid in full at such interest rates and at such times as are specified in the Loan
Agreement. 
  
 Upon and after the occurrence, and during the continuation, of an
Event of Default, this Note shall or may, as provided in the Loan Agreement, become or be declared immediately due and payable. 
  
 The right to receive principal of, and stated interest on, this Note may only be transferred in accordance with the provisions of the Loan Agreement. 
  
 Demand, presentment, protest and notice of nonpayment and protest are hereby waived by
Borrower. 
  

 Exhibit 1.1(a) – Page 1 

 This Note shall be interpreted, governed by, and construed in accordance with, the internal laws of the State of
Illinois. 
  

	PW EAGLE, INC.
		
	 By:
	 	 /s/    ROGER R.
ROBB        

	 Name:
	 	 Roger R. Robb

	 Title:
	 	 CFO

  

 Exhibit 1.1(a) – Page 2 

 Exhibit 1.3 
  
 FORM OF TERM LOAN NOTE 
  
 (Term Note) 
  

	 $10,020,000
	 	 Amended and Restated
 as of May 30, 2003
 Chicago, Illinois

  
 FOR VALUE RECEIVED, the
undersigned (hereinafter “Borrower”), hereby promises to pay to the order of Fleet Capital Corporation, a Rhode Island corporation (hereinafter “Lender”), or its registered assigns at the office of Fleet Capital Corporation, as
agent for such Lender, or at such other place in the United States of America as the holder of this Note may designate from time to time in writing, in lawful money of the United States, in immediately available funds, at the time of payment, the
principal sum of Ten Million Twenty Thousand Dollars ($10,020,000), together with interest from and after the date hereof on the unpaid principal balance outstanding from time to time. 
  
 This Secured Promissory Note (the “Note”) is one of the Term Notes referred to in, and is issued pursuant to, that certain Third
Amended and Restated Loan and Security Agreement dated as of September 30, 2002, by and among Borrower, the lender signatories thereto (including Lender) and Fleet Capital Corporation (“FCC”) as Agent for said lenders (FCC in such capacity
“Agent”) (hereinafter, as amended from time to time, the “Loan Agreement”), and is entitled to all of the benefits and security of the Loan Agreement. All of the terms, covenants and conditions of the Loan Agreement and the
Security Documents are hereby made a part of this Note and are deemed incorporated herein in full. All capitalized terms used herein, unless otherwise specifically defined in this Note, shall have the meanings ascribed to them in the Loan Agreement.

  
 For so long as no Event of Default shall have occurred and be continuing the
principal amount and accrued interest of this Note shall be due and payable on the dates and in the manner hereinafter set forth: 
  
 (a) Interest on the unpaid principal balance outstanding from time to time shall be paid at such interest rates and at such times as are specified in the
Loan Agreement; 
  
 (b) Principal shall be due and payable
quarterly commencing on June 30, 2002, and continuing on each September 30, December 31, March 31 and June 30 thereafter to and including June 30, 2005, in installments equal to Three Hundred Ninety Thousand Dollars ($390,000). 
  
 (c) The entire remaining principal amount then outstanding, together with any
and all other amounts due hereunder, shall be due and payable on August 20, 2005. 
  
 Notwithstanding the foregoing, the entire unpaid principal balance and accrued interest on this Note shall be due and payable immediately upon any termination of the Loan Agreement pursuant to Section 4 thereof. 
  
 This Note shall be subject to mandatory prepayment in accordance with the provisions of
Section 3.3 of the Loan Agreement. Borrower may also prepay this Note in the manner provided in Section 4 of the Loan Agreement. 
  
 Upon the occurrence, and during the continuation, of an Event of Default, this Note shall or may, as provided in the Loan Agreement, become or be declared immediately due
and payable. 
  
 The right to receive principal of, and stated interest on, this
Note may only be transferred in accordance with the provisions of the Loan Agreement. 
  
 Demand, presentment, protest and notice of nonpayment and protest are hereby waived by Borrower. 
  
 This Note shall be governed by, and construed and enforced in accordance with, the laws of the State of Illinois. 
  

 Exhibit 1.3 – Page 1 

	PW EAGLE, INC. 
		
	 By:
	 	 /s/    ROGER R.
ROBB        

	 Name:
	 	 Roger R. Robb

	 Title:
	 	 CFO

  

 Exhibit 1.3 – Page 2 

 Exhibit 1.3(a) 
  

FORM OF TERM LOAN NOTE 
  
 (Term Note) 
  

	 $6,680,000
	 	 Amended and Restated
 as of May 30, 2003
 Chicago, Illinois

  
 FOR VALUE RECEIVED, the
undersigned (hereinafter “Borrower”), hereby promises to pay to the order of The CIT Group/Business Credit, Inc., a Delaware corporation (hereinafter “Lender”), or its registered assigns at the office of Fleet Capital
Corporation, as agent for such Lender, or at such other place in the United States of America as the holder of this Note may designate from time to time in writing, in lawful money of the United States, in immediately available funds, at the time of
payment, the principal sum of Six Million Six Hundred Eighty Million Dollars ($6,680,000), together with interest from and after the date hereof on the unpaid principal balance outstanding from time to time. 
  
 This Secured Promissory Note (the “Note”) is one of the Term Notes referred to in,
and is issued pursuant to, that certain Third Amended and Restated Loan and Security Agreement dated as of September 30, 2002, by and among Borrower, the lender signatories thereto (including Lender) and Fleet Capital Corporation (“FCC”)
as Agent for said lenders (FCC in such capacity “Agent”) (hereinafter, as amended from time to time, the “Loan Agreement”), and is entitled to all of the benefits and security of the Loan Agreement. All of the terms, covenants
and conditions of the Loan Agreement and the Security Documents are hereby made a part of this Note and are deemed incorporated herein in full. All capitalized terms used herein, unless otherwise specifically defined in this Note, shall have the
meanings ascribed to them in the Loan Agreement. 
  
 For so long as no Event of
Default shall have occurred and be continuing the principal amount and accrued interest of this Note shall be due and payable on the dates and in the manner hereinafter set forth: 
  
 (a) Interest on the unpaid principal balance outstanding from time to time shall be paid at such interest rates and at such
times as are specified in the Loan Agreement; 
  
 (b) Principal
shall be due and payable quarterly commencing on June 30, 2003 and continuing on each September 30, December 31, March 31 and June 30 thereafter to and including June 30, 2005, in installments equal to Two Hundred Sixty Thousand Dollars ($260,000).

  
 (c) The entire remaining principal amount then outstanding,
together with any and all other amounts due hereunder, shall be due and payable on August 20, 2005. 
  
 Notwithstanding the foregoing, the entire unpaid principal balance and accrued interest on this Note shall be due and payable immediately upon any termination of the Loan Agreement pursuant to Section 4 thereof.

  
 This Note shall be subject to mandatory prepayment in accordance with the
provisions of Section 3.3 of the Loan Agreement. Borrower may also prepay this Note in the manner provided in Section 4 of the Loan Agreement. 
  
 Upon the occurrence, and during the continuation, of an Event of Default, this Note shall or may, as provided in the Loan Agreement, become or be declared immediately due
and payable. 
  
 The right to receive principal of, and stated interest on, this
Note may only be transferred in accordance with the provisions of the Loan Agreement. 
  
 Demand, presentment, protest and notice of nonpayment and protest are hereby waived by Borrower. 
  
 This Note shall be governed by, and construed and enforced in accordance with, the laws of the State of Illinois. 
  

 3 

	PW EAGLE, INC. 
		
	 By:
	 	 /s/    ROGER R.
ROBB        

	 Name:
	 	 Roger R. Robb

	 Title:
	 	 CFO

  

 4 

 ASSIGNMENT AND ACCEPTANCE AGREEMENT 
  
 THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Agreement”) made as
of May 30, 2003, by and between The CIT Group/Business Credit, Inc., a Delaware Corporation (“Assignee”) and Fleet Capital Corporation, a Rhode Island Corporation (“Assignor”). 
  
