Document:

EXHIBIT 10.1

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of October 14, 2003,

 

among

 

CB RICHARD ELLIS SERVICES, INC.

 

CBRE HOLDING, INC.

 

THE LENDERS NAMED HEREIN

 

and

 

CREDIT SUISSE FIRST BOSTON,

 

as Administrative Agent

 

 

CREDIT SUISSE FIRST BOSTON,

 

as Sole Lead Arranger and Sole Bookrunner

 

CREDIT LYONNAIS NEW YORK BRANCH,

 

as Syndication Agent

 

SCOTIA CAPITAL,

 

as Documentation Agent

 

 

 

Table of Contents

 

	
  ARTICLE
  I

  
	
   

  	
   

  
	
  Definitions

  
	
   

  	
   

  
	
  SECTION
  1.01.  Defined Terms

  	
   

  
	
  SECTION
  1.02.  Terms Generally

  	
   

  
	
  SECTION
  1.03.  Classification of Loans and
  Borrowings

  	
   

  
	
  SECTION
  1.04.  Pro Forma Calculations

  	
   

  
	
  SECTION
  1.05.  Designation of Obligations

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  II

  
	
   

  	
   

  
	
  The
  Credits

  
	
   

  	
   

  
	
  SECTION
  2.01.  Commitments

  	
   

  
	
  SECTION
  2.02.  Loans

  	
   

  
	
  SECTION
  2.03.  Borrowing Procedure

  	
   

  
	
  SECTION
  2.04.  Evidence of Debt;
  Repayment of Loans

  	
   

  
	
  SECTION
  2.05.  Fees

  	
   

  
	
  SECTION
  2.06.  Interest on Loans

  	
   

  
	
  SECTION
  2.07.  Default Interest

  	
   

  
	
  SECTION
  2.08.  Alternate Rate of Interest

  	
   

  
	
  SECTION
  2.09.  Termination and Reduction of
  Commitments

  	
   

  
	
  SECTION
  2.10.  Conversion and Continuation of
  Borrowings

  	
   

  
	
  SECTION
  2.11.  Repayment of Term Borrowings

  	
   

  
	
  SECTION
  2.12.  Prepayment

  	
   

  
	
  SECTION
  2.13.  Mandatory Prepayments

  	
   

  
	
  SECTION
  2.14.  Reserve Requirements; Change in
  Circumstances

  	
   

  
	
  SECTION
  2.15.  Change in Legality

  	
   

  
	
  SECTION
  2.16.  Indemnity

  	
   

  
	
  SECTION
  2.17.  Pro Rata Treatment

  	
   

  
	
  SECTION
  2.18.  Sharing of Setoffs

  	
   

  
	
  SECTION
  2.19.  Payments

  	
   

  
	
  SECTION
  2.20.  Taxes

  	
   

  
	
  SECTION
  2.21.  Assignment of Commitments Under
  Certain Circumstances; Duty to Mitigate

  	
   

  
	
  SECTION
  2.22.  Swingline Loans

  	
   

  
	
  SECTION
  2.23.  Letters of Credit

  	
   

  
	
  SECTION
  2.24.  Increase in Revolving Credit
  Commitments

  	
   

  
	
  SECTION
  2.25.  Increase in Term Loan
  Commitments

  	
   

  

 

i

 

	
  ARTICLE
  III

  
	
   

  	
   

  
	
  Representations and Warranties

  
	
   

  	
   

  
	
  SECTION
  3.01.  Organization; Powers

  	
   

  
	
  SECTION
  3.02.  Authorization

  	
   

  
	
  SECTION
  3.03.  Enforceability

  	
   

  
	
  SECTION
  3.04.  Governmental Approvals

  	
   

  
	
  SECTION
  3.05.  Financial Statements

  	
   

  
	
  SECTION
  3.06.  No Material Adverse Change

  	
   

  
	
  SECTION
  3.07.  Title to Properties

  	
   

  
	
  SECTION
  3.08.  Subsidiaries; Designated Real
  Estate Credit Support

  	
   

  
	
  SECTION
  3.09.  Litigation; Compliance with
  Laws

  	
   

  
	
  SECTION
  3.10.  Agreements

  	
   

  
	
  SECTION
  3.11.  Federal Reserve Regulations

  	
   

  
	
  SECTION
  3.12.  Investment Company Act; Public
  Utility Holding Company Act

  	
   

  
	
  SECTION
  3.13.  Use of Proceeds

  	
   

  
	
  SECTION
  3.14.  Tax Returns

  	
   

  
	
  SECTION
  3.15.  No Material Misstatements

  	
   

  
	
  SECTION
  3.16.  Employee Benefit Plans

  	
   

  
	
  SECTION
  3.17.  Environmental Matters

  	
   

  
	
  SECTION
  3.18.  Insurance

  	
   

  
	
  SECTION
  3.19.  Labor Matters

  	
   

  
	
  SECTION
  3.20.  Solvency

  	
   

  
	
  SECTION
  3.21.  Senior Indebtedness

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  IV

  
	
   

  	
   

  
	
  Conditions of Lending

  
	
   

  	
   

  
	
  SECTION
  4.01.  All Credit Events

  	
   

  
	
  SECTION
  4.02.  Restatement Date

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  V

  
	
   

  	
   

  
	
  Affirmative Covenants

  
	
   

  	
   

  
	
  SECTION
  5.01.  Existence; Businesses and
  Properties

  	
   

  
	
  SECTION
  5.02.  Insurance

  	
   

  
	
  SECTION
  5.03.  Obligations and Taxes

  	
   

  
	
  SECTION
  5.04.  Financial Statements, Reports,
  etc

  	
   

  
	
  SECTION
  5.05.  Litigation and Other Notices

  	
   

  
	
  SECTION
  5.06.  Information Regarding
  Collateral

  	
   

  
	
  SECTION
  5.07.  Maintaining Records; Access to
  Properties and Inspections

  	
   

  
	
  SECTION
  5.08.  Use of Proceeds

  	
   

  
	
  SECTION
  5.09.  Further Assurances

  	
   

  

 

ii

 

	
  ARTICLE
  VI

  
	
   

  	
   

  
	
  Negative Covenants

  
	
   

  	
   

  
	
  SECTION
  6.01.  Indebtedness

  	
   

  
	
  SECTION
  6.02.  Liens

  	
   

  
	
  SECTION
  6.03.  Sale and Lease-Back
  Transactions

  	
   

  
	
  SECTION
  6.04.  Investments, Loans and Advances

  	
   

  
	
  SECTION
  6.05.  Mergers, Consolidations, Sales
  of Assets and Acquisitions

  	
   

  
	
  SECTION
  6.06.  Restricted Payments;
  Restrictive Agreements

  	
   

  
	
  SECTION
  6.07.  Transactions with Affiliates

  	
   

  
	
  SECTION
  6.08.  Business of Holdings, Borrower
  and Subsidiaries

  	
   

  
	
  SECTION
  6.09.  Other Indebtedness and
  Agreements

  	
   

  
	
  SECTION
  6.10.  Capital Expenditures

  	
   

  
	
  SECTION
  6.11.  Interest Coverage Ratio

  	
   

  
	
  SECTION
  6.12.  Fixed Charge Coverage Ratio

  	
   

  
	
  SECTION
  6.13.  Maximum Leverage Ratio

  	
   

  
	
  SECTION
  6.14.  Maximum Senior Secured Leverage
  Ratio

  	
   

  
	
  SECTION
  6.15.  Fiscal Year

  	
   

  
	
  SECTION
  6.16.  Management Fees

  	
   

  
	
  SECTION
  6.17.  Indebtedness of Co-investment
  Subsidiaries

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  VII

  
	
   

  	
   

  
	
  Events
  of Default

  
	
   

  
	
   

  	
   

  
	
  ARTICLE
  VIII

  
	
   

  	
   

  
	
  The
  Administrative Agent and the Collateral Agent

  
	
   

  
	
   

  	
   

  
	
  ARTICLE
  IX

  
	
   

  	
   

  
	
  Miscellaneous

  
	
   

  	
   

  
	
  SECTION
  9.01.  Notices

  	
   

  
	
  SECTION
  9.02.  Survival of Agreement

  	
   

  
	
  SECTION
  9.03.  Binding Effect

  	
   

  
	
  SECTION
  9.04.  Successors and Assigns

  	
   

  
	
  SECTION
  9.05.  Expenses; Indemnity

  	
   

  
	
  SECTION
  9.06.  Right of Setoff

  	
   

  
	
  SECTION
  9.07.  Applicable Law

  	
   

  
	
  SECTION
  9.08.  Waivers; Amendment

  	
   

  

 

iii

 

	
  SECTION
  9.09.  Interest Rate Limitation

  	
   

  
	
  SECTION
  9.10.  Entire Agreement

  	
   

  
	
  SECTION
  9.11.  WAIVER OF JURY TRIAL

  	
   

  
	
  SECTION
  9.12.  Severability

  	
   

  
	
  SECTION
  9.13.  Counterparts

  	
   

  
	
  SECTION
  9.14.  Headings

  	
   

  
	
  SECTION
  9.15.  Jurisdiction; Consent to
  Service of Process

  	
   

  
	
  SECTION
  9.16.  Confidentiality

  	
   

  
	
  SECTION
  9.17.  Effect of Restatement

  	
   

  

 

iv

 

	
  Exhibits

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of
  Administrative Questionnaire

  
	
  Exhibit B

  	
  Form of
  Assignment and Acceptance

  
	
  Exhibit C

  	
  Form of
  Borrowing Request

  
	
  Exhibit D

  	
  Collateral
  Agreement

  
	
  Exhibit E-1

  	
  Form of
  Opinion of Assistant General Counsel of Borrower

  
	
  Exhibit E-2

  	
  Form of
  Opinion of Simpson Thacher & Bartlett LLP

  

 

 

	
  Schedules

  	
   

  
	
   

  	
   

  
	
  Schedule
  1.01(a)

  	
  Subsidiary
  Guarantors

  
	
  Schedule
  1.01(b)

  	
  Co-investment
  Subsidiaries

  
	
  Schedule
  1.01(c)

  	
  Inactive
  Subsidiaries

  
	
  Schedule
  1.01(d)

  	
  Insignia
  Merger Cost Savings

  
	
  Schedule
  1.01(e)

  	
  Designated
  Real Estate Asset Subsidiaries and Designated Real Estate Assets

  
	
  Schedule
  2.01

  	
  Lenders

  
	
  Schedule
  3.08(a)

  	
  Subsidiaries

  
	
  Schedule
  3.08(b)

  	
  Designated
  Real Estate Credit Support

  
	
  Schedule
  3.09

  	
  Litigation;
  Compliance with Laws

  
	
  Schedule
  3.18

  	
  Insurance

  
	
  Schedule
  6.01(a)

  	
  Indebtedness

  
	
  Schedule
  6.02(a)

  	
  Liens

  
	
  Schedule
  6.04(a)

  	
  Existing
  Investments, Loans and Advances to Foreign Subsidiaries

  
	
  Schedule
  6.04(k)

  	
  Existing
  Investments

  
	
  Schedule
  6.06(b)

  	
  Certain
  Existing Restrictions

  

 

v

 

AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 14,
2003, among CB RICHARD ELLIS SERVICES, INC., a Delaware corporation (the “Borrower”),
CBRE HOLDING, INC., a Delaware corporation (“Holdings”), the Lenders (as
defined in Article I), and CREDIT SUISSE FIRST BOSTON, a bank organized
under the laws of Switzerland, acting through its Cayman Islands branch, as
administrative agent (in such capacity, the “Administrative Agent”) and
as collateral agent (in such capacity, the “Collateral Agent”) for the Lenders.

 

The Borrower,
Holdings, the Administrative Agent and certain lenders party thereto (the “Existing
Lenders”) previously entered into that certain Credit Agreement
dated as of July 20, 2001, as amended and restated as of May 22, 2003 (the
“Existing
Credit Agreement”), under which (a) the Existing Lenders
extended credit or agreed to extend credit in the form of
(i) Tranche A Term Loans, Tranche B Term Loans and Additional
Tranche B Term Loans (as each such term is defined in the Existing Credit
Agreement, the “Existing Term Loans”), and (ii) Revolving Loans at any
time and from time to time prior to the Revolving Credit Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of
$90,000,000, (b) the Swingline Lender agreed to extend credit, at any time
and from time to time prior to the Revolving Credit Maturity Date, in the form
of Swingline Loans, in an aggregate principal amount at any time outstanding
not in excess of $10,000,000 and (c) the Issuing Bank agreed to issue
Letters of Credit, in an aggregate face amount at any time outstanding not in
excess of $30,000,000, to support payment obligations incurred in the ordinary
course of business by the Borrower and its Subsidiaries.

 

The Borrower
and Holdings have requested that the Term Lenders make Term Loans to the
Borrower in an aggregate principal amount not in excess of $300,000,000,
subject to the terms and conditions set forth herein, the proceeds of which
will be used by the Borrower solely (a) to prepay the Existing Term Loans,
(b) to redeem, repurchase or otherwise retire a portion of the Holdco
Notes and (c) to pay fees and expenses incurred in connection with the
Amendment Transactions.

 

The Term
Lenders are willing to make the Term Loans to the Borrower for the purposes set
forth above and subject to the terms and conditions set forth herein.

 

The Borrower,
Holdings, the Required Lenders (as defined in the Existing Credit Agreement)
and the Term Lenders desire to amend and restate the Existing Credit Agreement
in the form hereof to, among other things, set forth the terms and conditions
under which the Lenders will make the Term Loans to the Borrower and to make
certain other amendments thereto.

 

The amendment
and restatement of the Existing Credit Agreement evidenced by this Agreement
shall become effective as provided in the Amendment Agreement; provided,
however,
that if the Restatement Date does not occur on or before October 31, 2003,
then this Agreement shall be of no force or effect and the Existing Credit
Agreement shall continue in full force and effect.

 

 

Accordingly,
the parties hereto agree as follows:

 

ARTICLE
I

 

Definitions

 

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

 

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

 

“Additional
L/C Facility” shall mean each letter of credit facility provided to
the Borrower by one or more financial institutions, whether or not each such
financial institution is a Lender, pursuant to which (a) standby letters
of credit are issued or outstanding for the account of the Borrower or any
Subsidiary to support payment obligations incurred in the ordinary course of
business, and (b) any extensions, renewals or replacements of such letters
of credit to the extent the aggregate principal amount of such facility is not
increased.

 

“Adjusted
LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum equal to the product of
(a) the LIBO Rate in effect for such Interest Period and
(b) Statutory Reserves.

 

“Administrative
Agent Fees” shall have the meaning assigned to such term in
Section 2.05(b).

 

“Administrative
Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit A, or such other form as may be supplied from time to time
by the Administrative Agent.

 

“Affiliate”
shall mean, when used with respect to a specified person, another person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the person specified; provided,
however, that, for purposes of Section 6.07, the term
“Affiliate” shall also include any person that directly or indirectly owns 10%
or more of any class of Equity Interests of the person specified or that is an
officer or director of the person specified.

 

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

 

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

 

“Amendment
Agreement” shall mean the Amendment Agreement dated as of
October 14, 2003, among other things, effecting the amendment and
restatement of the Existing Credit Agreement.

 

2

 

“Amendment Transactions”
shall mean, collectively, the transactions to occur on or prior to the
Restatement Date, including (a) the execution and delivery of the
Amendment Agreement and the borrowing of the Term Loans hereunder, (b) the
prepayment of the Existing Term Loans and (c) the payment of all fees and
expenses to be paid on or prior to the Restatement Date and owing in connection
with the foregoing.

 

“Applicable
Percentage” shall mean, for any day, subject to Section 2.07,
(a) with respect to any Eurodollar Term Loan, 3.25%, (b) with respect
to any ABR Term Loan, 2.25%, and (c) with respect to any Revolving Loan,
the applicable percentage set forth below under the caption “Eurodollar
Spread—Revolving Loans” or “ABR Spread—Revolving Loans”, as the case may be,
based upon the Leverage Ratio as of the relevant date of determination:

 

	
  Leverage Ratio

  	
   

  	
  Eurodollar
  Spread—

  Revolving Loans

  	
   

  	
  ABR
  Spread—

  Revolving Loans

  	
   

  
	
  Category 1

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than 2.5 to 1.0

  	
   

  	
  3.75

  	
  %

  	
  2.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 2

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than 2.0 to 1.0 but less than or
  equal to 2.5 to 1.0

  	
   

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 3

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than 1.5 to 1.0 but less than or
  equal to 2.0 to 1.0

  	
   

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 4

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equal to or less than 1.5 to 1.0

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  

 

Each change in
the Applicable Percentage resulting from a change in the Leverage Ratio shall
be effective with respect to all Revolving Loans and Letters of Credit
outstanding on and after the date of delivery to the Administrative Agent of
the financial statements and certificates required by Section 5.04(a) or
(b) and Section 5.04(c), respectively, indicating such change until the
date immediately preceding the next date of delivery of such financial
statements and certificates indicating another such change. Notwithstanding the
foregoing, (a) at any time during which the Borrower has failed to deliver
the financial statements and certificates required by Section 5.04(a) or
(b) and Section 5.04(c), respectively, or (b) at any time after the
occurrence and during the continuance of an Event of Default, the Leverage
Ratio shall be deemed to be in Category 1 for purposes of determining the
Applicable Percentage.

 

“Asset Sale”
shall mean the sale, transfer or other disposition (by way of merger, casualty,
condemnation or otherwise) by the Borrower or any of the Subsidiaries to any
person other than the Borrower or any Subsidiary Guarantor of any assets of the
Borrower or any of the Subsidiaries (other than (i) inventory, damaged,
obsolete or worn out assets and Permitted

 

3

 

Investments, in each case
disposed of in the ordinary course of business, (ii) dispositions between
or among Foreign Subsidiaries, (iii) the sale by Melody of assets
purchased and/or funded pursuant to the Melody Mortgage Warehousing Facility or
the Melody Loan Arbitrage Facility, (iv) the sale by Melody of servicing
rights in respect of mortgage portfolios in the ordinary course of its business
and consistent with past practice) and (v) Designated Real Estate Assets
or all or any portion of the Equity Interests of any Designated Real Estate
Asset Subsidiary); provided that any asset sale or series of
related asset sales having a value (net of related assumed liabilities) not in
excess of $750,000 shall be deemed not to be an “Asset Sale” for purposes of
this Agreement.

 

“Assignment
and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee, and accepted by the Administrative Agent, in the
form of Exhibit B or such other form as shall be approved by the
Administrative Agent.

 

“Available
Cash” shall mean, on any date, the amount of cash and Permitted
Investments held by the Borrower and the Domestic Subsidiaries on such date,
less the amount thereof that is (a) reflected as “Cash Surrender Value for
Insurance Policy for Deferred Compensation Plan” and “Prepaid Pension Costs” on
the most recent balance sheet of the Borrower delivered pursuant to this
Agreement or (b) subject to restrictions, directly or indirectly, on its
use.

 

“Blum Funds”
shall mean (i) Blum Strategic Partners, L.P. (as successor to RCBA
Strategic Partners, L.P.) and its successors, (ii) Blum Capital Partners,
L.P. and its successors and (iii) any investment fund which is an
Affiliate of Blum Capital Partners, L.P. or its successors.

 

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

 

“Borrowing”
shall mean (a) Loans of the same Class and Type made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, or (b) a Swingline Loan.

 

“Borrowing
Request” shall mean a request by the Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit C, or
such other form as shall be approved by the Administrative Agent.

 

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

 

“Calpers
Co-investment” shall mean a Co-investment by Global Innovation
Contributors, LLC (which shall be a Co-investment Subsidiary) in Global
Innovation Partners, LLC (which shall be a Co-investment Vehicle), pursuant to
the terms of such Co-investment contained in the organizational documents of
Global Innovation Contributors, LLC and Global Innovation Partners, LLC as of
the Closing Date.

 

“Capital
Expenditures” shall mean, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Borrower
and its consolidated Subsidiaries that are set forth as such in a consolidated
statement of cash flows of the Borrower for such period prepared in accordance
with GAAP and (b) Capital Lease Obligations incurred by the Borrower and
its consolidated Subsidiaries during such period, but excluding in each case
(i) any such expenditure made to restore, replace or rebuild property to
the condition of such property

 

4

 

immediately prior to any
damage, loss, destruction or condemnation of such property, to the extent such
expenditure is made with insurance proceeds, condemnation awards, damage
recovery proceeds or other indemnity payments relating to any such damage,
loss, destruction or condemnation within 270 days of receipt of such
proceeds, (ii) any such expenditure made at the request of, and for which
the Borrower or any consolidated Subsidiary receives reimbursement in cash
from, a person other than the Borrower or any Subsidiary in the ordinary course
of business, and (iii) expenditures which represent any part of the
aggregate consideration made in connection with any investment or Permitted
Acquisition permitted under Section 6.04. 
For purposes of determining the Fixed Charge Coverage Ratio for the
periods ended on September 30, 2003, December 31, 2003, and
March 31, 2004, Capital Expenditures will be deemed to be equal to
(i) for the fiscal quarter ended December 31, 2002, $9,041,000,
(ii) for the fiscal quarter ended March 31, 2003, $5,486,000 and
(iii) for the fiscal quarter ended June 30, 2003, $616,000.

 

“Capital
Lease Obligations” of any person shall mean the obligations of such
person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.

 

“Cash Equity
Contribution” shall mean (a) the contribution by one or more
Permitted Investors or investors designated by the Blum Funds to Holdings of an
aggregate amount of $120,000,000 in cash in the form of equity on the First
Restatement Date and (b) the contribution by Holdings on the First
Restatement Date of an aggregate amount of $100,000,000 in cash to the Borrower
as common equity.

 

“Change in
Control” shall mean (a) the failure by the Blum Funds to own,
directly or indirectly, beneficially and of record, Equity Interests in
Holdings representing at least 75% of the Equity Interests in Holdings owned by
the Blum Funds on the Closing Date; (b) any person or “group” (within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934
as in effect on the Closing Date) other than a group controlled by the Blum
Funds shall own, beneficially or of record, Equity Interests of Holdings that
represents a greater percentage of the Equity Interests of Holdings then owned
by the Blum Funds; (c) the Blum Funds shall cease to have the right or
ability, by voting power, contract or otherwise, to elect or designate for
election a majority of the seats on the board of directors of Holdings;
(d) occupation of a majority of the seats (other than vacant seats) on the
board of directors of Holdings by persons who were neither (i) nominated
by the board of directors of Holdings or any Permitted Investor nor
(ii) appointed by the directors so nominated; (e) Holdings shall
cease to directly own 100% of the issued and outstanding Equity Interests of
the Borrower or (f) the occurrence of a “Change of Control” under and as
defined in the Holdco Note Documents, the Senior Subordinated Note Documents or
the Senior Unsecured Note Documents. 
For purposes hereof, (i) the Blum Funds shall not be deemed to
beneficially own any Equity Interests owned of record by any other person for
purposes of clause (a) and (ii) any person other than the Blum Funds
that is member of a group that includes the Blum Funds shall not be deemed to
beneficially own any Equity Interests owned of record by the Blum Funds as a
result of such ownership by the Blum Funds.

 

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

 

5

 

such Lender’s or Issuing Bank’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the Closing Date.

 

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

 

“Closing Date”
shall mean July 20, 2001.

 

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

 

“Co-investment”
shall mean any investment by a Co-investment Subsidiary in up to 30% of the
outstanding Equity Interests and/or outstanding Indebtedness of a Co-investment
Vehicle, in each case, pursuant to arrangements substantially similar to
arrangements entered into by the Borrower and the Subsidiaries prior to the
First Restatement Date.

 

“Co-investment Subsidiary”
shall mean (a) any Subsidiary of the Borrower that is formed solely for
the purpose of, and engages in no business other than the business of,
investing in or managing Co-investment Vehicles, whether directly or indirectly
through one or more other Co-investment Subsidiaries, and (b) the
Co-investment Subsidiaries existing on the Restatement Date and listed on
Schedule 1.01(b).

 

“Co-investment
Vehicle” shall mean an entity formed for the purpose of investing
principally in commercial real estate and managed by a Co-investment Subsidiary
pursuant to arrangements substantially similar to arrangements entered into by
the Borrower and the Subsidiaries prior to the First Restatement Date.

 

“Collateral”
shall mean all the “Collateral” as defined in any Security Document.

 

“Collateral
Agreement” shall mean the Guarantee and Collateral Agreement, dated
as of July 20, 2001, among the Borrower, Holdings, the Subsidiary
Guarantors and the Collateral Agent for the benefit of the Secured Parties, a
copy of which is attached as Exhibit D.

 

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

 

“Commitment
Fee” shall have the meaning assigned to such term in
Section 2.05(a).

 

“Confidential
Information Memorandum” shall mean the Confidential Information
Memorandum of the Borrower dated September 2003.

 

“Consolidated
EBITDA” shall mean, for any period, Consolidated Net Income for such
period plus (a) without duplication and to the extent deducted in determining
such Consolidated Net Income, the sum of (i) Consolidated Interest Expense
for such period (including deferred financing costs), (ii) consolidated
income tax expense for such period, (iii) all amounts attributable to
depreciation and amortization for such period, (iv) any non-recurring
fees, expenses or charges in connection with the consummation of the Merger
Transactions or the Amendment Transactions, (v) any non-recurring fees,
expenses or charges related to any Equity

 

6

 

Issuance, investment permitted
under Section 6.04, Permitted Acquisition or incurrence of Indebtedness,
in an amount not exceeding $5,000,000 for all such non-recurring fees, expenses
and charges, (vi) any cost savings implemented within twelve months of the
First Restatement Date associated with the Insignia Merger and contained in
Schedule 1.01(d), and (vii) all other non-cash losses, expenses and
charges of the Borrower and its consolidated Subsidiaries (excluding (x) the
write-down of current assets and (y) any such non-cash charge to the
extent that it represents an accrual of or reserve for cash expenditures in any
future period) and minus (b) without duplication (i) all cash
payments made during such period on account of reserves, restructuring charges
and other noncash charges added to Consolidated Net Income pursuant to
clause (a)(vi) above in a previous period and (ii) to the extent
included in determining such Consolidated Net Income, any extraordinary gains
for such period, all determined on a consolidated basis in accordance with
GAAP.  For purposes of determining the
Fixed Charge Coverage Ratio, the Interest Coverage Ratio, the Leverage Ratio
and the Senior Secured Leverage Ratio as of or for the periods ended on
September 30, 2003, December 31, 2003, and March 31, 2004,
Consolidated EBITDA will be deemed to be equal to (i) for the fiscal
quarter ended December 31, 2002, $79,592,000, (ii) for the fiscal
quarter ended March 31, 2003, $14,236,000, and (iii) for the fiscal
quarter ended June 30, 2003, $45,837,000.

 

“Consolidated
Interest Expense” shall mean, for any period, (a) the sum of
(i) the interest expense (including imputed interest expense in respect of
Capital Lease Obligations but excluding all non-cash interest expense) of the
Borrower and the Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP, plus (ii) any interest accrued during such
period in respect of Indebtedness of the Borrower or any Subsidiary that is
required to be capitalized rather than included in consolidated interest
expense for such period in accordance with GAAP, minus (b) to the extent
otherwise included in Consolidated Interest Expense, (i) deferred
financing costs, (ii) interest expense associated with any Non-Recourse
Indebtedness and (iii) interest expense on the Existing Term Loans.  For purposes of the foregoing, interest
expense shall be determined after giving effect to any net payments made or
received by the Borrower or any Subsidiary with respect to interest rate
Hedging Agreements.  For purposes of
determining the Interest Coverage Ratio and the Fixed Charge Coverage Ratio for
the period of four consecutive quarters ending on September 30, 2003,
December 31, 2003, March 31, 2004, June 30, 2004 and September 30,
2004, Consolidated Interest Expense shall be deemed to be (a) for
Consolidated Interest Expense in respect of the Senior Unsecured Notes and the
Term Loans, (i) the Consolidated Interest Expense for the two consecutive
fiscal quarters ended September 30, 2003 (as if such Indebtedness were
incurred on April 1, 2003), multiplied by 2, (ii) the Consolidated
Interest Expense for the three consecutive fiscal quarters ended
December 31, 2003 (as if such Indebtedness were incurred on April 1,
2003), multiplied by 4/3, (iii) the Consolidated Interest Expense for the
four consecutive fiscal quarters ending on March 31, 2004 (as if such
Indebtedness were incurred on April 1, 2003), (iv) the Consolidated
Interest Expense for the four consecutive fiscal quarters ending on
June 30, 2004 (as if such Indebtedness were incurred on July 1,
2004), and (v) the Consolidated Interest Expense for the four consecutive
fiscal quarters ending on September 30, 2004 (as if such Indebtedness were
incurred on October 1, 2004), respectively, plus, for each such period,
and (b) for Consolidated Interest Expense in respect of all other
Indebtedness, the actual Consolidated Interest Expense for such borrowings for
such period.

 

“Consolidated
Net Income” shall mean, for any period, the net income or loss of
the Borrower and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded
(a) the income of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by the Subsidiary of that

 

7

 

income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, statute, rule or governmental regulation
applicable to such Subsidiary, (b) except as set forth in
Section 1.04, the income or loss of any person accrued prior to the date
it becomes a Subsidiary or is merged into or consolidated with the Borrower or
any Subsidiary or the date that such person’s assets are acquired by the
Borrower or any Subsidiary, (c) the income of any person in which any
other person (other than the Borrower or a Subsidiary of which at least 80% of
the Equity Interests is owned by the Borrower or a wholly owned Subsidiary or
any director holding qualifying shares in accordance with applicable law) has a
joint interest, except to the extent of the amount of dividends or other
distributions actually received by the Borrower or a wholly owned Subsidiary
from such person during such period, and (d) any gains attributable to
sales of assets out of the ordinary course of business; provided further, that
Consolidated Net Income for any period shall be increased by cash received
during such period by the Borrower or any of its consolidated Subsidiaries in
respect of commissions receivable (net of related commissions payable to
brokers) on leasing transactions that were completed by any acquired business
prior to the acquisition of such business and which purchase accounting rules
under GAAP would require to be recognized as an intangible asset purchased.