 Fleet Capital Corporation, in its separate capacities as Agent and Lender,
The CIT Group/Business Credit, Inc., as a Lender and PW Eagle, Inc. a Minnesota corporation (“Borrower”), entered into a certain Third Amended or Restated Loan and Security Agreement dated as of September 30, 2002 (the “Loan
Agreement”). The parties are entering into this Agreement to provide for the transfer by Assignor of a portion of its rights and obligations under the Loan Agreement to Assignee. 
  
 Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Loan
Agreement. 
  
 NOW THEREFORE, in consideration of the mutual
agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Assignee and Assignor agree as follows: 
  
 1. Assignment. 
  
 (a) Assignor hereby sells, assigns and transfers to Assignee, and Assignee hereby purchases and assumes from the Assignor as
of the Effective Date (as defined in Section 4 hereof) subject to the terms and conditions set forth in Section 11.9 of the Loan Agreement (x) (i) a Four Hundred Fifty-Eight Thousand Seven Hundred Thirty Dollars and 55/100 ($458,730.55) Revolving
Loan Commitment, including without limitation, an equivalent undivided interest and participation in and to all Letters of Credit and LC Guaranties, whether outstanding on the Effective Date or issued thereafter and (ii)(a) Fifty Three Thousand One
Hundred Fifteen and 80/100 Dollars ($53,115.80) portion of Assignor’s Term Loan and (y) a proportional .317461111% portion of the Revolving Credit Loans and outstanding as of the Effective Date (the “Assigned Loans”). As of the date
hereof, the face amount of all outstanding Letters of Credit and LC Guaranties is
                                        
             Dollars ($                ). 
  
 (b) The Assignee hereby irrevocably purchases, takes and assumes, effective
on the Effective Date, all duties, liabilities, obligations, rights and interests assigned and delegated to it by the Assignor with respect to the Assigned Loans (including, without limitation, the obligation to make Revolving Credit Loans or to
incur obligations in respect to Letters of Credit and LC Guaranties up to the amount of the Assignee’s aggregated Revolving Loan Commitment ) and agrees to perform and assume all such duties, liabilities and obligations, and shall have all such
rights and interests, on and after the Effective Date as if it had been an original party to the Loan Agreement and each of the other Loan Documents having a Revolving Credit Loan Commitment and Term Loan equal to forty percent (40%) of the total
Revolving Credit and Term Loans under the Loan Agreement all as is more specifically set forth in Section 1(a) hereof. 
  
 (c) Assignor makes no representation or warranty and assumes no responsibility with respect to: (x) any statements, warranties or representations made in
or in connection with the Loan Agreement or the other Loan Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement and the other Loan Documents, other than that it is the legal and
beneficial owner of the interests being assigned by it hereunder, that such interests are free and clear of any adverse claim, that it is legally authorized to enter into this Agreement and that this Agreement constitutes its legal, valid and
binding obligations; and (y) the financial condition of Borrower or the 
  

 5 

 performance or observance by Borrower of any of its obligations under the Loan Agreement or any of the other Loan
Documents. 
  
 (d) The Assignee (i) represents and warrants that
it is legally authorized to enter into this Agreement, that the same constitutes its legal, valid and binding obligations and that all necessary consents, licenses, approvals, authorizations of, and all registrations or declarations with, any
governmental or regulatory authority or body (collectively, the “Consents” and individually, a “Consent”) presently required in connection with its execution, delivery and performance of this Agreement or for the enforcement of
this Agreement against it have been obtained or made and are in full force and effect, and agrees that it shall (x) use its best efforts to obtain any additional Consents that become necessary for such execution, delivery, performance or
enforcement, (y) comply in all material aspects with the terms of each such Consent and (z) notify the Agent promptly upon any such Consent being withdrawn, suspended or otherwise limited in effect or ceasing to be in full force and effect or of any
such additional Consent becoming necessary; (ii) confirms that it has received a copy of the Loan Agreement and each of the other Loan Documents, together with copies of financial statements which Assignor has identified as the most recent financial
statements delivered in accordance with the terms of the Loan Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement; (iii) agrees that it will,
independently and without reliance upon Agent, Assignor 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 decisions in taking or not taking action under the
Loan Agreement and each of the other Loan Documents; (iv) appoints and authorizes Agent to take such action as Agent on its behalf and to exercise such powers under the Loan Agreement and each of the other Loan Documents as are delegated to Agent by
the terms thereof; (v) confirms that it is purchasing and assuming the interests in the Loans assigned hereby, the Loan Agreement and each of the other Loan Documents hereunder in the course of making loans in the ordinary course of its commercial
lending business and not with any present intention of distributing or selling such interests (except as permitted under the Loan Agreement); and (vi) agrees that it will perform in accordance with their terms all the obligations which by the terms
of the Loan Agreement and each of the other Loan Documents are required to be performed by it as a Lender under the Loan Agreement and each of the other Loan Documents. 
  
 (e) Assignee agrees to indemnify Assignor from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Assignor in any way relating to or arising out of Assignee’s failure to perform
Assignee’s obligations with respect to the Revolving Credit Loan assigned hereby on or after the Effective Date. 
  
 2. Payment for Assigned Loans. 
  
 (a) On or before 11:00 a.m. on the Effective Date, Assignee shall deliver to Assignor in immediately available funds an amount (the “Purchase
Price”) equal to .317461111% of the aggregate principal amount of all of the Revolving Credit Loans and the Term Loan outstanding on the Effective Date. 
  
 (b) Notwithstanding the terms of the Loan Agreements with respect to: (a) the first interest payments due after the Effective Date on the Base LIBOR
Revolving Portion(s), the LIBOR Term Portion(s), the Base Rate Revolving Portion or the Base Rate Term Portion, included within the Assigned Loans, (b) the first unused line fee due after the Effective Date and (c) fees received by Agent prior to
the Effective Date in respect to Letters of Credit or LC Guaranties outstanding on the Effective Date: 
  
 (i) Whenever Agent receives a payment of such interest, Agent will promptly pay over to Assignee interest on the LIBOR Revolving
Portion(s), the LIBOR Term 
  

 6 

 Portion(s), the Base Rate Revolving Portion and the Base Rate Term Portion assigned hereunder at the
interest rates provided for in the Loan Agreement calculated from the Effective Date; 
  
 (ii) Whenever Agent receives a payment of such unused line fee, it will promptly pay over to Assignee its proportionate share of said fee calculated from the Effective Date in accordance with the terms of the Loan
Agreement; and 
  
 (iii) Whenever Agent receives a payment of such
fees in respect to Letters of Credit on LC Guaranties outstanding on the Effective Date, it will promptly pay over to the Assignee its proportionate share of said fees calculated from the Effective Date in accordance with the terms of the Loan
Agreement. 
  
 Agent shall pay over to Assignor (or to another
applicable Lender) (x) the difference between the total amount of the first interest payments due after the Effective Date in respect to the LIBOR Revolving Portion(s), the LIBOR Term Portion(s), the Base Rate Revolving Portion or the Base Rate Term
Portion and the amounts paid to Assignee pursuant to 2(b)(i) above, (y) the difference between the first payment of unused line fee due after the Effective Date and the amounts paid to Assignee pursuant to Section 2(b)(ii) above and (z) the
difference between the first payment of fees in respect to Letters of Credit on LC Guaranties outstanding on the Effective Date and the amounts paid to Assignee pursuant to Section 2(b)(iii) above. 
  