 

“Control”
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a person, whether through
the ownership of voting securities, by contract or otherwise, and the terms “Controlling”
and “Controlled”
shall have meanings correlative thereto.

 

“Credit Event”
shall have the meaning assigned to such term in Section 4.01.

 

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

 

“Deferred
Compensation Plan” shall mean the Deferred Compensation Plan for
employees of the Borrower and the Subsidiaries and any successor plan thereto
and the 401(k) Restoration Plan of Insignia and any successor plan thereto.

 

“Designated
Real Estate Asset Guarantee” shall mean any Guarantee by Holdings,
the Borrower or any of its Subsidiaries of any of the following obligations of,
or relating to, the Designated Real Estate Asset Subsidiaries and the
Designated Real Estate Assets: 
(a) the repayment of a fixed amount of indebtedness or
(b) liabilities associated with recourse exceptions to non-recourse
indebtedness.

 

“Designated
Real Estate Asset Subsidiaries” shall mean those persons specified
in Schedule 1.01(e).

 

“Designated
Real Estate Assets” shall mean those real estate assets specified in
Schedule 1.01(e).

 

“Designated
Real Estate Credit Support” shall mean, with respect to any
Designated Real Estate Assets, (a) any Designated Real Estate Asset
Guarantee or (b) any letter of credit for which Holdings, the Borrower or
any of its Subsidiaries is the account party or otherwise liable that supports
the indebtedness or other obligations or liabilities of such Designated Real
Estate Assets or the Designated Real Estate Asset Subsidiaries that are the
direct or indirect owners of such Designated Real Estate Assets.

 

“dollars”
or “$”
shall mean lawful money of the United States of America.

 

8

 

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

 

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

 

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

 

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

 

“Equity
Issuance” shall mean any issuance or sale by Holdings, the Borrower
or any of their respective subsidiaries of any Equity Interests or any
obligations convertible into or exchangeable for, or giving any person a right,
option or warrant to acquire such Equity Interests or such convertible or
exchangeable obligations, as applicable, except in each case for (a) any
issuance or sale to any Permitted Investor (other than any such person acting
in the capacity of an underwriter or placement agent with regard to such Equity
Issuance), Holdings, the Borrower or any Subsidiary, (b) any issuance of
directors’ qualifying shares and (c) sales or issuances of common stock of
Holdings or stock fund units in the Deferred Compensation Plan to management,
employees or consultants of Holdings, the Borrower or any Subsidiary under the
Deferred Compensation Plan or any employee stock option or stock purchase plan
or employee benefit plan in existence from time to time.

 

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

 

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

 

“ERISA Event”
shall mean (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of

 

9

 

ERISA with respect to the
termination of any Plan (other than a standard termination pursuant to
Section 4041(b) of ERISA) or the withdrawal or partial withdrawal of the
Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan;
(e) the receipt by the Borrower or any of its ERISA Affiliates from the
PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(f) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (g) the receipt by the Borrower or any of its
ERISA Affiliates of any intent to withdraw from a Multiemployer Plan, or the
receipt by any Multiemployer Plan from the Borrower or any of its ERISA
Affiliates of any notice, concerning the imposition of Withdrawal Liability or
a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA;
(h) the occurrence of a “prohibited transaction” with respect to which the
Borrower or any of the Subsidiaries is a “disqualified person” (within the
meaning of Section 4975 of the Code) or with respect to which the Borrower or
any such Subsidiary could otherwise be liable; (i) any other event or
condition with respect to a Plan or Multiemployer Plan that could result in
liability of the Borrower or any Subsidiary; or (j) any Foreign Benefit
Event.

 

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

 

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

 

“Excess Cash
Flow” shall mean, for any period, the excess of Consolidated EBITDA
for such period minus the sum, without duplication, of (i) the amount
of any Taxes paid in cash by the Borrower and the Subsidiaries with respect to
such period, (ii) Consolidated Interest Expense for such period paid in
cash, (iii) Capital Expenditures made in cash in accordance with
Section 6.10 during such period, except to the extent financed with the
proceeds of Indebtedness, equity issuances, casualty proceeds, condemnation
proceeds or other proceeds that would not be included in Consolidated EBITDA,
(iv) permanent repayments of Indebtedness (other than mandatory
prepayments of Loans under Section 2.13) made by the Borrower and the
subsidiaries during such period, but only to the extent that such prepayments
by their terms cannot be reborrowed or redrawn and do not occur in connection
with a refinancing of all or any portion of such Indebtedness, (v) the
amount of net investments made in cash in accordance with Section 6.04(g)
or (i) during such period, (vi) the amount of Restricted Payments
made in cash by the Borrower in accordance with
Section 6.06(a) (other than Section 6.06(a)(viii)) during such
period, and (vii) any non-recurring fees, expenses or charges in
connection with the consummation of the Merger Transactions or the Amendment
Transactions to the extent included in Consolidated EBITDA with respect to such
period pursuant to clause (iv) of the definition of Consolidated EBITDA.

 

“Excluded
Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by (i) any
Governmental Authority of the United States of America (or any political
subdivision or taxing authority thereof or therein), or the jurisdiction under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending
office is located, or (ii) as a result of a present or former connection
between the Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax (or any political subdivision or taxing authority

 

10

 

thereof or therein) other than
a connection arising solely as a result of entering into any Loan Document;
(b) any branch profits taxes imposed by any Governmental Authority of the
United States of America (or any political subdivision or taxing authority
thereof or therein) or any similar tax imposed by any other jurisdiction
described in clause (a) above, and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.21(a)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender’s failure to comply with Section 2.20(f), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.20(a).

 

“Existing
Term Loans” shall have the meaning assigned to such term in the
preamble to this Agreement.

 

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

 

“Fees”
shall mean the Commitment Fees, the Administrative Agent Fees, the L/C
Participation Fees and the Issuing Bank Fees.

 

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

 

“First Restatement Date”
shall mean July 23, 2003.

 

“Fixed Charge
Coverage Ratio” shall mean, for any period, the ratio of
(a) Consolidated EBITDA for such period minus Capital Expenditures and
Co-investments for such period to (b) the sum of Consolidated Interest
Expense plus Restricted Payments made under Section 6.06(a)(ii) by the
Borrower for such period.

 

“Foreign
Benefit Event” shall mean, with respect to any Foreign Pension
Plan, (a) the existence of unfunded liabilities in excess of the amount
permitted under any applicable law, or in excess of the amount that would be
permitted absent a waiver from a Governmental Authority, (b) the failure
to make the required contributions or payments, under any applicable law, on or
before the due date for such contributions or payments, (c) the receipt of
a notice by a Governmental Authority relating to the intention to terminate any
such Foreign Pension Plan or to appoint a trustee or similar official to
administer any such Foreign Pension Plan, or alleging the insolvency of any
such Foreign Pension Plan and (d) the incurrence of any liability in
excess of $5,000,000 (or the equivalent thereof in another currency) by
Holdings, the Borrower or any of its Subsidiaries under applicable law on
account of the complete or partial termination of such Foreign Pension Plan or
the complete or partial withdrawal of any participating employer therein, or
(e) the occurrence of any transaction that is prohibited under any
applicable law and could reasonably be expected to result in the incurrence of
any liability by Holdings, the Borrower or any of its Subsidiaries, or the
imposition on Holdings, the Borrower or any of its Subsidiaries of

 

11

 

any fine, excise tax or penalty
resulting from any noncompliance with any applicable law, in each case in
excess of $5,000,000 (or the equivalent thereof in another currency).

 

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

 

“Foreign
Pension Plan” shall mean any plan, fund (including any
superannuation fund) or other similar program established or maintained outside
the United States by Holdings, the Borrower or any one or more of its
Subsidiaries primarily for the benefit of employees of Holdings, the Borrower
or such Subsidiaries residing outside the United States, which plan, fund or
other similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement or payments to be made upon termination
of employment, and which plan is not subject to ERISA or the Code.

 

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

 

“GAAP”
shall mean United States generally accepted accounting principles applied on a
consistent basis.

 

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

 

“Granting Lender”
shall have the meaning assigned to such term in Section 9.04(i).

 

“Guarantee”
of or by any person shall mean any obligation, contingent or otherwise, of such
person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other person (the “primary obligor”) in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Indebtedness or other obligation, (b) to purchase
or lease property, securities or services for the purpose of assuring the owner
of such Indebtedness or other obligation of the payment of such Indebtedness or
other obligation or (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness or other obligation; provided,
however,
that the term “Guarantee” shall not include endorsements for collection or
deposit in the ordinary course of business.

 

“Guarantors”
shall mean Holdings and the Subsidiary Guarantors.

 

“Hazardous
Materials” shall mean (a) any petroleum products or byproducts
and all other hydrocarbons, coal ash, radon gas, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other
ozone-depleting substances and (b) any chemical, material, substance or
waste that is prohibited, limited or regulated by or pursuant to any
Environmental Law.

 

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

 

12

 

“Holdco Note
Documents” shall mean the Holdco Notes, the indenture under which
the Holdco Notes are issued and all other material instruments, agreements and
other documents evidencing or governing the Holdco Notes or providing for any
right in respect thereof.

 

“Holdco Notes”
shall mean Holdings’ 16% Senior Unsecured Notes due 2011, in an initial
aggregate principal amount of $65,000,000.

 

“Inactive
Subsidiary” shall mean (a) each Domestic Subsidiary that
(i) has not conducted any business during the 12-month period preceding
the date of determination, (ii) has no outstanding Indebtedness and,
(iii) has total tangible assets of less than $50,000, (b) each
Foreign Subsidiary that has total tangible assets of less than $250,000 and
(c) each Subsidiary listed on Schedule 1.01(c), so long as after the
Restatement Date such Subsidiary (i) engages in no business,
(ii) incurs no Indebtedness and (iii) acquires no tangible assets.

 

“Incremental
Revolving Facility Amount” shall mean, at any time the excess, if
any, of (a) $25,000,000 over (b) the sum of (i) the aggregate
amount of all Incremental Term Loan Commitments established at or prior to such
time pursuant to Section 2.25 and (ii) the aggregate increase in the
Revolving Credit Commitments established prior to such time pursuant to
Section 2.24.

 

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

 

“Incremental
Term Loan Amount” shall mean, at any time, the excess, if any, of
(a) $25,000,000 over (b) the sum of (i) the aggregate increase
in the Revolving Credit Commitments established at or prior to such time
pursuant to Section 2.24 and (ii) the aggregate amount of all
Incremental Term Loan Commitments established prior to such time pursuant to
Section 2.25.

 

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

 

“Incremental
Term Loan Commitment” shall mean the commitment of any Lender,
established pursuant to Section 2.25, to make Incremental Term Loans to
the Borrower.

 

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

 

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

 

“Incremental
Term Loans” shall mean Term Loans made by one or more Lenders to the
Borrower pursuant to clause (c) of Section 2.01.  Incremental Term Loans may be made in the
form of additional Term Loans or, to the extent permitted by Section 2.25
and provided for in the relevant Incremental Term Loan Assumption Agreement,
Other Term Loans.

 

13

 

“Indebtedness”
of any person shall mean, without duplication, (a) all obligations of such
person for borrowed money or with respect to deposits or advances of any kind,
(b) all obligations of such person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such person upon which
interest charges are customarily paid, (d) all obligations of such person
under conditional sale or other title retention agreements relating to property
or assets purchased by such person, (e) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding (i) with respect to clause (e), trade accounts payable and
accrued obligations incurred in the ordinary course of business and
(ii) only with respect to clauses (a) through (e), accrued
obligations in respect of the Deferred Compensation Plan), (f) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such person, whether or not the obligations secured
thereby have been assumed, (g) all Guarantees by such person of
Indebtedness of others (other than Guarantees by a Co-Investment Subsidiary of
any Indebtedness of any Co-Investment Vehicle; provided that neither such
Guarantee nor the related Indebtedness is recourse to Holdings, the Borrower or
any other Subsidiary (other than a Co-Investment Subsidiary)), (h) all
Capital Lease Obligations of such person, (i) all obligations of such
person as an account party in respect of letters of credit and (j) all
obligations of such person in respect of bankers’ acceptances.  The Indebtedness of any person shall include
all Indebtedness of any partnership, or other entity in which such person is a
general partner, or other equity holder with unlimited liability other than
(x) Indebtedness which by its terms is expressly non-recourse to such
person and (y) if such person is a Co-Investment Subsidiary, the
Indebtedness of the related Co-Investment Vehicle.  Notwithstanding the foregoing, (A) in connection with the
purchase of any business, Indebtedness shall not include post-closing payment
adjustments to which the seller may become entitled so long as (i) such
payment is to be determined by a final closing balance sheet or depends on the
performance of such business after the closing of the purchase, (ii) at the
time of closing, the amount of any such payment is not determinable and
(iii) to the extent such payment thereafter becomes fixed and determined,
the amount is paid within 60 days thereafter, and (B) no Designated
Real Estate Asset Guarantee of an obligation in clause (b) of the
definition of the term “Designated Real Estate Asset Guarantee” shall be
considered Indebtedness of Holdings, the Borrower or a Subsidiary unless and to
the extent the beneficiary with respect to such guarantee shall seek to enforce
such guarantee.

 

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

 

“Insignia”
shall mean Insignia Financial Group, Inc., a Delaware corporation.

 

“Insignia
Merger” shall mean the merger of Apple Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of the Borrower, with and into Insignia
on July 23, 2003, with Insignia surviving as a wholly owned Subsidiary of
the Borrower.

 

“Insignia
Merger Agreement” shall mean the Amended and Restated Agreement and
Plan of Merger, dated as of May 28, 2003, among the Borrower, Holdings,
Insignia Merger Sub and Insignia, and all other material documents entered into
or delivered in connection with the Insignia Merger Agreement.

 

“Insignia
Transaction Documents” shall mean (a) the Insignia Merger
Agreement, (b) the Island Purchase Agreement, (c) any other
agreements executed pursuant to the Insignia Merger Agreement or the Island
Purchase Agreement and (d) the Senior Unsecured Note Documents.

 

14

 

“Interest
Coverage Ratio” shall mean, for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) the sum of
Consolidated Interest Expense plus Restricted Payments made under
Section 6.06(a)(ii) by the Borrower for such period.

 

“Interest
Payment Date” shall mean (a) with respect to any ABR Loan, the
last Business Day of each March, June, September and December and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
that would have been an Interest Payment Date had successive Interest Periods
of three months’ duration been applicable to such Borrowing.

 

“Interest
Period” shall mean, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day (or, if there is no numerically corresponding
day, on the last day) in the calendar month that is 1, 2, 3 or 6 months
thereafter (or 9 or 12 months thereafter if, at the time of the relevant
Borrowing, all Lenders participating therein agree to make an interest period
of such duration available), as the Borrower may elect; provided, however,
that if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business
Day.  Interest shall accrue from and
including the first day of an Interest Period to but excluding the last day of
such Interest Period.  For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.

 

“Island”
shall mean Island Fund I LLC, a Delaware limited liability company.

 

“Island
Purchase Agreement” shall mean the Purchase Agreement dated as of
May 28, 2003, among Insignia, the Borrower, Holdings, Apple Acquisition
Corp. and Island.

 

“Island
Transaction” shall mean the sale by Insignia and certain of its
subsidiaries to Island of certain real estate investment assets of Insignia,
pursuant to the Island Purchase Agreement.

 

“Issuing Bank”
shall mean, as the context may require, (a) Credit Suisse First Boston, in
its capacity as the issuer of Letters of Credit hereunder, and (b) any
other Lender that may become an Issuing Bank pursuant to Section 2.23(i)
or (k), with respect to Letters of Credit issued by such Lender.  The Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the
Issuing Bank, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.

 

“Issuing Bank
Fees” shall have the meaning assigned to such term in
Section 2.05(c).

 

“JV
Subsidiary” shall mean a partially owned Subsidiary in which the
Borrower or any Subsidiary has contributed assets or otherwise made an
investment in (including of cash) with a fair market value (determined on the
date of such contribution or investment, as the case may be) of $500,000 or
less in the aggregate; provided, that the aggregate fair market
value (determined on the date of such contribution or investment, as the case
may be) of all assets contributed, indebtedness assumed or investments made by
the Borrower or Subsidiaries in all JV Subsidiaries shall not exceed in the
aggregate $3,000,000.

 

15

 

“L/C
Commitment” shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.23.

 

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

 

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

 

“L/C
Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).

 

“Lenders”
shall mean (a) the persons listed on Schedule 2.01 (other than any
such person that has ceased to be a party hereto pursuant to an Assignment and
Acceptance) and (b) any person that has become a party hereto pursuant to
an Assignment and Acceptance.  Unless
the context clearly indicates otherwise, the term “Lenders” shall include the
Swingline Lender.

 

“Letter of
Credit” shall mean any letter of credit issued pursuant to Section 2.23.

 

“Leverage
Ratio” shall mean, on any date, the ratio of Total Debt less
Available Cash on such date to Consolidated EBITDA for the period of four
consecutive fiscal quarters most recently ended on or prior to such date.

 

“LIBO Rate”
shall mean, with respect to any Eurodollar Borrowing for any Interest Period,
the rate per annum determined by the Administrative Agent at approximately
11:00 a.m., London time, on the date that is two Business Days prior to the
commencement of such Interest Period by reference to the British Bankers’
Association Interest Settlement Rates for deposits in dollars (as set forth by
the Bloomberg Information Service or any successor thereto or any other service
selected by the Administrative Agent which has been nominated by the British
Bankers’ Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the “LIBO Rate” shall be the interest
rate per annum determined by the Administrative Agent to be the average of the
rates per annum at which deposits in dollars are offered for such relevant
Interest Period to major banks in the London interbank market in London,
England by the Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the beginning of such
Interest Period.

 

“Lien”
shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, charge or security interest in or on such asset,
(b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to
such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities (other than a
purchase right or right of first refusal with respect to Equity Interests in a
JV Subsidiary).

 

“Loan
Documents” shall mean this Agreement, the Amendment Agreement, the
Letters of Credit, the Collateral Agreement, the Security Documents and each
Incremental Term Loan Assumption Agreement.

 

16

 

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

 

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

 

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

 

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

 

“Material
Indebtedness” shall mean Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of Holdings, the Borrower and the Subsidiaries
in an aggregate principal amount exceeding $7,500,000.  For purposes of determining Material Indebtedness,
the “principal amount” of the obligations of Holdings, the Borrower or any
Subsidiary in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that Holdings, the
Borrower or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.

 

“Melody”
shall mean L.J. Melody & Company, a Texas corporation.

 

“Melody Loan
Arbitrage Facility” shall mean a credit facility provided to Melody
by any depository bank in which Melody deposits payments relating to mortgage
loans for which Melody is servicer or sub-servicer prior to distribution of
such payments to or for the benefit of the borrower of such loans or the
holders of such loans, so long as (i) Melody applies all proceeds of loans
made under such credit facility to purchase Permitted Investments, and
(ii) all such Permitted Investments purchased by Melody with the proceeds
of loans thereunder (and proceeds thereof and distributions thereon) are pledged
to the depository bank providing such credit facility, and such bank has a
first priority perfected security interest therein, to secure loans made under
such credit facility.

 

“Melody
Mortgage Warehousing Facility” shall mean the credit facility provided
by Residential Funding Corporation (“RFC”) or any substantially similar
facility extended to any Mortgage Banking Subsidiary in connection with any
Mortgage Banking Activities, pursuant to which RFC or another lender makes
loans to Melody, the proceeds of which loans are applied by Melody (or any
Mortgage Banking Subsidiary) to fund commercial mortgage loans originated and
owned by Melody (or any Mortgage Banking Subsidiary) subject to a commitment
(subject to customary exceptions) to purchase such mortgage loans by the
Federal Home Loan Mortgage Corporation, the Federal National Mortgage
Association or any other quasi-federal governmental entity so long as loans
made by RFC or such other lender to Melody (or any Mortgage Banking Subsidiary)
thereunder are secured by a pledge of commercial mortgage loans made by Melody
(or any Mortgage Banking Subsidiary) with the proceeds of such loans, and RFC
or such other lender has a perfected first priority security interest therein,
to secure loans made under such credit facility.

 

“Melody
Permitted Indebtedness” shall mean Indebtedness of Melody under the
Melody Loan Arbitrage Facility, the Melody Mortgage Warehousing Facility and
the Melody Working Capital Facility and Indebtedness of any Mortgage Banking
Subsidiary under the Melody

 

17

 

Mortgage Warehousing Facility
that is, in all cases, non-recourse to the Borrower or any of the other
Subsidiaries.

 

“Melody
Working Capital Facility” shall mean a credit facility provided by a
financial institution to Melody, so long as (i) the proceeds of loans
thereunder are applied only to provide working capital to Melody,
(ii) loans under such credit facility are unsecured, and (iii) the
aggregate principal amount of loans outstanding under such credit facility at
no time exceeds $1,000,000.

 

“Merger
Transactions” shall mean, collectively, the transactions that
occurred on or prior to the First Restatement Date pursuant to the Insignia
Transaction Documents, including (a) the consummation of the Insignia
Merger, (b) the borrowing of the Additional Tranche B Term Loans (as
defined in the Existing Credit Agreement) on the First Restatement Date,
(c) the execution and delivery of the Senior Unsecured Note Documents and
the issuance of the Senior Unsecured Notes, (d) the Cash Equity
Contribution, (e) the execution and delivery of the Island Purchase
Agreement and the consummation of the Island Transaction and (f) the
payment of all fees and expenses paid in connection with the foregoing.

 

“Mortgage
Banking Activities” shall mean the origination by a Mortgage Banking
Subsidiary of mortgage loans in respect of commercial and multi-family
residential real property, and the sale or assignment of such mortgage loans
and the related mortgages to another person (other than the Borrower or any
other Subsidiary) within sixty days after the origination thereof; provided,
however, that in each case prior to origination of any mortgage
loan, the Borrower or a Mortgage Banking Subsidiary, as the case may be, shall
have entered into a legally binding and enforceable purchase and sale agreement
with respect to such mortgage loan with a person that purchases such loans in
the ordinary course of business.

 

“Mortgage
Banking Subsidiary” shall mean Melody and its subsidiaries that are
engaged in Mortgage Banking Activities.

 

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

 

“Net Cash
Proceeds” shall mean (a) with respect to any Asset Sale, the
cash proceeds (including cash proceeds subsequently received (as and when
received) in respect of noncash consideration initially received), net of
(i) selling expenses (including reasonable broker’s fees or commissions,
legal fees, transfer and similar taxes and the Borrower’s good faith estimate
of taxes paid or reasonably estimated to be payable in connection with such
sale), (ii) amounts provided as a reserve, in accordance with GAAP,
against any liabilities under any indemnification obligations or purchase price
adjustment associated with such Asset Sale (provided that, to the extent and at the
time any such amounts are released from such reserve, such amounts shall
constitute Net Cash Proceeds) and (iii) the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness for borrowed
money which is secured by the asset sold in such Asset Sale and which is
required to be repaid with such proceeds (other than any such Indebtedness
assumed by the purchaser of such asset); provided, however, that, if
(x) the Borrower shall deliver a certificate of a Financial Officer to the
Administrative Agent at the time of receipt thereof setting forth the
Borrower’s intent to reinvest such proceeds in assets of a kind then used or
usable in the business of the Borrower and its Subsidiaries or in the Equity
Interests of a person engaged in the same or related business as that of the
Borrower or any Subsidiary within 270 days of receipt of such proceeds and
(y) no Default or Event of Default shall have occurred and shall be
continuing at the time of such certificate or at the proposed time

 

18

 

of the application of such
proceeds, such proceeds shall not constitute Net Cash Proceeds except to the
extent not so used or contractually committed to be used at the end of such
270-day period, at which time such proceeds shall be deemed to be Net Cash
Proceeds; and (b) with respect to any incurrence or disposition of
Indebtedness or any Equity Issuance, the cash proceeds thereof, net of all
taxes and customary fees, commissions, costs and other expenses incurred in
connection therewith.

 

“Non-Recourse
Indebtedness” shall mean Indebtedness of, or Guarantees by, a
Co-investment Subsidiary; provided that (x) such Indebtedness
is incurred solely in relation to the permitted investment activities of such
Co-investment Subsidiary, (y) such Indebtedness is not Guaranteed by, or
otherwise recourse to, Holdings, the Borrower or any Subsidiary other than a
Co-investment Subsidiary and (z) the aggregate amount of such Indebtedness
of all Co-investment Subsidiaries that shall qualify as “Non-Recourse
Indebtedness” shall not exceed $10,000,000 outstanding at any time.

 

“Obligations”
shall have the meaning assigned to such term in the Collateral Agreement.

 

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

 

“Other Term
Loans” shall have the meaning assigned to such term in
Section 2.25(a).

 

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

 

“Perfection
Certificate” shall mean the Perfection Certificate substantially in
the form of Annex 2 to the Collateral Agreement.

 

“Permitted
Acquisition” shall have the meaning assigned to such term in
Section 6.04(g).

 

“Permitted
Investments” shall mean:

 

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

 

(b) 
investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from Standard & Poor’s Ratings
Service or from Moody’s Investors Service, Inc.;

 

(c) 
investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued
or guaranteed by or placed with, and money market deposit accounts issued or
offered by, the Administrative Agent or any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $500,000,000;

 

19

 

(d) 
fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria of clause (c) above;

 

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

 

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

 

“Permitted
Investors” shall mean (a) the Sponsors and any other person who
is an Affiliate of any of the foregoing, (b) DLJ Investment Partners II,
Inc. and any of its Affiliates and (c) any member of senior management of
the Borrower on the First Restatement Date.

 

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

 

“Plan”
shall mean any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 307 of ERISA, and in respect of which the Borrower or any
ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

 

“Prime Rate”
shall mean the rate of interest per annum publicly announced from time to time
by Credit Suisse First Boston as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective
on the date such change is publicly announced as being effective.

 

“Pro Forma
Basis” shall mean, with respect to compliance with any test or
covenant hereunder, in connection with or after the occurrence of any Permitted
Acquisition or Restricted Payment permitted under Section 6.06(a)(ii),
compliance with such covenant or test after giving effect to any such proposed
Permitted Acquisition (including pro forma adjustments arising out of events which
are directly attributable to the proposed Permitted Acquisition, are factually
supportable and are expected to have a continuing impact, in each case
determined on a basis consistent with Article 11 of Regulation S-X of
the Securities Act of 1933, as amended, and as interpreted by the staff of the
Securities and Exchange Commission using, for purposes of determining such
compliance, the historical financial statements of all entities or assets so
acquired or to be acquired and the consolidated financial statements of the
Borrower and the Subsidiaries which shall be reformulated as if such Permitted
Acquisition, and any other Permitted Acquisitions or Asset Sales that have been
consummated during or after the end of the relevant period, and any Indebtedness
or other liabilities incurred in connection with any such Permitted
Acquisitions or otherwise after the end of the relevant period had been
consummated or incurred, respectively, at the beginning of such period and
assuming that any such Indebtedness bears interest during any portion of the
applicable measurement period prior to the relevant acquisition at the weighted
average of the interest rates applicable to outstanding Loans during such
period) or such proposed Restricted Payment.

 

20

 

“Pro Forma Compliance”
shall mean, at any date of determination, that the Borrower shall be in pro
forma compliance with the covenants set forth in Sections 6.11, 6.12, 6.13
and 6.14 as of the last day of the most recent fiscal quarter-end (computed on
the basis of (a) balance sheet amounts as of the most recently completed
fiscal quarter, and (b) income statement amounts for the most recently
completed period of four consecutive fiscal quarters, in each case, for which financial
statements shall have been delivered to the Administrative Agent and calculated
on a Pro Forma Basis).

 

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

 

 “Register” shall have the meaning assigned
to such term in Section 9.04(d).

 

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

 

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

 

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

 

“Related Fund”
shall mean, with respect to any Lender, any other person that (x) invests
in bank loans and (y) is advised or managed by the same investment advisor
as such Lender, by an Affiliate of such investment advisor or by such Lender.

 

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

 

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

 

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

 

“Required
Lenders” shall mean, at any time, Lenders having Loans (excluding
Swingline Loans), L/C Exposure, Swingline Exposure and unused Revolving Credit
Commitments and Term Loan Commitments representing at least a majority of the
sum of all Loans outstanding (excluding Swingline Loans), L/C Exposure,
Swingline Exposure and unused Revolving Credit Commitments and Term Loan
Commitments at such time.

 

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

 

“Restatement
Date” shall mean the date occurring on or prior to October 14,
2003, on which each of the conditions specified in Section 4.02 is
satisfied.

 

21

 

“Restricted
Indebtedness” shall mean Indebtedness of Holdings, the Borrower or
any Subsidiary, the payment, prepayment, repurchase or defeasance of which is
restricted under Section 6.09(b).

 

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

 

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

 

“Revolving
Credit Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender assumed its Revolving Credit Commitment, as applicable, as the same may
be (a) reduced from time to time pursuant to Section 2.09 and
(b) reduced or increased from time to time pursuant to assignments by or
to such Lender pursuant to Section 9.04.