 3. Effective Date. 
  
 (a) This Agreement shall become effective on the first date
(the “Effective Date”) when each of the following conditions precedent is satisfied in full: 
  
 (ii) Agent shall have received counterparts of this Agreement which, when taken together, bear the signature of all of the parties hereto;

  
 (iii) Agent shall have received, for and on
behalf of Assignor and Assignee, that certain Second Amendment to Amended and Restated Loan and Security Agreement (“Second Amendment”) executed by all parties thereto, and the Notes to be delivered to Assignor and Assignee, pursuant to
this Agreement and the Second Amendment; 
  
 (iv)
Assignee shall have delivered to the Assignor in immediately available funds the Purchase Price; and 
  
 (v) The assignment(s) and acceptance(s) contemplated hereby complies (comply) with the terms and provisions of the Loan Agreement,
including, without limitation, Section 11.9. 
  
 4. Governing Law. 
  
 This Agreement and the
obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Illinois applicable to contracts made and performed in such state, without regard to the principles thereof regarding
conflict of laws. 
  
 5. Counterparts.

  
 This Agreement may be executed in any number of counterparts,
and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. 
  

 7 

 IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed by their duly
authorized representatives, all as of the day and year first above written. 
  

	FLEET CAPITAL CORPORATION, as Assignee
		
	 By:
	 	 /s/    BRIAN
CONOLE        

	 Name:
	 	 Brian Conole

	 Title:
	 	 Senior Vice President

  

	THE CIT GROUP/BUSINESS CREDIT, INC., as Assignee
		
	 By:
	 	 /s/    JACK A.
MYERS        

	 Name:
	 	 Jack A. Myers

	 Title:
	 	 Vice President

  

 8 

 Accepted and Agreed to 
 this 30th day of May 2003 
  

	
	

  

	 FLEET CAPITAL CORPORATION, as Agent
	 	 	 	 
					
	By:	 	 /s/    BRIAN
CONOLE        

	 	 	 	 	 	 
	 Name:
	 	 Brian Conole

	 	 	 	 	 	 
	 Title:
	 	 Senior Vice President

	 	 	 	 	 	 

  

 9<PAGE>

                                                                     Exhibit 4.1

                                                                  EXECUTION COPY

                          REGISTRATION RIGHTS AGREEMENT

                            Dated as of July 1, 2003
                                  by and among

                           Danka Business Systems PLC
                                    as Issuer

                   The Guarantors Listed on Schedule A hereto

                                       and

                            Bear, Stearns & Co. Inc.

--------------------------------------------------------------------------------

<PAGE>

     This Registration Rights Agreement (this "Agreement") is made and entered
into as of July 1, 2003 by and among Danka Business Systems PLC, a company
incorporated with limited liability under the Companies Act of 1985 with
registered number 1101386 and with its registered office at Masters House, 107
Hammersmith Road, London W14 0QH, England (the "Company" and the "Issuer"), the
Company's subsidiaries listed on Schedule A hereto (the "Guarantors"), and Bear,
Stearns & Co. Inc. (the "Initial Purchaser"), who has agreed to purchase the
Company's 11% Series A Senior Notes due 2010 (the "Series A Notes") pursuant to
the Purchase Agreement (as defined below).

     This Agreement is made pursuant to the Purchase Agreement, dated June 24,
2003 (the "Purchase Agreement"), by and among the Company, the Guarantors and
the Initial Purchaser. In order to induce the Initial Purchaser to purchase the
Series A Notes, the Company and the Guarantors have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchaser set
forth in Section 8 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meaning assigned to them in the Indenture,
dated July 1, 2003 among the Company, the Guarantors and HSBC Bank USA, as
Trustee, relating to the Series A Notes and the Series B Notes (as defined
below) (the "Indenture").

     The parties hereby agree as follows:

SECTION 1.  DEFINITIONS

     As used in this Agreement, the following capitalized terms shall have the
following meanings:

     Act: The Securities Act of 1933, as amended.

     Affiliate: As defined in Rule 144 of the Act.

     Broker-Dealer: Any broker or dealer registered under the Exchange Act.

     Certificated Securities: Definitive Notes, as defined in the Indenture.

     Closing Date: The date hereof.

     Commission: The Securities and Exchange Commission.

     Consummate: An Exchange Offer shall be deemed "Consummated" for purposes of
this Agreement upon the occurrence of (a) the filing and effectiveness under the
Act of the Exchange Offer Registration Statement relating to the Series B Notes
to be issued in the Exchange Offer, (b) the maintenance of such Exchange Offer
Registration Statement continuously effective and the keeping of the Exchange
Offer open for a period not less than the period required pursuant to Section
3(b) hereof and (c) the delivery by the Company to the Registrar under the
Indenture of Series B Notes in the same aggregate principal amount as the
aggregate principal amount of Series A Notes tendered by Holders thereof
pursuant to the Exchange Offer.

     Consummation Deadline: As defined in Section 3(b) hereof.

<PAGE>

     Effectiveness Deadline: As defined in Section 3(a) and 4(a) hereof.

     Exchange Act: The Securities Exchange Act of 1934, as amended.

     Exchange Offer: The exchange and issuance by the Company of a principal
amount of Series B Notes (which shall be registered pursuant to the Exchange
Offer Registration Statement) equal to the principal amount of Series A Notes
that are tendered by such Holders in connection with such exchange and issuance.

     Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.

     Exempt Resales: The transactions in which the Initial Purchaser propose to
sell the Series A Notes to certain "qualified institutional buyers," as such
term is defined in Rule 144A under the Act and pursuant to Regulation S under
the Act.

     Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.

     Holders: As defined in Section 2 hereof.

     Prospectus: The prospectus included in a Registration Statement at the time
such Registration Statement is declared effective, as amended or supplemented by
any prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such
Prospectus.

     Recommencement Date: As defined in Section 6(d) hereof.

     Registration Default: As defined in Section 5 hereof.

     Registration Statement: Any registration statement of the Company and the
Guarantors relating to (a) an offering of Series B Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, in each case, (i) that is filed
pursuant to the provisions of this Agreement and (ii) including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.

     Regulation S: Regulation S promulgated under the Act.

     Rule 144: Rule 144 promulgated under the Act.

     Series B Notes: The Company's 11% Series B Senior Notes due 2010 to be
issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as
contemplated by Section 4 hereof.

     Shelf Registration Statement: As defined in Section 4 hereof.

     Suspension Notice: As defined in Section 6(d) hereof.

     TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in
effect on the date of the Indenture.

                                       3

<PAGE>

     Transfer Restricted Securities: Each (A) Series A Note, until the earliest
to occur of (i) the date on which such Note has been exchanged by a Person other
than a Broker-Dealer for an Exchange Note in the Exchange Offer, (ii) following
the exchange by a Broker-Dealer in the Exchange Offer of such Note for an
Exchange Note, the date on which such Exchange Note is sold to a purchaser who
receives from such Broker-Dealer on or prior to the date of such sale a copy of
the prospectus contained in the Exchange Offer Registration Statement, (iii) the
date on which such Note has been effectively registered under the Act and
disposed of in accordance with the Shelf Registration Statement, (iv) the date
on which such Note is distributed to the public pursuant to Rule 144 under the
Act or is saleable pursuant to Rule 144(k) under the Act (or similar provisions
then in effect) or (iv) the date such Series A Note ceases to be outstanding and
(B) Series B Note held by a Broker Dealer until the date on which such Series B
Note is disposed of by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including the
delivery of the Prospectus contained therein); provided, however, that the
Transfer Restricted Securities with respect to which the Company has caused to
be filed and declared effective an Exchange Offer Registration Statement and has
consummated an Exchange Offer, in each case pursuant to and in accordance with
Section 3 hereof, and which have not been tendered by the Exchange Date by the
Holder thereof shall be deemed not to be Transfer Restricted Securities, except
to the extent the Holder provides the notice contemplated by Section 4(a)(ii)
hereof.

SECTION 2.  HOLDERS

     A Person is deemed to be a holder of Transfer Restricted Securities (each,
a "Holder") whenever such Person owns Transfer Restricted Securities.