 

“Revolving
Credit Exposure” shall mean, with respect to any Lender at any time,
the aggregate principal amount at such time of all outstanding Revolving Loans
of such Lender, plus the aggregate amount at such time of such Lender’s L/C
Exposure, plus
the aggregate amount at such time of such Lender’s Swingline Exposure.

 

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

 

“Revolving
Credit Maturity Date” shall mean July 20, 2007.

 

“Revolving
Loans” shall mean the revolving loans made by the Lenders to the
Borrower pursuant to clause (c) of Section 2.01.

 

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

 

“Security
Documents” shall mean the Collateral Agreement and each of the
security agreements and other instruments and documents executed and delivered
pursuant to any of the foregoing or pursuant to Section 5.09.

 

“Senior
Secured Leverage Ratio” shall mean, on any date, the ratio of Total
Debt less the sum of (a) the aggregate outstanding principal amount of the
Senior Subordinated Notes and the Senior Unsecured Notes plus
(b) Available Cash on such date to Consolidated EBITDA for the period of
four consecutive fiscal quarters most recently ended on or prior to such date.

 

“Senior
Subordinated Note Documents” shall mean the Senior Subordinated
Notes, the Senior Subordinated Note Indenture and all other material
instruments, agreements and other documents evidencing or governing the Senior
Subordinated Notes or providing for any right in respect thereof.

 

22

 

“Senior
Subordinated Note Indenture” shall mean the indenture dated as of
June 7, 2001, between the Borrower, Holdings and First State Street Bank,
as trustee, as in effect on the Closing Date and as thereafter amended from
time to time in accordance with the requirements thereof and of this Agreement.

 

“Senior
Subordinated Notes” shall mean the Borrower’s 11-1/4% Senior
Subordinated Notes Due June 15, 2011, issued pursuant to the Senior
Subordinated Note Indenture and any notes issued by the Borrower in exchange
for, and as contemplated by, the Senior Subordinated Notes with substantially
identical terms as the Senior Subordinated Notes.

 

“Senior
Unsecured Note Documents” shall mean the Senior Unsecured Notes, the
Senior Unsecured Note Indenture and all other material instruments, agreements
and other documents evidencing or governing the Senior Unsecured Notes or
providing for any right in respect thereof.

 

“Senior
Unsecured Note Indenture” shall mean the indenture dated as of
May 22, 2003, between the Borrower, Holdings and U.S. Bank National
Association, as trustee, as in effect on the Restatement Date and as thereafter
amended from time to time in accordance with the requirements thereof and of
this Agreement.

 

“Senior
Unsecured Notes” shall mean the Borrower’s 9.75% Senior Unsecured
Notes Due May 15, 2010, issued pursuant to the Senior Unsecured Note
Indenture and any notes issued by the Borrower in exchange for, and as
contemplated by, the Senior Unsecured Notes with substantially identical terms
as the Senior Unsecured Notes.

 

“Sponsors”
shall mean Blum Strategic Partners, L.P. and Freeman Spogli & Co.
Incorporated.

 

“SPC”
shall have the meaning assigned to such term in Section 9.04(i).

 

“Special Co-investment
Subsidiary” shall mean any wholly-owned Co-investment Subsidiary
that is or could become an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940 as a result of becoming a
Subsidiary Guarantor or a guarantor under the Senior Subordinated Note
Indenture or the Senior Unsecured Note Indenture.

 

“Statutory
Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch,
Affiliate, or other fronting office making or holding a Loan) is subject for
Eurocurrency Liabilities (as defined in Regulation D of the Board).  Eurodollar Loans shall be deemed to
constitute Eurocurrency Liabilities as defined in Regulation D of the
Board) and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D.  Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.

 

“subsidiary”
shall mean, with respect to any person (herein referred to as the “parent”),
any corporation, partnership, association or other business entity of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary

 

23

 

voting power or more than 50%
of the general partnership interests (other than the general partnership
interests owned controlled or held by the Borrower or any Subsidiary in any
Co-investment Vehicle or in any person which is not Controlled by the Borrower
or any Subsidiary) are, at the time any determination is being made, owned,
Controlled or held.

 

“Subsidiary”
shall mean any subsidiary of the Borrower; provided, however, that no Designated
Real Estate Asset Subsidiary shall be deemed to be a Subsidiary for purposes of
this Agreement or the other Loan Documents.

 

“Subsidiary
Guarantor” shall mean each Domestic Subsidiary listed on
Schedule 1.01(a), and each other Subsidiary that is or becomes a party to
a Collateral Agreement.

 

“Swingline
Commitment” shall mean the commitment of the Swingline Lender to
make loans pursuant to Section 2.22, as the same may be reduced from time
to time pursuant to Section 2.09.

 

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

 

“Swingline
Lender” shall mean Credit Suisse First Boston, acting through its
Cayman Islands branch, in its capacity as lender of Swingline Loans hereunder.

 

“Swingline
Loan” shall mean any loan made by the Swingline Lender pursuant to
Section 2.22.

 

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

 

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

 

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

 

“Term Loan
Commitment” shall mean, with respect to each Lender, (a) the
commitment of such Lender to make Term Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such
Lender assumed its Term Loan Commitment, as applicable, as the same may be
(i) reduced from time to time pursuant to Section 2.09 and
(ii) reduced or increased from time to time pursuant to assignments by or
to such Lender pursuant to Section 9.04 and (b) any Incremental Term
Loan Commitment.

 

24

 

“Term Loan
Repayment Dates” shall mean the Repayment Dates and the Incremental
Term Loan Repayment Dates.

 

“Term Loans”
shall mean the term loans made by the Lenders to the Borrower pursuant to
clause (a) of Section 2.01. 
Unless the context shall otherwise require, the term “Term Loans” shall
include any Incremental Term Loans.

 

“Term Loan Maturity Date”
shall mean December 31, 2008.

 

“Total Debt”
shall mean, at any time, the total Indebtedness of the Borrower and the
Subsidiaries at such time, determined on a consolidated basis (excluding
(a) Melody Permitted Indebtedness, (b) Non-Recourse Indebtedness,
(c) the UK Acquisition Notes, to the extent the bank guarantee in respect
thereof is cash collateralized as permitted hereunder, and
(d) Indebtedness of the type described in clause (i) of the
definition of such term, except to the extent of any unreimbursed drawings
thereunder).

 

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

 

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

 

“UK
Acquisition Notes” shall mean (a) the floating rate guaranteed
loan notes due April 30, 2010, issued by Insignia to the vendors of
Richard Ellis Group Limited pursuant to an instrument dated March 26, 2001
and (b) the 3% guaranteed unsecured loan notes due April 30, 2006,
issued by Insignia to the vendors of St. Quintin Holdings Limited pursuant
to an instrument dated March 26, 2001, each of which is fully guaranteed
as to principal and interest by the Royal Bank of Scotland plc (such guarantee
secured by restricted cash deposits by Insignia or its Subsidiaries with the
Royal Bank of Scotland plc pursuant to Memoranda of Cash Deposits).

 

“wholly owned
Subsidiary” of any person shall mean a subsidiary of such person of
which securities (except for directors’ qualifying shares) or other ownership
interests representing 100% of the Equity Interests are, at the time any
determination is being made, owned, controlled or held by such person or one or
more wholly owned Subsidiaries of such person or by such person and one or more
wholly owned Subsidiaries of such person.

 

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

 

SECTION 1.02.  Terms Generally. 
The definitions in Section 1.01 shall apply equally to both the
singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed
to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and
effect as the word “shall”; and the words “asset” and “property” shall be
construed as having the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.  All
references herein to Articles, Sections, Exhibits and

 

25

 

Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require.  Except as otherwise expressly provided herein, (a) any
reference in this Agreement to any Loan Document shall mean such document as
amended, restated, supplemented or otherwise modified from time to time and
(b) all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided, however,
that if the Borrower notifies the Administrative Agent that the Borrower wishes
to amend any covenant in Article VI or any related definition to eliminate
the effect of any change in GAAP occurring after the date of this Agreement on
the operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Required Lenders wish to amend Article VI or any related
definition for such purpose), then the Borrower’s compliance with such covenant
shall be determined on the basis of GAAP in effect immediately before the
relevant change in GAAP became effective, until either such notice is withdrawn
or such covenant is amended in a manner satisfactory to the Borrower and the
Required Lenders.

 

SECTION 1.03.  Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be
classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g.,
a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified and referred
to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g.,
a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar
Revolving Borrowing”).

 

SECTION 1.04.  Pro Forma Calculations.  With respect to any period during which any
Permitted Acquisition occurs as permitted pursuant to the terms hereof, for
purposes of determining compliance or Pro Forma Compliance with the covenants
set forth in Sections 6.11, 6.12, 6.13 and 6.14, the Interest Coverage
Ratio, Fixed Charge Coverage Ratio, the Leverage Ratio and the Senior Secured
Leverage Ratio shall be calculated with respect to such periods and such
Permitted Acquisition on a Pro Forma Basis.

 

SECTION 1.05.  Designation of Obligations.  The Obligations, including the Obligations
in respect of the Term Loans, are hereby designated as “Designated Senior
Indebtedness” for all purposes of the Senior Subordinated Note Indenture.

 

ARTICLE
II

 

The Credits

 

SECTION 2.01.  Commitments. 
(a) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender agrees, severally
and not jointly, (a) if such Lender has a Term Loan Commitment, to make a
Term Loan to the Borrower on the Restatement Date in a principal amount not to
exceed its Term Loan Commitment, (b) if such Lender has a Revolving Credit
Commitment, to make Revolving Loans to the Borrower, at any time and from time
to time on or after the Closing Date and prior the earlier of the Revolving
Credit Maturity Date and the termination of the Revolving Credit Commitment of
such Lender in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in such Lender’s Revolving
Credit Exposure exceeding such Lender’s Revolving Credit Commitment, and (c) if
such lender has an Incremental Term Loan Commitment, to make Incremental Term
Loans to the Borrower, in an aggregate principal amount not to exceed its
Incremental Term Loan Commitment. 
Within the limits set forth in clause (b) of the preceding sentence
and subject to the terms, conditions and limitations set forth herein, the
Borrower may

 

26

 

borrow, pay or prepay and
reborrow Revolving Loans.  Amounts paid
or prepaid in respect of Term Loans may not be reborrowed.  The Borrower and the Lenders acknowledge the
making of Revolving Loans prior to the Restatement Date under the Existing
Credit Agreement and agree, to the extent outstanding on the Restatement Date,
such Revolving Loans shall continue to be outstanding pursuant to the terms and
conditions of this Agreement and the other Loan Documents.

 

SECTION 2.02.  Loans. 
(a)  Each Loan (other than
Swingline Loans) shall be made as part of a Borrowing consisting of Loans made
by the Lenders ratably in accordance with their respective applicable
Commitments; provided, however, that the failure of any Lender to
make any Loan shall not in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be responsible
for the failure of any other Lender to make any Loan required to be made by
such other Lender).  Except for Loans
deemed made pursuant to Section 2.02(f), the Loans comprising any
Borrowing shall be in an aggregate principal amount that is (i) an integral
multiple of $1,000,000 and not less than $5,000,000 (except with respect to any
Incremental Term Borrowing, to the extent otherwise provided in the related
Incremental Term Loan Assumption Agreement) or (ii) equal to the remaining
available balance of the applicable Commitments.

 

(b)  Subject to Sections 2.08 and 2.15, each
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request pursuant to Section 2.03.  Each Lender may at its option make any Eurodollar Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided
that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this
Agreement.  Borrowings of more than one
Type may be outstanding at the same time; provided, however, that the Borrower
shall not be entitled to request any Borrowing that, if made, would result
in more than 10 Eurodollar Borrowings outstanding hereunder at any
time.  For purposes of the foregoing,
Borrowings having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Borrowings.

 

(c)  Except with respect to Loans deemed made
pursuant to Section 2.02(f), each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds to such account in New York City as the Administrative
Agent may designate not later than 2:00 p.m., New York City time, and
the Administrative Agent shall promptly credit the amounts so received to an
account in the name of the Borrower, designated by the Borrower in the
applicable Borrowing Request, or, if a Borrowing shall not occur on such date
because any condition precedent herein specified shall not have been met,
return the amounts so received to the respective Lenders.

 

(d)  Unless the Administrative Agent shall have
received notice from a Lender prior to the date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s
portion of such Borrowing, the Administrative Agent may assume that such Lender
has made such portion available to the Administrative Agent on the date of such
Borrowing in accordance with paragraph (c) above and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount.  If
the Administrative Agent shall have so made funds available then, to the extent
that such Lender shall not have made such portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent

 

27

 

at (i) in the case of the
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender for the first three days, a
rate determined by the Administrative Agent to represent its cost of overnight
or short-term funds and for each day thereafter, the Applicable Base Rate
(which determination shall be conclusive absent manifest error).  If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Loan as part of such Borrowing for purposes of this Agreement.

 

(e)  Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request any Revolving Credit
Borrowing if (i) the Interest Period requested with respect thereto would
end after the Revolving Credit Maturity Date or (ii) any Swingline Loan
would be outstanding after giving effect to the use of proceeds of such
Borrowing.

 

(f)  If the Issuing Bank shall not have received
from the Borrower the payment required to be made by Section 2.23(e)
within the time specified in such Section, the Issuing Bank will promptly
notify the Administrative Agent of the L/C Disbursement and the Administrative
Agent will promptly notify each Revolving Credit Lender of such L/C
Disbursement and its Pro Rata Percentage thereof.  Each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m.,
New York City time, on such date (or, if such Revolving Credit Lender
shall have received such notice later than 12:00 (noon), New York
City time, on any day, not later than 10:00 a.m., New York City time, on
the immediately following Business Day), an amount equal to such Lender’s Pro
Rata Percentage of such L/C Disbursement (it being understood that such amount
shall be deemed to constitute an ABR Revolving Loan of such Lender and such
payment shall be deemed to have reduced the L/C Exposure), and the
Administrative Agent will promptly pay to the Issuing Bank amounts so received
by it from the Revolving Credit Lenders. 
The Administrative Agent will promptly pay to the Issuing Bank any
amounts received by it from the Borrower pursuant to Section 2.23(e) prior
to the time that any Revolving Credit Lender makes any payment pursuant to this
paragraph (f); any such amounts received by the Administrative Agent
thereafter will be promptly remitted by the Administrative Agent to the
Revolving Credit Lenders that shall have made such payments and to the Issuing
Bank, as their interests may appear.  If
any Revolving Credit Lender shall not have made its Pro Rata Percentage of such
L/C Disbursement available to the Administrative Agent as provided above, such
Lender and the Borrower severally agree to pay interest on such amount, for
each day from and including the date such amount is required to be paid in
accordance with this paragraph to but excluding the date such amount is paid,
to the Administrative Agent for the account of the Issuing Bank at (i) in
the case of the Borrower, a rate per annum equal to the interest rate
applicable to Revolving Loans pursuant to Section 2.06(a), and
(ii) in the case of such Lender, for the first such day, the Federal Funds
Effective Rate, and for each day thereafter, the Alternate Base Rate.

 

SECTION 2.03.  Borrowing Procedure.  In order to request a Borrowing (other than
a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to
which this Section 2.03 shall not apply), the Borrower shall hand deliver
or fax to the Administrative Agent a duly completed Borrowing Request
(a) in the case of a Eurodollar Borrowing, not later than 1:00 p.m.,
New York City time, three Business Days before a proposed Borrowing, and
(b) in the case of an ABR Borrowing, not later than 12:00 noon,
New York City time, on the Business Day of a proposed Borrowing.  Each Borrowing Request shall be irrevocable,
shall be signed by or on behalf of the Borrower and shall specify the following
information:  (i) whether the
Borrowing then being requested is to be a Term Borrowing, an Incremental Term
Borrowing or a Revolving Credit Borrowing, and whether such Borrowing is to be
a Eurodollar Borrowing or an ABR

 

28

 

Borrowing; (ii) the date
of such Borrowing (which shall be a Business Day); (iii) the number and
location of the account to which funds are to be disbursed (which shall be an
account that complies with the requirements of Section 2.02(c));
(iv) the amount of such Borrowing; and (v) if such Borrowing is to be
a Eurodollar Borrowing, the Interest Period with respect thereto; provided,
however,
that, notwithstanding any contrary specification in any Borrowing Request, each
requested Borrowing shall comply with the requirements set forth in
Section 2.02.  If no election as to
the Type of Borrowing is specified in any such notice, then the requested
Borrowing shall be an ABR Borrowing.  If
no Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month’s duration.  The
Administrative Agent shall promptly advise the applicable Lenders of any notice
given pursuant to this Section 2.03 (and the contents thereof), and of
each Lender’s portion of the requested Borrowing.

 

SECTION 2.04.  Evidence of Debt; Repayment of Loans.  (a)  The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender (i) the principal amount of each Term Loan of such Lender as
provided in Section 2.11 and (ii) the then unpaid principal amount of
each Revolving Loan of such Lender on the Revolving Credit Maturity Date.  The Borrower hereby promises to pay to the
Swingline Lender the then unpaid principal amount of each Swingline Loan on the
Revolving Credit Maturity Date.

 

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

 

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

 

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

 

(e)  Any Lender may request that Loans made by it
hereunder be evidenced by a promissory note. 
In such event, the Borrower shall execute and deliver to such Lender a
promissory note payable to such Lender and its registered assigns and in a form
and substance reasonably acceptable to the Administrative Agent and the
Borrower.  Notwithstanding any other
provision of this Agreement, in the event any Lender shall request and receive
such a promissory note, the interests represented by such note shall at all
times (including after any assignment of all or part of such interests pursuant
to Section 9.04) be represented by one or more promissory notes payable to
the payee named therein or its registered assigns.

 

SECTION 2.05.  Fees. 
(a)  The Borrower agrees to pay
to each Lender, through the Administrative Agent, on the last Business Day of
March, June, September and December in each year and on each date on which the
Revolving Credit Commitment of such Lender shall expire or be terminated as
provided herein, a commitment fee (a “Commitment
Fee”) equal to 3/4 of 1%

 

29

 

per annum on the daily unused amount
of the Revolving Credit Commitments of such Lender during the preceding quarter
(or other period ending with the Revolving Credit Maturity Date or the date on
which the Commitments of such Lender shall expire or be terminated).  All Commitment Fees shall be computed on the
basis of the actual number of days elapsed in a year of 360 days.  The Commitment Fee due to each Lender shall
commence to accrue on the Restatement Date and shall cease to accrue on the
date on which the Revolving Credit Commitment of such Lender shall expire or be
terminated as provided herein.  For
purposes of calculating Commitment Fees only, no portion of the Revolving
Credit Commitments shall be deemed utilized under Section 2.17 as a result
of outstanding Swingline Loans.

 

(b)  The Borrower agrees to pay to the
Administrative Agent, for its own account, the administrative fees at the times
and in the amounts agreed to by the Borrower and the Administrative Agent from
time to time (the “Administrative Agent Fees”).

 

(c)  The Borrower agrees to pay (i) to each
Revolving Credit Lender, through the Administrative Agent, on the last Business
Day of March, June, September and December of each year and on the date on
which the Revolving Credit Commitment of such Lender shall be terminated as
provided herein, a fee (an “L/C Participation Fee”) calculated on such
Lender’s Pro Rata Percentage of the daily aggregate L/C Exposure (excluding the
portion thereof attributable to unreimbursed L/C Disbursements) during the
preceding quarter (or shorter period commencing with the date hereof or ending
with the Revolving Credit Maturity Date or the date on which all Letters of
Credit have been canceled or have expired and the Revolving Credit Commitments
of all Lenders shall have been terminated) at a rate per annum equal to the
Applicable Percentage from time to time used to determine the interest rate on
Revolving Credit Borrowings comprised of Eurodollar Loans pursuant to
Section 2.06, and (ii) to the Issuing Bank with respect to each Letter
of Credit the standard fronting, issuance and drawing fees as agreed by the
Issuing Bank and the Borrower (the “Issuing Bank Fees”).  All L/C Participation Fees and Issuing Bank
Fees shall be computed on the basis of the actual number of days elapsed in a
year of 360 days.

 

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

 

SECTION 2.06.  Interest on Loans.  (a)  Subject to the
provisions of Section 2.07, the Loans comprising each ABR Borrowing,
including each Swingline Loan, shall bear interest (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the
case may be, when the Alternate Base Rate is determined by reference to the
Prime Rate and over a year of 360 days at all other times) at a rate per annum
equal to the Alternate Base Rate plus the Applicable Percentage in effect from
time to time.

 

(b)  Subject to the provisions of
Section 2.07, the Loans comprising each Eurodollar Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to the Adjusted LIBO Rate for
the Interest Period in effect for such Borrowing plus the Applicable Percentage
in effect from time to time.

 

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

 

30

 

SECTION 2.07.  Default Interest.  If the Borrower shall default in the payment of the principal of
or interest on any Loan or any other amount becoming due hereunder, by
acceleration or otherwise, or under any other Loan Document, the Borrower shall
on demand from time to time pay interest, to the extent permitted by law, on
such defaulted amount to but excluding the date of actual payment (after as
well as before judgment) (a) in the case of overdue principal, at the rate
otherwise applicable to such Loan pursuant to Section 2.06 plus 2.00% per
annum and (b) in all other cases, at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be, when determined by reference to the Prime Rate and over a
year of 360 days at all other times) equal to the rate that would be
applicable to an ABR Revolving Loan plus 2.00%.

 

SECTION 2.08.  Alternate Rate of Interest.  In the event, and on each occasion, that on
the day two Business Days prior to the commencement of any Interest Period for
a Eurodollar Borrowing the Administrative Agent shall have determined that
dollar deposits in the principal amounts of the Loans comprising such Borrowing
are not generally available in the London interbank market, or that the rates
at which such dollar deposits are being offered will not adequately and fairly
reflect the cost to the Required Lenders of making or maintaining its
Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or fax notice of such
determination to the Borrower and the Lenders. 
In the event of any such determination, until the Administrative Agent
shall have advised the Borrower and the Lenders that the circumstances giving
rise to such notice no longer exist, any request by the Borrower for a
Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall be deemed to
be a request for an ABR Borrowing. 
Each determination by the Administrative Agent under this Section 2.08
shall be conclusive absent manifest error.

 

SECTION 2.09.  Termination and Reduction of Commitments.  (a) 
The Term Loan Commitments shall automatically terminate upon the earlier
to occur of (i) the making of the Term Loans on the Restatement Date and
(ii) 5:00 p.m., New York City time, on October 31, 2003.  The Revolving Credit Commitments, the
Swingline Commitment and the L/C Commitment shall automatically terminate on
the Revolving Credit Maturity Date.

 

(b)  Upon at least three Business Days’ prior
irrevocable written or fax notice (or telephone notice promptly confirmed by a
written notice) to the Administrative Agent, the Borrower may, without premium
or penalty, at any time in whole permanently terminate, or from time to time in
part permanently reduce, the Term Loan Commitments or the Revolving Credit
Commitments; provided, however, that (i) each partial
reduction of the Term Loan Commitments or the Revolving Credit Commitments
shall be in an integral multiple of $1,000,000 and in a minimum amount of
$5,000,000 and (ii) the Total Revolving Credit Commitment shall not be
reduced to an amount that is less than the sum of the Aggregate Revolving
Credit Exposure at the time.

 

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

 

31

 

SECTION 2.10.  Conversion and Continuation of Borrowings.  The Borrower shall have the right at any
time upon prior irrevocable notice to the Administrative Agent (a) not
later than 1:00 p.m., New York City time, two Business Days prior to
conversion, to convert any Eurodollar Borrowing into an ABR Borrowing,
(b) not later than 1:00 p.m., New York City time, three Business
Days prior to conversion or continuation, to convert any ABR Borrowing into a
Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar
Borrowing for an additional Interest Period, and (c) not later than
1:00 p.m., New York City time, three Business Days prior to
conversion, to convert the Interest Period with respect to any Eurodollar
Borrowing to another permissible Interest Period, subject in each case to the
following:

 

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

 

(ii)  if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing shall
satisfy the limitations specified in Sections 2.02(a) and 2.02(b)
regarding the principal amount and maximum number of Borrowings of the relevant
Type;

 

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

 

(iv)  if any Eurodollar Borrowing is converted at a time other than the
end of the Interest Period applicable thereto, the Borrower shall pay, upon
demand, any amounts due to the Lenders pursuant to Section 2.16;

 

(v)  any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;

 

(vi)  any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the Interest
Period in effect for such Borrowing into an ABR Borrowing;

 

(vii)  no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than a Term Loan Repayment Date occurring on or
after the first day of such Interest Period if, after giving effect to such
selection, the aggregate outstanding amount of (A) the Eurodollar Term
Borrowings comprised of Term Loans or Other Term Loans, as applicable, with
Interest Periods ending on or prior to such Term Loan Repayment Date and
(B) the ABR Term Borrowings comprised of Term Loans or Other Term
Loans, as applicable, would not be at least equal to the principal amount of
Term Borrowings to be paid on such Term Loan Repayment Date; and

 

(viii)  upon notice to the Borrower from the
Administrative Agent given at the request of the Required Lenders, after the
occurrence and during the continuance of a Default or Event of Default, no
outstanding Loan may be converted into, or continued as, a Eurodollar Loan and
any outstanding Eurodollar Borrowing shall, at the end of the

 

32

 

Interest
Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be converted to an ABR Borrowing.

 

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

 

SECTION 2.11.  Repayment of Term Borrowings.  (a) 
(i)  The Borrower shall pay to
the Administrative Agent, for the account of the Lenders, on the dates set
forth below, or if any such date is not a Business Day, on the next preceding
Business Day (each such date being a “Repayment
Date”), a principal amount of the Term Loans (as adjusted from time
to time pursuant to Sections 2.11(b), 2.12, 2.13(f) and 2.25(d)) equal to
the amount set forth below for such date, together in each case with accrued
and unpaid interest on the principal amount to be paid to but excluding the
date of such payment:

 

	
  Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2003

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2004

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2004

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2004

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  2,500,000

  	
   

  

 

33

 

	
  Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term Loan Maturity Date

  	
   

  	
  $

  	
  250,000,000

  	
   

  

 

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

 

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

 

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

 

(d)  All repayments pursuant to this
Section 2.11 shall be subject to Section 2.16, but shall otherwise be
without premium or penalty.

 

SECTION 2.12.  Prepayment. 
(a)  The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or in
part, upon at least three Business Days’ prior written or fax notice (or
telephone notice promptly confirmed by written or fax notice) in the case of
Eurodollar Loans, or written or fax notice (or telephone notice promptly
confirmed by written or fax notice) on the Business Day of prepayment in the
case of ABR Loans, to the Administrative Agent before 1:00 p.m.,
New York City time; provided,
however, that each partial
prepayment shall be in an amount that is an integral multiple of $1,000,000 and
not less than $5,000,000.

 

34

 

(b)  Optional prepayments of Term Loans shall be
allocated pro rata among the then outstanding Term Loans and Other Term Loans
and applied, first, to the scheduled installments of principal due in respect
of the Term Loans and Other Term Loans within the 12 months following such
prepayment, then pro rata against the remaining scheduled installments of
principal due in respect of the Term Loans and Other Term Loans under
Sections 2.11(a)(i) and (ii), respectively.

 

(c)  Each notice of prepayment shall specify the
prepayment date and the principal amount of each Borrowing (or portion thereof)
to be prepaid, shall be irrevocable and shall commit the Borrower to prepay
such Borrowing by the amount stated therein on the date stated therein.  All prepayments under this Section 2.12
shall be subject to Section 2.16 but otherwise without premium or
penalty.  All prepayments under this
Section 2.12 shall be accompanied by accrued and unpaid interest on the
principal amount to be prepaid to but excluding the date of payment.

 

SECTION 2.13.  Mandatory Prepayments.  (a) 
In the event of any termination of all the Revolving Credit Commitments,
the Borrower shall, on the date of such termination, repay or prepay all its
outstanding Revolving Credit Borrowings and all outstanding Swingline Loans and
replace all outstanding Letters of Credit and/or deposit an amount equal to the
L/C Exposure in cash in a cash collateral account established with the
Collateral Agent for the benefit of the Secured Parties. If as a result of any
partial reduction of the Revolving Credit Commitments the Aggregate Revolving
Credit Exposure would exceed the Total Revolving Credit Commitment after giving
effect thereto, then the Borrower shall, on the date of such reduction, repay
or prepay Revolving Credit Borrowings or Swingline Loans (or a combination
thereof) and/or cash collateralize Letters of Credit in an amount sufficient to
eliminate such excess.

 

(b)  Not later than the third Business Day
following the completion of any Asset Sale, the Borrower shall apply 100% of
the Net Cash Proceeds received with respect thereto to prepay
(i) outstanding Term Loans in accordance with Section 2.13(f) and
(ii) after the payment in full of the outstanding Term Loans, outstanding
Revolving Loans (without any reduction in Revolving Credit Commitments).

 

(c)  In the event and on each occasion that an
Equity Issuance occurs, the Borrower shall, substantially simultaneously with
(and in any event not later than the third Business Day next following) the
occurrence of such Equity Issuance, apply 100% of the Net Cash Proceeds
therefrom to prepay outstanding Term Loans in accordance with
Section 2.13(f).

 

(d)  No later than the earlier of (i) 45
days after the end of the second fiscal quarter of each fiscal year of the
Borrower (commencing with the fiscal year ending on December 31, 2003),
and (ii) the date on which the financial statements with respect to such
fiscal quarter are delivered pursuant to Section 5.04(b), the Borrower
shall prepay outstanding Term Loans in accordance with Section 2.13(f) in
an aggregate principal amount equal to (A) 75% of Excess Cash Flow for the
period of twelve consecutive months then ended if the Leverage Ratio at the end
of such period shall have been greater than or equal to 2.0 to 1.0, or
(B) 50% of Excess Cash Flow for the period of twelve consecutive months
then ended if the Leverage Ratio at the end of such period of twelve
consecutive months shall have been less than 2.0 to 1.0.