SECTION 3.  REGISTERED EXCHANGE OFFER

     (a)  Unless the Exchange Offer shall not be permitted by applicable federal
law or Commission policy (after the procedures set forth in Section 6(a)(i)
below have been complied with), the Company and the Guarantors shall (i) cause
the Exchange Offer Registration Statement to be filed with the Commission on or
prior to 90 days after the Closing Date (such 90th day being the "Filing
Deadline"), (ii) use commercially reasonable efforts to cause such Exchange
Offer Registration Statement to become effective on or prior to 180 days after
the Closing Date (such 180th day being the "Effectiveness Deadline"), (iii) in
connection with the foregoing, (A) use commercially reasonable efforts to file
all pre-effective amendments to such Exchange Offer Registration Statement as
may be necessary in order to cause it to become effective, (B) use commercially
reasonable efforts to file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act and
(C) use commercially reasonable efforts to cause all necessary filings, if any,
in connection with the registration and qualification of the Series B Notes to
be made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer; provided, however, that neither the Company
nor any Guarantor shall be required in connection therewith to register or
qualify as a foreign corporation where it is not now so qualified or to take any
action that would subject it to taxation or require it to file a general consent
to service of process in any jurisdiction where it is not now so subject, and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and will use commercially reasonable efforts to Consummate the Exchange
Offer. The Exchange Offer shall be on the appropriate form permitting (i)
registration of the

                                       4

<PAGE>

Series B Notes to be offered in exchange for the Series A Notes that are
Transfer Restricted Securities and (ii) resales of Series B Notes by
Broker-Dealers that tendered into the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of market making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any Affiliates of the Company) as contemplated by
Section 3(c) below.

     (b)  The Company and the Guarantors shall use their commercially reasonable
efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantors shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Series B Notes shall be included
in the Exchange Offer Registration Statement. The Company and the Guarantors
shall use their commercially reasonable efforts to cause the Exchange Offer to
be Consummated on or prior to 30 business days after the date on which the
Exchange Offer Registration Statement has become effective, (such 30th day being
the "Consummation Deadline").

     (c)  The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Transfer Restricted
Securities acquired directly from the Company or any Affiliate of the Company),
may exchange such Transfer Restricted Securities pursuant to the Exchange Offer.
Such "Plan of Distribution" section shall also contain all other information
with respect to such sales by such Broker-Dealers that the Commission may
require in order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Transfer Restricted Securities held by any such Broker-Dealer, except to the
extent required by the Commission as a result of a change in policy, rules or
regulations after the date of this Agreement.

     (d)  Because such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Series B
Notes received by such Broker-Dealer in the Exchange Offer, the Company and the
Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. To the extent necessary to ensure that the Prospectus
contained in the Exchange Offer Registration Statement is available for sales of
Series B Notes by Broker-Dealers, the Company and the Guarantors agree to use
commercially reasonable efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented, amended and current as required
by and subject to the provisions of Section 6(a) and 6(c) hereof to the extent
necessary to ensure that it is available for resales of Transfer Restricted
Securities acquired by Broker-Dealers for their own accounts as a result of
market making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company or any Affiliate of the
Company), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period ending on the earlier of (i) 270 days
from the date on which the Exchange Offer Registration Statement is declared
effective and (ii) the date on which Broker-Dealers are no

                                       5

<PAGE>

longer required to deliver a prospectus in connection with market making
activities or other trading activities; provided, however, that any such
Broker-Dealer desiring the Company and the Guarantors to keep the Exchange Offer
Registration Statement continuously effective shall notify the Company in
writing that such Broker-Dealer acquired the applicable Transfer Restricted
Securities as a result of market making activities or other trading activities
(other than Transfer Restricted Securities acquired from the Company or any
Affiliate of the Company) such that the Broker-Dealer would be required to
deliver a prospectus under the Act upon a subsequent sale or other disposition
of such Transfer Restricted Securities. The Company and the Guarantors shall
provide sufficient copies of the latest version of such Prospectus to such
Broker-Dealers, promptly upon request at any time during such period.

SECTION 4.  SHELF REGISTRATION

     (a)  Shelf Registration. If (i) the Company and the Guarantors are not (A)
required to file the Exchange Offer Registration Statement or (B) permitted to
Consummate the Exchange Offer because, in either case, the Exchange Offer is not
permitted by applicable law or Commission policy (after the Company and the
Guarantors have complied with the procedures set forth in Section 6(a)(i) below)
or (ii) any Holder of Transfer Restricted Securities shall notify the Company
prior to the 20th day following the Consummation of the Exchange Offer that (A)
such Holder was prohibited by applicable law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the Series
B Notes acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (C)
such Holder is a Broker-Dealer and holds Series A Notes acquired directly from
the Company or any of its Affiliates, then, upon receipt of such notice, the
Company and the Guarantors shall:

 (x) use commercially reasonable efforts to file, on or prior to 60 days
after the earlier of (i) the date on which the Company determines that the
Exchange Offer Registration Statement cannot be filed as a result of clause
(a)(i) above and (ii) the date on which the Company receives the notice
specified in clause (a)(ii) above, (such earlier date, the "Filing Deadline"), a
shelf registration statement pursuant to Rule 415 under the Act (which may be an
amendment to the Exchange Offer Registration Statement (the "Shelf Registration
Statement")), relating to all Transfer Restricted Securities, the Holders of
which shall have provided the information required pursuant to Section 4(b)
hereof, and

 (y) use their commercially reasonable efforts to cause such Shelf
Registration Statement to be declared effective on or prior to 120 days after
the Filing Deadline for the Shelf Registration Statement (such 120th day the
"Effectiveness Deadline").

     If, after the Company has filed an Exchange Offer Registration Statement
that satisfies the requirements of Section 3(a) above, the Company is required
to file and make effective a Shelf Registration Statement solely because the
Exchange Offer is not permitted under applicable federal law (i.e., clause
(a)(i) above), then the filing of the Exchange Offer Registration Statement
shall be deemed to satisfy the requirements of clause (x) above; provided that,
in such event, the Company shall remain obligated to use commercially reasonable
efforts to meet the Effectiveness Deadline set forth in clause (y).

                                       6

<PAGE>

     To the extent necessary to ensure that the Shelf Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use commercially reasonable efforts to keep any Shelf
Registration Statement required by this Section 4(a) continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Sections 6(b) and (c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least 18 months (as extended
pursuant to Section 6(c)(i)) following the Closing Date, or such shorter period
as will terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto.

     (b)  Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information as the Company may reasonably request, including the information
specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for
use in connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. No Holder of Transfer Restricted
Securities shall be entitled to liquidated damages pursuant to Section 5 hereof
unless and until such Holder shall have provided all such information. Each
selling Holder agrees to promptly furnish additional information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading. By acquiring the Series A Notes or
Series B Notes, each Holder agrees to provide the indemnity set forth in Section
8 hereof with respect to the information such Holder furnishes to the Company in
writing expressly for use in any Shelf Registration Statement. The Company and
the Guarantors shall not be obligated to supplement such Shelf Registration
Statement after it has been declared effective by the Commission more than two
times quarterly to reflect additional Holders.

SECTION 5.  LIQUIDATED DAMAGES

     If (i) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the applicable Filing Deadline, (ii) any such
Registration Statement has not been declared effective by the Commission on or
prior to the applicable Effectiveness Deadline, (iii) the Exchange Offer has not
been Consummated on or prior to the Consummation Deadline or (iv) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose during the period in which it is required to be effective
pursuant to Section 3 or 4 without being succeeded within two business days by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself promptly declared effective (each such event referred to in
clauses (i) through (iv), a "Registration Default"), then the Company and the
Guarantors hereby jointly and severally agree to pay to each Holder of Transfer
Restricted Securities affected thereby liquidated damages in an amount equal to
$.05 per week per $1,000 in principal amount of Transfer Restricted Securities
held by such Holder for each week or portion thereof that the Registration
Default continues for the first 90-day period immediately following the
occurrence of such Registration Default. The amount of the liquidated damages
shall increase by an additional

                                       7

<PAGE>

$.05 per week per $1,000 in principal amount of Transfer Restricted Securities
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of liquidated damages of $.50 per week
per $1,000 in principal amount of Transfer Restricted Securities; provided that
the Company and the Guarantors shall in no event be required to pay liquidated
damages for more than one Registration Default at any given time. Following the
cure of all Registration Defaults, liquidated damages shall cease to accrue.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (i) above, (2) upon the effectiveness of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon Consummation of the
Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the liquidated damages
payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.