 

(e)  In the event that any Loan Party or any
subsidiary of a Loan Party shall receive Net Cash Proceeds from the incurrence
or disposition of Indebtedness (other than Indebtedness permitted pursuant
to Section 6.01), the Borrower shall, substantially simultaneously with
(and in any event not later than the third Business Day next following) the
receipt of such Net Cash

 

35

 

Proceeds by such Loan Party or
such subsidiary, apply an amount equal to 100% of such Net Cash Proceeds to
prepay outstanding Term Loans in accordance with Section 2.13(f).

 

(f)  Mandatory prepayments of outstanding Term
Loans under this Agreement shall be allocated pro rata among the then
outstanding Term Loans and Other Term Loans, and applied pro rata against the
remaining scheduled installments of principal due in respect of Term Loans and
Other Term Loans under Sections 2.11(a)(i) and (ii), respectively.

 

(g)  The Borrower shall deliver to the
Administrative Agent, at the time of each prepayment required under this
Section 2.13, (i) a certificate signed by a Financial Officer of the
Borrower setting forth in reasonable detail the calculation of the amount of
such prepayment and (ii) to the extent practicable, at least three days’
prior written notice of such prepayment. 
Each notice of prepayment shall specify the prepayment date, the Type of
each Loan being prepaid and the principal amount of each Loan (or portion
thereof) to be prepaid.  All prepayments
of Borrowings under this Section 2.13 shall be subject to
Section 2.16, but shall otherwise be without premium or penalty.

 

(h)  [Intentionally Omitted]

 

(i)  For a period of 45 consecutive days
(the “Cleanup
Period”) commencing on any day in the month of December of each
year, chosen at the option of the Borrower, the Borrower shall ensure that no
Revolving Loans or Swingline Loans are outstanding under this Agreement.  In order to comply with the previous
sentence, the Borrower shall, if necessary, prepay in full the aggregate
principal amount of all Revolving Loans and Swingline Loans outstanding at the
commencement of the Cleanup Period and shall not during the Cleanup Period
request any Revolving Loans or Swingline Loans; provided that such
limitation shall not affect the ability of the Borrower to request a Letter of
Credit during the Cleanup Period.  The
obligations of the Borrower under this paragraph are in addition to, and shall
not in any manner limit, any other obligation of the Borrower hereunder to
prepay or repay Revolving Loans and Swingline Loans.

 

SECTION 2.14.  Reserve Requirements; Change in Circumstances.  (a) 
Notwithstanding any other provision of this Agreement, if any Change in
Law shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by any Lender or the Issuing Bank (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate) or shall impose on
such Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein (other than any change to the
basis or rate of taxation applicable to any Lender), and the result of any of
the foregoing shall be to increase the cost to such Lender or the Issuing Bank
of making or maintaining any Eurodollar Loan or increase the cost to any Lender
of issuing or maintaining any Letter of Credit or purchasing or maintaining a
participation therein or to reduce the amount of any sum received or receivable
by such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender or the Issuing Bank to be
material, then the Borrower will pay to such Lender or the Issuing Bank, as the
case may be, upon demand such additional amount or amounts (without duplication
of amounts paid by the Borrower pursuant to Section 2.20) as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.

 

(b)  If any Lender or the Issuing Bank shall have
determined that any Change in Law regarding capital adequacy has or would have
the effect of reducing the rate of return on such Lender’s or the Issuing
Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s

 

36

 

holding company, if any, as a
consequence of this Agreement or the Loans made or participations in Letters of
Credit purchased by such Lender pursuant hereto or the Letters of Credit issued
by the Issuing Bank pursuant hereto to a level below that which such Lender or
the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or
the Issuing Bank’s holding company with respect to capital adequacy) by an
amount deemed by such Lender or the Issuing Bank to be material, then from time
to time the Borrower shall pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any
such reduction suffered.

 

(c)  A certificate of a Lender or the Issuing
Bank setting forth the amount or amounts necessary to compensate such Lender or
the Issuing Bank or its holding company, as applicable, as specified in
paragraph (a) or (b) above, and setting forth in reasonable detail the
basis on which such amount or amounts were calculated shall be delivered to the
Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the
Issuing Bank the amount shown as due on any such certificate delivered by it
within 20 days after its receipt of the same.

 

(d)  Failure or delay on the part of any Lender
or the Issuing Bank to demand compensation for any increased costs or reduction
in amounts received or receivable or reduction in return on capital shall not
constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such
compensation; provided that the Borrower shall not be under any obligation
to compensate any Lender or the Issuing Bank under paragraph (a) or (b)
above with respect to increased costs or reductions with respect to any period
prior to the date that is 120 days prior to such request if such Lender or
the Issuing Bank knew or could reasonably have been expected to know of the
circumstances giving rise to such increased costs or reductions and of the fact
that such circumstances would result in a claim for increased compensation by
reason of such increased costs or reductions; provided further that the
foregoing limitation shall not apply to any increased costs or reductions
arising out of the retroactive application of any Change in Law within such
120-day period.  The protection of this
Section shall be available to each Lender and the Issuing Bank regardless of
any possible contention of the invalidity or inapplicability of the Change in
Law that shall have occurred or been imposed.

 

SECTION 2.15.  Change in Legality.  (a)  Notwithstanding any
other provision of this Agreement, if any Change in Law shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then,
by written notice to the Borrower and to the Administrative Agent:

 

(i)  such Lender may declare that Eurodollar Loans will not thereafter
(for the duration of such unlawfulness) be made by such Lender hereunder (or be
continued for additional Interest Periods and ABR Loans will not thereafter
(for such duration) be converted into Eurodollar Loans), whereupon any request
for a Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar
Borrowing or to continue a Eurodollar Borrowing for an additional Interest
Period) shall, as to such Lender only, be deemed a request for an ABR Loan (or
a request to continue an ABR Loan as such or to convert a Eurodollar Loan into
an ABR Loan, as the case may be), unless such declaration shall be subsequently
withdrawn; and

 

37

 

(ii)  such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar Loans
shall be automatically converted to ABR Loans as of the effective date of such
notice as provided in paragraph (b) below.

 

In the event any Lender shall
exercise its rights under (i) or (ii) above, all payments and prepayments of
principal that would otherwise have been applied to repay the Eurodollar Loans
that would have been made by such Lender or the converted Eurodollar Loans of
such Lender shall instead be applied to repay the ABR Loans made by such Lender
in lieu of, or resulting from the conversion of, such Eurodollar Loans.

 

(b)  For purposes of this Section 2.15, a
notice to the Borrower by any Lender shall be effective as to each Eurodollar
Loan made by such Lender, if lawful, on the last day of the Interest Period
then applicable to such Eurodollar Loan; in all other cases such notice shall
be effective on the date of receipt by the Borrower.

 

SECTION 2.16.  Indemnity. 
The Borrower shall indemnify each Lender against any loss or expense
that such Lender may sustain or incur as a consequence of (a) any event,
other than a default by such Lender in the performance of its obligations hereunder,
which results in (i) such Lender receiving or being deemed to receive any
amount on account of the principal of any Eurodollar Loan prior to the end of
the Interest Period in effect therefor, (ii) the conversion of any
Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period with
respect to any Eurodollar Loan, in each case other than on the last day of the
Interest Period in effect therefor, or (iii) any Eurodollar Loan to be
made by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice
of such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause (a) being called a “Breakage Event”) or (b) any default in the making of
any payment or prepayment of any Eurodollar Loan required to be made
hereunder.  In the case of any Breakage
Event, such loss shall include an amount equal to the excess, as reasonably
determined by such Lender, of (i) its cost of obtaining funds for the
Eurodollar Loan that is the subject of such Breakage Event for the period from
the date of such Breakage Event to the last day of the Interest Period in
effect (or that would have been in effect) for such Loan over (ii) the
amount of interest likely to be realized by such Lender in redeploying the
funds released or not utilized by reason of such Breakage Event for such
period.  A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.16, and setting forth in reasonable detail the
basis on which such amount or amounts were calculated, shall be delivered to
the Borrower and shall be conclusive absent manifest error.

 

SECTION 2.17.  Pro Rata Treatment.  Except as provided below in this Section 2.17 with respect
to Swingline Loans and as required under Sections 2.13(h) and 2.15,
each Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Term Loan Commitments or the Revolving Credit Commitments and
each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such
Commitments shall have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans).  For purposes of determining the available
Revolving Credit Commitments of the Lenders at any time, each outstanding
Swingline Loan shall be deemed to have utilized the Revolving Credit
Commitments of the Lenders (including those Lenders which shall not have made
Swingline Loans) pro rata in accordance with such respective Revolving

 

38

 

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

 

SECTION 2.18.  Sharing of Setoffs.  Each Lender agrees that if it shall, through the exercise of a
right of banker’s lien, setoff or counterclaim against the Borrower or any
other Loan Party, or pursuant to a secured claim under Section 506 of
Title 11 of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, obtain payment (voluntary or involuntary) in respect of any Loan
or Loans or L/C Disbursement as a result of which the unpaid principal portion
of its Loans and participations in L/C Disbursements shall be proportionately
less than the unpaid principal portion of the Loans and participations in L/C
Disbursements of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the Loans and L/C
Exposure of such other Lender, so that the aggregate unpaid principal amount of
the Loans and L/C Exposure and participations in Loans and L/C Exposure held by
each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Loans and L/C Exposure then outstanding as the principal amount
of its Loans and L/C Exposure prior to such exercise of banker’s lien, setoff
or counterclaim or other event was to the principal amount of all Loans and L/C
Exposure outstanding prior to such exercise of banker’s lien, setoff or
counterclaim or other event; provided,
however, that if any such
purchase or purchases or adjustments shall be made pursuant to this
Section 2.18 and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to the
extent of such recovery and the purchase price or prices or adjustment restored
without interest.  The Borrower and
Holdings expressly consent to the foregoing arrangements and agree that any
Lender holding a participation in a Loan or L/C Disbursement deemed to have
been so purchased may exercise any and all rights of banker’s lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower and
Holdings to such Lender by reason thereof as fully as if such Lender had made a
Loan directly to the Borrower in the amount of such participation.

 

SECTION 2.19.  Payments. 
(a)  The Borrower shall make each
payment (including principal of or interest on any Borrowing or any L/C
Disbursement or any Fees or other amounts) hereunder and under any other Loan
Document not later than 2:00 p.m., New York City time, on the date when
due in immediately available dollars, without setoff, defense or
counterclaim.  Each such payment (other
than (i) Issuing Bank Fees, which shall be paid directly to the Issuing
Bank, and (ii) principal of and interest on Swingline Loans, which shall
be paid directly to the Swingline Lender except as otherwise provided in
Section 2.22(e)) shall be made to the Administrative Agent at its offices
at Eleven Madison Avenue, New York, NY 10010.

 

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

 

SECTION 2.20.  Taxes. 
(a)  Any and all payments by or
on account of any obligation of the Borrower or any Loan Party hereunder or
under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower or any Loan Party shall be
required to deduct any Indemnified Taxes or Other Taxes

 

39

 

from such payments, then
(i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to Indemnified Taxes
and Other Taxes payable under this Section) the Administrative Agent or such
Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower or such Loan
Party shall make such deductions and (iii) the Borrower or such Loan Party
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

 

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

 

(c)  The Borrower shall indemnify the
Administrative Agent and each Lender, within 15 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent or such Lender, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrower or any Loan
Party hereunder or under any other Loan Document (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate
as to the amount of such payment or liability delivered to the Borrower by a
Lender, or by the Administrative Agent on its behalf or on behalf of a Lender,
shall be conclusive absent manifest error.

 

(d)  If the Borrower determines in good faith
that a reasonable basis exists for contesting a Tax, the relevant Lender (or
participant), or the Administrative Agent, as applicable, shall cooperate with
the Borrower in challenging such Tax at the Borrower’s expense if requested by
the Borrower.  If a Lender (or
participant) or the Administrative Agent receives a refund (including pursuant
to a claim for refund made pursuant to the preceding sentence) in respect of
any Indemnified Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts pursuant
to this Section 2.20, it shall within 30 days from the date of such
receipt pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section 2.20 with respect to the Indemnified Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of such Lender (or
participant) or the Administrative Agent (together with any interest paid by
the relevant Governmental Authority with respect to such refund); provided,
however, that the Borrower, upon the request of such Lender (or
participant) or the Administrative Agent, agrees to repay the amount paid over
to the Borrower (plus penalties, interest or other charges) to such Lender (or
participant) or the Administrative Agent in the event such Lender (or
participant) or the Administrative Agent is required to repay such refund to
such Governmental Authority.

 

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

 

(f)  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is located, or pursuant to any treaty to
which such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to

 

40

 

the Borrower (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law,
such properly completed and executed documentation prescribed by applicable law
or reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate and shall deliver to the Borrower and
the Administrative Agent two further copies of any such form or certification
(or any applicable successor form) on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower.  Each Lender that shall become
a participant or a Lender pursuant to Section 9.04 shall, upon the
effectiveness of the related transfer, be required to provide all the forms and
statements required pursuant to this Section 2.20(f) provided that in the
case of a participant such participant shall furnish all such required forms
and statements to the Lender from which the related participation shall have
been purchased.

 

SECTION 2.21.  Assignment of Commitments Under Certain Circumstances; Duty
to Mitigate.  (a)  In the event (i) any Lender or the
Issuing Bank delivers a certificate requesting compensation pursuant to
Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.15, (iii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank pursuant to
Section 2.20 or (iv) any Lender refuses to consent to a proposed
amendment, waiver, consent or other modification of this Agreement or any other
Loan Document which has been approved by the Required Lenders and which
additionally requires the consent of such Lender for approval pursuant to
Section 9.08(b), the Borrower may, at its sole expense and effort, upon
notice to such Lender or the Issuing Bank and the Administrative Agent, require
such Lender or the Issuing Bank to transfer and assign, without recourse (in
accordance with and subject to the restrictions contained in
Section 9.04), all of its interests, rights and obligations under this
Agreement to an assignee that shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (x) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority having
jurisdiction, (y) the Borrower shall have received the prior written
consent of the Administrative Agent (and, if a Revolving Credit Commitment is
being assigned, of the Issuing Bank and the Swingline Lender), which consent
shall not unreasonably be withheld, and (z) the Borrower or such assignee
shall have paid to the affected Lender or the Issuing Bank in immediately
available funds an amount equal to the sum of the principal of and interest
accrued to the date of such payment on the outstanding Loans or L/C
Disbursements of such Lender or the Issuing Bank, respectively, plus all Fees
and other amounts accrued for the account of such Lender or the Issuing Bank
hereunder (including any amounts under Section 2.14 and
Section 2.16); provided further that, if prior to any such transfer and
assignment the circumstances or event that resulted in such Lender’s or the Issuing
Bank’s claim for compensation under Section 2.14 or notice under
Section 2.15 or the amounts paid pursuant to Section 2.20, as the
case may be, cease to cause such Lender or the Issuing Bank to suffer increased
costs or reductions in amounts received or receivable or reduction in return on
capital, or cease to have the consequences specified in Section 2.15, or
cease to result in amounts being payable under Section 2.20, as the case
may be (including as a result of any action taken by such Lender or the Issuing
Bank pursuant to paragraph (b) below), or if such Lender or the Issuing
Bank shall waive its right to claim further compensation under
Section 2.14 in respect of such circumstances or event or shall withdraw
its notice under Section 2.15 or shall waive its right to further payments
under Section 2.20 in respect of such circumstances or event or shall
consent to the proposed amendment, waiver, consent or other modification, as
the case may be, then such Lender or the Issuing Bank shall not thereafter be
required to make any such transfer and assignment hereunder.