     All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company and the Guarantors to pay liquidated damages with respect to securities
shall survive until such time as such obligations with respect to such
securities shall have been satisfied in full.

     Notwithstanding anything to the contrary in this Section 5, the Company and
the Guarantors shall not be required to pay liquidated damages to a Holder of
Transfer Restricted Securities if such Holder's failure to receive Series B
Notes and/or inability to use a Shelf Registration Statement arises from such
Holder's failure to comply with its obligations to make the representations set
forth in Section 6(a) or to provide the information required to be provided by
it, if any, pursuant to Section 4(b).

SECTION 6.  REGISTRATION PROCEDURES

     (a)  Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company and the Guarantors shall (x) comply with all applicable
provisions of Section 6(c) below, (y) use their commercially reasonable efforts
to effect such exchange and to permit the resale of Series B Notes by
Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof and (z) comply with
all of the following provisions:

          (i)    If, following the date hereof there has been announced a change
     in Commission policy with respect to exchange offers such as the Exchange
     Offer, that in the reasonable opinion of counsel to the Company raises a
     substantial question as to whether the Exchange Offer is permitted by
     applicable federal law, the Company and the Guarantors hereby agree to seek
     a no-action letter or other favorable decision from the

                                       8

<PAGE>

     Commission allowing the Company and the Guarantors to Consummate an
     Exchange Offer for such Transfer Restricted Securities. The Company and the
     Guarantors hereby agree to pursue the issuance of such a decision to the
     Commission staff level. In connection with the foregoing, the Company and
     the Guarantors hereby agree to take all such other actions as may be
     reasonably requested by the Commission or otherwise required in connection
     with the issuance of such decision.

          (ii)   As a condition to its participation in the Exchange Offer, each
     Holder of Transfer Restricted Securities (including, without limitation,
     any Holder who is a Broker Dealer) shall furnish, upon the request of the
     Company, prior to the Consummation of the Exchange Offer, a written
     representation to the Company and the Guarantors (which may be contained in
     the letter of transmittal contemplated by the Exchange Offer Registration
     Statement) to the effect that (A) it is not an Affiliate of the Company,
     (B) it is not engaged in, and does not intend to engage in, and has no
     arrangement or understanding with any person to participate in, a
     distribution of the Series B Notes to be issued in the Exchange Offer, (C)
     it is acquiring the Series B Notes in its ordinary course of business (D)
     it is not acting on behalf of any person who could not truthfully make the
     foregoing representations and (E) such other representations as may be
     reasonably necessary under applicable Commission rules, regulations or
     interpretations. As a condition to its participation in the Exchange Offer
     each Holder using the Exchange Offer to participate in a distribution of
     the Series B Notes shall acknowledge and agree that, if the resales are of
     Series B Notes obtained by such Holder in exchange for Series A Notes
     acquired directly from the Company or an Affiliate thereof, it (1) could
     not, under Commission policy as in effect on the date of this Agreement,
     rely on the position of the Commission enunciated in Morgan Stanley and
     Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation
     (available May 13, 1988), as interpreted in the Commission's letter to
     Shearman & Sterling dated July 2, 1993, and similar no-action letters
     (including, if applicable, any no-action letter obtained pursuant to clause
     (i) above), and (2) must comply with the registration and prospectus
     delivery requirements of the Act in connection with a secondary resale
     transaction and that such a secondary resale transaction must be covered by
     an effective registration statement containing the selling security holder
     information required by Item 507 or 508, as applicable, of Regulation S-K.

          (iii)  Prior to effectiveness of the Exchange Offer Registration
     Statement, the Company and the Guarantors shall provide a supplemental
     letter to the Commission (A) stating that the Company and the Guarantors
     are registering the Exchange Offer in reliance on the position of the
     Commission enunciated in Exxon Capital Holdings Corporation (available May
     13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as
     interpreted in the Commission's letter to Shearman & Sterling dated July 2,
     1993, and, if applicable, any no-action letter obtained pursuant to clause
     (i) above, (B) including a representation that neither the Company nor any
     Guarantor has entered into any arrangement or understanding with any Person
     to distribute the Series B Notes to be received in the Exchange Offer and
     that, to the best of the Company's and each Guarantor's information and
     belief, each Holder participating in the Exchange Offer is acquiring the
     Series B Notes in its ordinary course of business and has no arrangement or
     understanding with any Person to participate in the distribution of the
     Series B Notes received in the Exchange Offer and (C) any other undertaking
     or representation required by

                                       9

<PAGE>

     the Commission as set forth in any no-action letter obtained pursuant to
     clause (i) above, if applicable.

     (b)  Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall:

          (i)    comply with all the provisions of Section 6(c) below and use
     their commercially reasonable efforts to effect such registration to permit
     the sale of the Transfer Restricted Securities being sold in accordance
     with the intended method or methods of distribution thereof (as indicated
     in the information furnished to the Company pursuant to Section 4(b)
     hereof), and pursuant thereto the Company and the Guarantors will prepare
     and file with the Commission a Registration Statement relating to the
     registration on any appropriate form under the Act, which form shall be
     available for the sale of the Transfer Restricted Securities in accordance
     with the intended method or methods of distribution thereof within the time
     periods and otherwise in accordance with the provisions hereof, and

          (ii)   issue, upon the request of any Holder or purchaser of Series A
     Notes covered by any Shelf Registration Statement contemplated by this
     Agreement, Series B Notes having an aggregate principal amount equal to the
     aggregate principal amount of Series A Notes sold pursuant to the Shelf
     Registration Statement and surrendered to the Company for cancellation; the
     Company shall register Series B Notes on the Shelf Registration Statement
     for this purpose and issue the Series B Notes to the purchasers of
     securities subject to the Shelf Registration Statement in the names as such
     purchasers shall designate.

     (c)  General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement, the Company and the
Guarantors shall:

          (i)    use their commercially reasonable efforts to keep such
     Registration Statement continuously effective and provide all requisite
     financial statements for the period specified in Section 3 or 4 of this
     Agreement, as applicable. Upon the occurrence of any event that would cause
     any such Registration Statement or the Prospectus contained therein (A) to
     contain an untrue statement of material fact or omit to state any material
     fact necessary to make the statements therein not misleading or (B) not to
     be effective and usable for resale of Transfer Restricted Securities during
     the period required by this Agreement, the Company and the Guarantors shall
     file promptly an appropriate amendment to such Registration Statement
     curing such defect, and, if Commission review is required, use their
     commercially reasonable efforts to cause such amendment to be declared
     effective as soon as practicable.

          (ii)   use commercially reasonable efforts to prepare and file with
     the Commission such amendments and post-effective amendments to the
     applicable Registration Statement as may be necessary to keep such
     Registration Statement effective for the applicable period set forth in
     Section 3 or 4 hereof, as the case may be, or such shorter period as will
     terminate when all Transfer Restricted Securities covered by such
     Registration Statement have been sold; use commercially reasonable efforts
     to cause the Prospectus to be supplemented by any required Prospectus
     supplement, and as so

                                       10

<PAGE>

     supplemented to be filed pursuant to Rule 424 under the Act, and to comply
     fully with Rules 424, 430A and 462, as applicable, under the Act in a
     timely manner; and comply with the provisions of the Act with respect to
     the disposition of all securities covered by such Registration Statement
     during the applicable period in accordance with the intended method or
     methods of distribution by the sellers thereof set forth in such
     Registration Statement or supplement to the Prospectus;

          (iii)  advise each selling Holder promptly and, if requested by such
     Holder, confirm such advice in writing, (A) when the Prospectus or any
     Prospectus supplement or post-effective amendment has been filed, and, with
     respect to any applicable Registration Statement or any post-effective
     amendment thereto, when the same has become effective, (B) of any request
     by the Commission for amendments to the Registration Statement or
     amendments or supplements to the Prospectus or for additional information
     relating thereto, (C) of the issuance by the Commission of any stop order
     suspending the effectiveness of the Registration Statement under the Act or
     of the suspension by any state securities commission of the qualification
     of the Transfer Restricted Securities for offering or sale in any
     jurisdiction, or the initiation of any proceeding for any of the preceding
     purposes, (D) of the existence of any fact or the happening of any event
     that makes any statement of a material fact made in the Registration
     Statement, the Prospectus, any amendment or supplement thereto or any
     document incorporated by reference therein untrue, or that requires the
     making of any additions to or changes in the Registration Statement in
     order to make the statements therein not misleading, or that requires the
     making of any additions to or changes in the Prospectus in order to make
     the statements therein, in the light of the circumstances under which they
     were made, not misleading (it being understood that in the case of this
     clause 6(iii)(D), only the existence of the fact or event must be disclosed
     and the nature of the facts or events may be kept confidential for such
     period as reasonably required for bona fide business reasons). If at any
     time the Commission shall issue any stop order suspending the effectiveness
     of the Registration Statement, or any state securities commission or other
     regulatory authority shall issue an order suspending the qualification or
     exemption from qualification of the Transfer Restricted Securities under
     state securities or Blue Sky laws, the Company and the Guarantors shall use
     their commercially reasonable efforts to obtain the withdrawal or lifting
     of such order at the earliest possible time;

          (iv)   subject to Section 6(c)(i) hereof, if any fact or event
     contemplated by Section 6(c)(iii)(D) above shall exist or have occurred,
     prepare a supplement or post-effective amendment to the Registration
     Statement or related Prospectus or any document incorporated therein by
     reference or file any other required document so that, as thereafter
     delivered to the purchasers of Transfer Restricted Securities, the
     Prospectus will not contain an untrue statement of a material fact or omit
     to state any material fact necessary to make the statements therein, in the
     light of the circumstances under which they were made, not misleading;

          (v)    furnish to each selling Holder in connection with such exchange
     or sale, if any, before filing with the Commission, copies of any
     Registration Statement or any Prospectus included therein or any amendments
     or supplements to any such Registration Statement or Prospectus (including
     all documents incorporated by reference after the initial

                                       11

<PAGE>

     filing of such Registration Statement), which documents will be subject to
     the review of such Holders in connection with such sale, if any, for a
     period of at least five Business Days, and which documents the Company will
     use commercially reasonable efforts to reflect such comments as any Holder
     will reasonably propose, and the Company will not file any such
     Registration Statement or Prospectus or any amendment or supplement to any
     such Registration Statement or Prospectus (including all such documents
     incorporated by reference) to which a Holder of Transfer Restricted
     Securities covered by such Registration Statement shall reasonably object
     in writing within five Business Days after the receipt thereof. A Holder
     shall be deemed to have reasonably objected to such filing if such
     Registration Statement, amendment, Prospectus or supplement, as applicable,
     as proposed to be filed, contains an untrue statement of a material fact or
     omit to state any material fact necessary to make the statements therein
     not misleading or fails to comply with the applicable requirements of the
     Act;

          (vi)   promptly after the filing of any document that is to be
     incorporated by reference into a Registration Statement or Prospectus,
     provide copies of such document to each selling Holder named in any
     Registration Statement in connection with such exchange or sale, if any;
     make the Company's and the Guarantors' representatives available as may be
     reasonably necessary for discussion of such document and other customary
     due diligence matters;

          (vii)  make available, during reasonable business hours, for
     inspection in the offices where such records are normally maintained, by
     each Holder and any attorney or accountant retained by such Holders, all
     relevant financial and other records, pertinent corporate documents of the
     Company and the Guarantors as may be reasonably necessary for them to
     exercise applicable due diligence responsibility subject to appropriate
     confidentiality agreements and cause the Company's and the Guarantors'
     officers, directors and employees to supply all information reasonably
     requested by any such Holder, attorney or accountant in connection with
     such Registration Statement or any post-effective amendment thereto
     subsequent to the filing thereof and prior to its effectiveness;

          (viii) if requested by any Holders in connection with such exchange or
     sale, promptly include in any Registration Statement or Prospectus,
     pursuant to a supplement or post-effective amendment if necessary, such
     information as such selling Holders may reasonably request to have included
     therein, including, without limitation, information relating to the "Plan
     of Distribution" of the Transfer Restricted Securities; and make all
     required filings of such Prospectus supplement or post-effective amendment
     as soon as reasonably practicable after the Company is notified of the
     matters to be included in such Prospectus supplement or post-effective
     amendment;

          (ix)   furnish to each selling Holder in connection with such exchange
     or sale, without charge, at least one copy of the Registration Statement,
     as first filed with the Commission, and of each amendment thereto,
     including all documents incorporated by reference therein and all exhibits
     (including exhibits incorporated therein by reference);

          (x)    deliver to each selling Holder without charge, as many copies
     of the Prospectus (including each preliminary prospectus) and any amendment
     or supplement

                                       12

<PAGE>
     thereto as such Persons reasonably may request; the Company and the
     Guarantors hereby consent to the use (in accordance with law) of the
     Prospectus and any amendment or supplement thereto by each selling Holder
     in connection with the offering and the sale of the Transfer Restricted
     Securities covered by the Prospectus or any amendment or supplement
     thereto;

          (xi)   upon the request of Holders who collectively hold an aggregate
     principal amount of Transfer Restricted Securities in excess of 50% of the
     outstanding principal amount of Transfer Restricted Subsidiaries (the
     "Requesting Holders"), enter into such agreements (including underwriting
     agreements) and make such representations and warranties and take all such
     other actions in connection therewith in order to expedite or facilitate
     the disposition of the Transfer Restricted Securities pursuant to any
     applicable Registration Statement contemplated by this Agreement as may be
     reasonably requested by any Holder of Transfer Restricted Securities in
     connection with any sale or resale pursuant to any applicable Shelf
     Registration Statement, which agreements must be in customary form. In such
     connection, the Company and the Guarantors shall:

                 (A)  upon the reasonable request of the Requesting Holders,
          furnish (or in the case of paragraphs (2) and (3) below, use its
          commercially reasonable efforts to cause to be furnished) to each
          selling Holder, upon Consummation of the Exchange Offer or upon the
          effectiveness of the Shelf Registration Statement, as the case may be:

                      (1)  a certificate, dated such date, signed on behalf of
                 the Company and each Guarantor by an appropriate officer of the
                 Company and such Guarantor, confirming, as of the date thereof,
                 the matters set forth in Sections 8(a) and 8(d) of the Purchase
                 Agreement;

                      (2)  opinion(s), dated the date of Consummation of the
                 Exchange Offer or the date of effectiveness of the Shelf
                 Registration Statement, as the case may be, of counsel (which
                 may be the General Counsel of the Company) for the Company and
                 the Guarantors covering such matters customarily covered in
                 such opinions as such parties may reasonably request, which
                 shall be reasonably satisfactory to the Requesting Holders; and

                      (3)  a customary comfort letter, dated the date of
                 Consummation of the Exchange Offer, or as of the date of
                 effectiveness of the Shelf Registration Statement, as the case
                 may be, from the Company's independent accountants, in the
                 customary form and covering matters of the type customarily
                 covered in comfort letters to underwriters in connection with
                 underwritten offerings; and

                 (B)  deliver such other documents and certificates as may be
          reasonably requested by the selling Holders to evidence compliance
          with the matters covered in clause (A) above and with reasonable and
          customary conditions contained in the

                                       13

<PAGE>

          agreements, if any, entered into by the Company and the Guarantors
          pursuant to this clause (xi);

          (xii)  prior to any public offering of Transfer Restricted Securities,
     cooperate with the selling Holders and their counsel in connection with the
     registration and qualification of the Transfer Restricted Securities under
     the securities or Blue Sky laws of such jurisdictions as the selling
     Holders may reasonably request and do any and all other acts or things
     reasonably necessary or advisable to enable the disposition in such
     jurisdictions of the Transfer Restricted Securities covered by the Shelf
     Registration Statement; provided, however, that neither the Company nor any
     Guarantor shall be required to register or qualify as a foreign corporation
     where it is not now so qualified or to take any action that would subject
     it to the service of process in suits or to taxation, other than as to
     matters and transactions relating to the Registration Statement, in any
     jurisdiction where it is not now so subject;

          (xiii) in connection with any sale of Transfer Restricted Securities
     that will result in such securities no longer being Transfer Restricted
     Securities, cooperate with the Holders to facilitate the timely preparation
     and delivery of certificates representing Transfer Restricted Securities to
     be sold and not bearing any restrictive legends; and to register such
     Transfer Restricted Securities in such denominations and such names as the
     selling Holders may reasonably request at least two Business Days prior to
     such sale of Transfer Restricted Securities;

          (xiv)  use their commercially reasonable efforts to cause the Transfer
     Restricted Securities covered by the Registration Statement to be
     registered with or approved by such other governmental agencies or
     authorities as may be necessary to enable the seller or sellers thereof to
     consummate the disposition of such Transfer Restricted Securities, subject
     to the proviso contained in clause (xii) above;

          (xv)   provide a CUSIP number for all Transfer Restricted Securities
     not later than the effective date of a Registration Statement covering such
     Transfer Restricted Securities and provide the Trustee under the Indenture
     with printed certificates for the Transfer Restricted Securities which are
     in a form eligible for deposit with the Depository Trust Company;

          (xvi)  otherwise use their commercially reasonable efforts to comply
     with all applicable rules and regulations of the Commission, and make
     generally available to its security holders with regard to any applicable
     Registration Statement, as soon as reasonably practicable, a consolidated
     earnings statement meeting the requirements of Rule 158 (which need not be
     audited) covering a twelve-month period beginning after the effective date
     of the Registration Statement (as such term is defined in paragraph (c) of
     Rule 158 under the Act); and

          (xvii) cause the Indenture to be qualified under the TIA not later
     than the effective date of the first Registration Statement required by
     this Agreement and, in connection therewith, cooperate with the Trustee and
     the Holders to effect such changes to the Indenture as may be required for
     such Indenture to be so qualified in accordance with the

                                       14

<PAGE>

     terms of the TIA; and execute and use its commercially reasonable efforts
     to cause the Trustee to execute, all documents that may be required to
     effect such changes and all other forms and documents required to be filed
     with the Commission to enable such Indenture to be so qualified in a timely
     manner.

     (d)  Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"Suspension Notice"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "Recommencement
Date"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.

SECTION 7.  REGISTRATION EXPENSES

     (a)  All expenses incident to the Company's and the Guarantors' performance
of or compliance with this Agreement will be borne by the Company and the
Guarantors, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses;
(ii) all fees and expenses of compliance with federal securities and state Blue
Sky or securities laws; (iii) all expenses of printing (including printing
certificates for the Series B Notes to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company and the Guarantors; (v)
all application and filing fees in connection with listing the Series B Notes on
a national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).

     The Company will, in any event, bear its and the Guarantors' internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or the Guarantors.

     (b)  In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchaser and

                                       15

<PAGE>

the Holders of Transfer Restricted Securities who are tendering Series A Notes
into in the Exchange Offer and/or selling or reselling Series A Notes or Series
B Notes pursuant to the "Plan of Distribution" contained in the Exchange Offer
Registration Statement or the Shelf Registration Statement, as applicable, for
the reasonable fees and disbursements of not more than one counsel, who shall be
Latham & Watkins LLP unless another firm shall be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared. Each Holder shall pay all
expenses of its counsel except as provided in this paragraph (b), all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Holder's Transfer Restricted Securities pursuant
to a Shelf Registration Statement.

SECTION 8.  INDEMNIFICATION

     (a)  The Company and the Guarantors agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all losses,
claims, damages, liabilities and judgments, (including without limitation, any
reasonable legal or other reasonable expenses incurred in connection with
investigating or defending any matter, including any action that could give rise
to any such losses, claims, damages, liabilities or judgments) caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement, preliminary Prospectus or Prospectus (or any amendment
or supplement thereto) provided by the Company to any Holder or any prospective
purchaser of Series B Notes or registered Series A Notes, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by an untrue statement or omission or alleged untrue statement or
omission that is based upon information relating to any of the Holders furnished
in writing to the Company by any of the Holders; provided, however, that neither
the Company nor any Guarantor will be liable to any Indemnified Party (as
defined) (or any person who controls such party within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) with respect to any untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact made in any preliminary Prospectus to the extent that any such
loss, claim, damage, liability, judgment or expense resulted from the fact that
such Indemnified Party (as defined) sold Transfer Restricted Securities to a
person to whom such Indemnified Party (as defined) failed to send or give, at or
prior to the written confirmation of sale of such securities, a copy of a final
Prospectus (as amended or supplemented), if the Company or any Guarantor has
previously furnished copies thereof (sufficiently in advance of the closing of
such sale to allow for distribution thereof in a timely manner) to such
Indemnified Party (as defined) and the loss, claim, damage, liability, judgment
or expense of such Indemnified Party (as defined) resulted from an untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact contained in or omitted from such preliminary Prospectus which was
corrected in such final Prospectus.

     (b)  Each Holder of Transfer Restricted agrees, severally and not jointly,
to indemnify and hold harmless the Company and the Guarantors, and their
respective directors and officers, and each person, if any, who controls (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the
Company, or the Guarantors to the same extent as the foregoing indemnity

                                       16

<PAGE>

from the Company and the Guarantors set forth in section (a) above, but only
with reference to information furnished in writing to the Company by such Holder
expressly for use in any Registration Statement. In no event shall any Holder,
its directors, officers or any Person who controls such Holder be liable or
responsible for any amount in excess of the amount by which the total amount
received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages that such Holder, its directors, officers or any Person who controls
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.

     (c)  In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"Indemnified Party"), the Indemnified Party shall promptly notify the person
against whom such indemnity may be sought (the "Indemnifying Party") in writing
and the Indemnifying Party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any Indemnified Party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the Indemnified Party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the Indemnifying Party, (ii) the Indemnifying Party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
Indemnified Party or (iii) the named parties to any such action (including any
impleaded parties) include both the Indemnified Party and the Indemnifying
Party, and the Indemnified Party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the Indemnifying Party (in which case the
Indemnifying Party shall not have the right to assume the defense of such action
on behalf of the Indemnified Party). In any such case, the Indemnifying Party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one firm of attorneys (in addition to any local counsel)
for all indemnified parties and all such fees and expenses shall be reimbursed
as they are incurred and billed to the Indemnifying Party. Such firm shall be
designated in writing by the Requisite Holders, in the case of the parties
indemnified pursuant to Section 8(a), and by the Company and Guarantors, in the
case of parties indemnified pursuant to Section 8(b). The Indemnifying Party
shall indemnify and hold harmless the Indemnified Party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than twenty
business days after the Indemnifying Party shall have received a request from
the Indemnified Party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the Indemnifying
Party) and, prior to the date of such settlement, the Indemnifying Party shall
have failed to comply with such reimbursement request. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or

                                       17

<PAGE>

threatened action in respect of which the Indemnified Party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the Indemnified Party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the Indemnified Party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the Indemnified Party.

     (d)  To the extent that the indemnification provided for in this Section 8
is unavailable to an Indemnified Party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors, on the one hand, and the Holders, on the other hand, from their sale
of Transfer Restricted Securities or (ii) if the allocation provided by clause
8(d)(i) is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 8(d)(i) above
but also the relative fault of the Company and the Guarantors, on the one hand,
and of the Holder, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
fault of the Company and the Guarantors, on the one hand, and of the Holder, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or such Guarantor, on the one hand, or by the Holder, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
judgments referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 8(a), any reasonable
legal or other reasonable fees and expenses incurred by such party in connection
with investigating or defending any action or claim.

     The Company, the Guarantors and each Holder agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8, no Holder, its directors, its
officers or any Person, if any, who controls such Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 8(c) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder hereunder
and not joint.

                                       18

<PAGE>

SECTION 9.  RULE 144A AND RULE 144

     The Company and each Guarantor agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in which
the Company or such Guarantor (i) is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon the reasonable request of any Holder, to
such Holder or beneficial owner of Transfer Restricted Securities in connection
with any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby
in a timely manner in order to permit resales of such Transfer Restricted
Securities pursuant to Rule 144.

SECTION 10. MISCELLANEOUS

     (a)  Remedies. The Company and the Guarantors acknowledge and agree that
any failure by the Company and the Guarantors to comply with their respective
obligations under Sections 3 and 4 hereof may result in material irreparable
injury to the Initial Purchaser or the Holders for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial Purchaser or
any Holder may obtain such relief as may be required to specifically enforce the
Company's and the Guarantor's obligations under Sections 3 and 4 hereof. The
Company and the Guarantors further agree to waive the defense in any action for
specific performance that a remedy at law would be adequate.

     (b)  No Inconsistent Agreements. Neither the Company nor any Guarantor
will, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions hereof. The
rights granted to the Holders hereunder do not in any way conflict with and are
not inconsistent with the rights granted to the holders of the Company's and the
Guarantors' securities under any agreement in effect on the date hereof.

     (c)  Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company has obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Company has obtained the written
consent of the Requisite Holders. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose Transfer Restricted Securities are being tendered
pursuant to the Exchange Offer, and that does not affect directly or indirectly
the rights of other Holders whose Transfer Restricted Securities are not being
tendered pursuant to such Exchange Offer, may be given by the Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
subject to such Exchange Offer.

     (d)  Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchaser, on the other hand, and
shall have the right to enforce such agreements directly to

                                       19

<PAGE>

the extent they may deem such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.

     (e)  Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:

          (i)    if to a Holder, at the address set forth on the records of the
     Registrar under the Indenture, with a copy to the Registrar under the
     Indenture; and

          (ii)   if to the Company or the Guarantors:

                         Danka Business Systems PLC
                         11208 Danka Blvd
                         St. Petersburg, Florida 33716
                         Telecopier No.:  (727) 579-2880

                         Attention:  Chief Financial Officer

                         With a copy to:

                         Skadden, Arps, Slate, Meagher & Flom
                         333 West Wacker Drive, Suite 2100
                         Chicago, Illinois 60606-1285

                         Telecopier No.: (312) 407-0700
                         Attention:  Gary P. Cullen, Esq.

     All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.

     Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

     (f)  Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders; provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms hereof or of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale set
forth in this Agreement and, if applicable, the Purchase Agreement, and such
Person shall be entitled to receive the benefits hereof.

                                       20

<PAGE>

     (g)  Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     (h)  Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (i)  Obligation Currency. Any payment on account of an amount that is
payable in U.S. dollars (the "Required Currency"), which is made to or for the
account of the Initial Purchaser in lawful currency of any other jurisdiction
(the "Judgment Currency"), whether as a result of any obligation, judgment or
order or the enforcement thereof or the liquidation of the Company or any
Guarantor, shall constitute a discharge of the Company's or the Guarantor's
obligation under the this Agreement, as the case may be, only to the extent of
the amount of the Required Currency which the Initial Purchaser could purchase
in the New York foreign exchange markets with the amount of the Judgment
Currency in accordance with normal banking procedures at the rate of exchange
prevailing on the first business day following receipt of the payment in the
Judgment Currency. If the amount of the Required Currency that could be so
purchased is less than the amount of the Required Currency originally due to the
Initial Purchaser, the Company shall indemnify and hold harmless the Initial
Purchaser from and against all loss or damage arising out of, or as a result of,
such deficiency. This indemnity shall constitute an obligation separate and
independent from the other obligations contained in this Agreement, shall give
rise to a separate and independent cause of action, shall apply irrespective of
any indulgence granted by the Initial Purchaser from time to time and shall
continue in full force and effect notwithstanding any judgment or order for a
liquidated sum in respect of an amount due hereunder or under any judgment or
order.

     (j)  Service of Process. The Company and the non-U.S. Guarantors will
irrevocably appoint Danka Office Imaging Company as agent for service of process
in any suit, action or proceeding arising out of this agreement for actions
brought under U.S. federal or state securities laws in any U.S. federal or state
court located in The City of New York and submits to such jurisdiction.

     (k)  Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.

     (l)  Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

     (m)  Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities.

                                       21

<PAGE>

This Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                 DANKA BUSINESS SYSTEMS PLC

                                 By: /s/ P. Lang Lowrey, III
                                    -------------------------------------
                                    Name: P. Lang Lowrey, III
                                    Title: Chief Executive Officer and Chairman

                                       22

<PAGE>

                                        DANKA HOLDING COMPANY
                                        AMERICAN BUSINESS CREDIT CORPORATION
                                        DANKA MANAGEMENT II COMPANY, INC.
                                        HERMAN ENTERPRISES, INC. OF SOUTH
                                        FLORIDA
                                        D.I. INVESTMENT MANAGEMENT, INC.
                                        QUALITY BUSINESS, INC.
                                        DANKA MANAGEMENT COMPANY, INC.
                                        CORPORATE CONSULTING GROUP, INC.
                                        DANKA IMAGING DISTRIBUTION, INC.
                                        DANKA OFFICE IMAGING COMPANY

                                        By: /s/ Keith J. Nelsen
                                           -------------------------------------
                                           Name: Keith J. Nelsen
                                           Title: Vice President

                                       23

<PAGE>

                                        DANKALUX S.A R.L.

                                        By: /s/ Paul Dumond
                                           -------------------------------------
                                           Name: Paul Dumond
                                           Title: Manager

                                       24

<PAGE>

                                        DANKA UK PLC

                                        By: /s/ Matthew Salmon
                                           -------------------------------------
                                           Name: Matthew Salmon
                                           Title: Secretary

                                       25

<PAGE>

                                        DANKA SERVICES INTERNATIONAL LTD.

                                        By: /s/ Paul Dumond
                                           -------------------------------------
                                           Name: Paul Dumond
                                           Title: Secretary

                                       26

<PAGE>

                                        DANKA BUSINESS FINANCE LTD.
                                        DANKA CANADA INC.
                                        KALMARA INC.

                                        By: /s/ Owais Durrani
                                           -------------------------------------
                                           Name: Owais Durrani
                                           Title: Vice President

                                       27

<PAGE>

                                        DANKA AUSTRALASIA PTY LIMITED
                                        DANKA AUSTRALIA PTY LIMITED
                                        DANKA TOWER PTY LTD
                                        DANKA DISTRIBUTORS PTY LTD
                                        DANKA DATAKEY PTY LTD
                                        DATAKEY ALCATEL PTY. LTD.
                                        DANKA SYSTEMS PTY LIMITED

                                        By:                *
                                           -------------------------------------
                                           Name: Michael Andrew Sheeran
                                           Title: Director

                                        *By:  /s/ Keith J. Nelsen
                                            ------------------------------------
                                         Name: Keith J. Nelsen
                                         Pursuant to Power of Attorney

                                       28

<PAGE>

BEAR, STEARNS & CO. INC.

By:  /s/ Richard B. Smith
   ---------------------------------
   Name: Richard B. Smith
   Title:

<PAGE>

                                   Schedule A
                                   ----------

                                       30

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