 

41

 

(b)  If (i) any Lender or the Issuing Bank
shall request compensation under Section 2.14, (ii) any Lender or the
Issuing Bank delivers a notice described in Section 2.15 or (iii) the
Borrower is required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the Issuing
Bank, pursuant to Section 2.20, then such Lender or the Issuing Bank shall
use reasonable efforts (which shall not require such Lender or the Issuing Bank
to incur an unreimbursed loss or unreimbursed cost or expense or otherwise take
any action inconsistent with its internal policies or legal or regulatory
restrictions or suffer any disadvantage or burden deemed by it to be
significant) (x) to file any certificate or document reasonably requested
in writing by the Borrower or (y) to assign its rights and delegate and
transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.14 or enable it to withdraw its notice
pursuant to Section 2.15 or would reduce amounts payable pursuant to
Section 2.20, as the case may be, in the future.  The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender or the Issuing Bank in connection with any such
filing or assignment, delegation and transfer.

 

SECTION 2.22.  Swingline Loans.  (a)  Swingline Commitment.  Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, the Swingline
Lender agrees to make loans to the Borrower at any time and from time to time
on and after the Closing Date and until the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitments in
accordance with the terms hereof, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of all
Swingline Loans exceeding $10,000,000 in the aggregate or (ii) the
Aggregate Revolving Credit Exposure, after giving effect to any Swingline Loan,
exceeding the Total Revolving Credit Commitment.  Each Swingline Loan shall be in a principal amount that is an
integral multiple of $250,000.  The
Swingline Commitment may be terminated or reduced from time to time as provided
herein.  Within the foregoing limits,
the Borrower may borrow, pay or prepay and reborrow Swingline Loans hereunder,
subject to the terms, conditions and limitations set forth herein.

 

(b)  Swingline Loans.  The Borrower shall notify the Administrative Agent by fax, or by
telephone (confirmed by fax), not later than 12:00 noon, New York
City time, on the day of a proposed Swingline Loan.  Such notice shall be delivered on a Business Day, shall be
irrevocable and shall refer to this Agreement and shall specify the requested
date (which shall be a Business Day) and amount of such Swingline Loan.  The Administrative Agent will promptly advise
the Swingline Lender of any notice received from the Borrower pursuant to this
paragraph (b).  The Swingline
Lender shall make each Swingline Loan available to the Borrower by means of a
credit to an account in the name of the Borrower as designated by the Borrower
in such notice by 3:00 p.m., New York City time, on the date such
Swingline Loan is so requested.

 

(c)  Prepayment.  The Borrower shall have the right at any time and from time to
time to prepay any Swingline Loan, in whole or in part, upon giving written or
fax notice (or telephone notice promptly confirmed by written, or fax notice)
to the Swingline Lender and to the Administrative Agent before 2:00 p.m.,
New York City time, on the date of prepayment at the Swingline Lender’s
address for notices specified on Schedule 2.01.  All principal payments of Swingline Loans shall be accompanied by
accrued interest on the principal amount being repaid to the date of payment.

 

(d)  Interest. 
Each Swingline Loan shall be an ABR Loan and, subject to the provisions
of Section 2.07, shall bear interest as provided in Section 2.06(a).

 

42

 

(e)  Participations.  The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time,
on any Business Day require the Revolving Credit Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans
outstanding.  Such notice shall specify the
aggregate amount of Swingline Loans in which Revolving Credit Lenders will
participate.  The Administrative Agent
will, promptly upon receipt of such notice, give notice to each Revolving
Credit Lender, specifying in such notice such Lender’s Pro Rata Percentage of
such Swingline Loan or Loans.  In
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely
and unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such
Revolving Credit Lender’s Pro Rata Percentage of such Swingline Loan or
Loans.  Each Revolving Credit Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.  Each Revolving Credit
Lender shall comply with its obligation under this paragraph by wire transfer
of immediately available funds, in the same manner as provided in
Section 2.02(c) with respect to Loans made by such Lender (and
Section 2.02(c) shall apply, mutatis mutandis, to the payment obligations
of the Lenders) and the Administrative Agent shall promptly pay to the
Swingline Lender the amounts so received by it from the Lenders.  The Administrative Agent shall notify the
Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender
from the Borrower (or other party on behalf of the Borrower) in respect of a
Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale
of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to the Lenders that shall have made their payments
pursuant to this paragraph and to the Swingline Lender, as their interests may
appear. The purchase of participations in a Swingline Loan pursuant to this
paragraph shall not relieve the Borrower (or other party liable for obligations
of the Borrower) of any default in the payment thereof.

 

SECTION 2.23.  Letters of Credit.  (a)  General. 
The Borrower may request the issuance of a Letter of Credit for its own
account or for the account of any of its wholly owned Subsidiaries (in which
case the Borrower and such wholly owned Subsidiary shall be co-applicants with
respect to such Letter of Credit), in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
while the Revolving Credit Commitments remain in effect.  This Section shall not be construed to
impose an obligation upon the Issuing Bank to issue any Letter of Credit that
is inconsistent with the terms and conditions of this Agreement.

 

(b)  Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions.  In order
to request the issuance of a Letter of Credit (or to amend, renew or extend an
existing Letter of Credit), the Borrower shall hand deliver or fax to the
Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) below), the amount of such Letter
of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit.  A Letter of Credit shall be

 

43

 

issued, amended, renewed or
extended only if, and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrower shall be deemed to represent and warrant that,
after giving effect to such issuance, amendment, renewal or extension
(i) the L/C Exposure shall not exceed $30,000,000 and (ii) the
Aggregate Revolving Credit Exposure shall not exceed the Total Revolving Credit
Commitment.

 

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

 

(d)  Participations.  By the issuance of a Letter of Credit and without any further
action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby
grants to each Revolving Credit Lender, and each such Lender hereby acquires
from the Issuing Bank, a participation in such Letter of Credit equal to such
Lender’s Pro Rata Percentage of the aggregate amount available to be drawn under
such Letter of Credit, effective upon the issuance of such Letter of
Credit.  In consideration and in
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Lender’s Pro Rata Percentage of each L/C Disbursement
made by the Issuing Bank and not reimbursed by the Borrower (or, if applicable,
another party pursuant to its obligations under any other Loan Document)
forthwith on the date due as provided in Section 2.02(f).  Each Revolving Credit Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.

 

(e)  Reimbursement.  If the Issuing Bank shall make any L/C Disbursement in respect of
a Letter of Credit, the Borrower shall pay to the Issuing Bank an amount equal
to such L/C Disbursement on the same Business Day on which the Borrower shall
have received notice from the Issuing Bank that payment of such draft will be
made, or, if the Borrower shall have received such notice later than
1:00 p.m., New York City time, on any Business Day, not later than
1:00 p.m., New York City time, on the immediately following Business
Day; provided
that to satisfy its reimbursement obligation under this paragraph (e), the
Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 or 2.22 an ABR Revolving Loan or Swingline
Loan to be made by the Revolving Credit Lenders or the Swingline Lender,
respectively, in the aggregate amount of any such L/C Disbursement.

 

(f)  Obligations Absolute.  The Borrower’s obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:

 

(i)  any lack of validity or enforceability of any Letter of Credit or
any Loan Document, or any term or provision therein;

 

44

 

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

 

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

 

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

 

(v)  payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms
of such Letter of Credit; and

 

(vi)  any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other person or any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of the Borrower’s obligations hereunder.

 

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

 

(g)  Disbursement Procedures.  The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit.  The
Issuing Bank shall as promptly as possible give telephonic notification,
confirmed by fax, to the Administrative Agent and the Borrower of such demand
for payment and whether the Issuing Bank has made or will make an L/C
Disbursement thereunder; provided that any failure

 

45

 

to give or delay in giving such
notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Revolving Credit Lenders with respect to any such L/C
Disbursement.  The Administrative Agent
shall promptly give each Revolving Credit Lender notice thereof.

 

(h)  Interim Interest.  If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, unless the Borrower shall reimburse
such L/C Disbursement in full on such date, the unpaid amount thereof shall
bear interest for the account of the Issuing Bank, for each day from and
including the date of such L/C Disbursement, to but excluding the earlier of
the date of payment by the Borrower or the date on which interest shall
commence to accrue thereon as provided in Section 2.02(f), at the rate per
annum that would apply to such amount if such amount were an ABR Revolving
Loan.

 

(i)  Resignation or Removal of the Issuing Bank.  The Issuing Bank may resign at any time by
giving 30 days’ prior written notice to the Administrative Agent, the Lenders
and the Borrower, and may be removed at any time by the Borrower by notice to
the Issuing Bank, the Administrative Agent and the Lenders.  Subject to the next succeeding paragraph,
upon the acceptance of any appointment as the Issuing Bank hereunder by a
Lender that shall agree to serve as successor Issuing Bank, such successor
shall succeed to and become vested with all the interests, rights and
obligations of the retiring Issuing Bank and the retiring Issuing Bank shall be
discharged from its obligations to issue additional Letters of Credit
hereunder.  At the time such removal or
resignation shall become effective, the Borrower shall pay all accrued and
unpaid fees pursuant to Section 2.05(c)(ii).  The acceptance of any appointment as the Issuing Bank hereunder
by a successor Lender shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Borrower and the Administrative Agent,
and, from and after the effective date of such agreement, (i) such
successor Lender shall have all the rights and obligations of the previous Issuing
Bank under this Agreement and the other Loan Documents and (ii) references
herein and in the other Loan Documents to the term “Issuing Bank” shall be
deemed to refer to such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall require.  After the resignation or removal of the
Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement and the other Loan Documents with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.

 

(j)  Cash Collateralization.  If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date.  Such deposit
shall be held by the Collateral Agent as collateral for the payment and
performance of the Obligations.  The
Collateral Agent shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such account. 
Other than any interest earned on the investment of such deposits in
Permitted Investments, which investments shall be made at the option and sole
discretion of the Collateral Agent, such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for
which it has not been reimbursed, (ii) be held for the satisfaction of the
reimbursement obligations of the Borrower for the L/C Exposure at such time and
(iii) if the maturity of the

 

46

 

Loans has been accelerated (but
subject to the consent of Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit), be applied to satisfy the
Obligations.  If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

 

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

 

SECTION 2.24.  Increase in Revolving Credit Commitments.  (a) 
The Borrower may, by written notice to the Administrative Agent from
time to time, request that the Total Revolving Credit Commitment be increased
by an amount not to exceed the Incremental Revolving Facility Amount at such
time.  Upon the approval of such request
by the Administrative Agent (which approval shall not be unreasonably
withheld), the Administrative Agent shall deliver a copy thereof to each
Revolving Credit Lender.  Such notice
shall set forth the amount of the requested increase in the Total Revolving
Credit Commitment (which shall be in minimum increments of $5,000,000 and a
minimum amount of $10,000,000 or equal to the remaining Incremental Revolving
Facility Amount) and the date on which such increase is requested to become
effective (which shall be not less than 10 Business Days nor more than 60 days
after the date of such notice and which, in any event, must be on or prior to
the Revolving Credit Maturity Date), and shall offer each Revolving Credit
Lender the opportunity to increase its Revolving Credit Commitment by its Pro
Rata Percentage of the proposed increased amount.  Each Revolving Credit Lender shall, by notice to the Borrower and
the Administrative Agent given not more than 10 days after the date of the
Administrative Agent’s notice, either agree to increase its Revolving Credit
Commitment by all or a portion of the offered amount (each Revolving Credit
Lender so agreeing being an “Increasing
Revolving Lender”) or decline to increase its Revolving Credit
Commitment (and any Revolving Credit Lender that does not deliver such a notice
within such period of 10 days shall be deemed to have declined to increase
its Revolving Credit Commitment) (each Revolving Credit Lender so declining or
being deemed to have declined being a “Non-Increasing
Revolving Lender”).  In the
event that, on the 10th day after the Administrative Agent shall have
delivered a notice pursuant to the second sentence of this paragraph, the
Revolving Credit Lenders shall have agreed pursuant to the preceding sentence
to increase their Revolving Credit Commitments by an aggregate amount less than
the increase in the Total Revolving Credit Commitment requested by the
Borrower, the Borrower may arrange for one or more banks or other entities (any
such bank or other entity referred to in this clause (a) being called an “Augmenting Revolving Lender”), which may
include any Lender, to extend Revolving Credit Commitments or increase their
existing Revolving Credit Commitments in an aggregate amount equal to the
unsubscribed amount; provided
that each Augmenting Revolving Lender, if not already a Revolving Credit Lender
hereunder, shall be subject to the approval of the Administrative Agent, the
Swingline Lender and the Issuing Bank (which approvals shall not be
unreasonably withheld) and the Borrower and each Augmenting Revolving Lender
shall execute all such documentation as the Administrative Agent shall
reasonably specify to evidence its

 

47

 

Revolving Credit Commitment
and/or its status as a Revolving Credit Lender hereunder.  Any increase in the Total Revolving Credit
Commitment may be made in an amount which is less than the increase requested
by the Borrower if the Borrower is unable to arrange for, or chooses not to
arrange for, Augmenting Revolving Lenders.

 

(b)  Each of the parties hereto hereby agrees
that the Administrative Agent may take any and all actions as may be reasonably
necessary to ensure that, after giving effect to any increase in the Total
Revolving Credit Commitment pursuant to this Section 2.24, the outstanding
Revolving Loans (if any) are held by the Revolving Credit Lenders in accordance
with their new Pro Rata Percentages.  This
may be accomplished at the discretion of the Administrative Agent (i) by
requiring the outstanding Revolving Loans to be prepaid with the proceeds of a
new Revolving Credit Borrowing, (ii) by causing Non-Increasing Revolving
Lenders to assign portions of their outstanding Revolving Loans to Increasing
Revolving Lenders and Augmenting Revolving Lenders,  or (iii) by any combination of the foregoing.  Any prepayment or assignment described in
this paragraph (b) shall be subject to Section 2.16, but otherwise
without premium or penalty.

 

(c)  Notwithstanding the foregoing, no increase
in the Total Revolving Credit Commitment (or in the Revolving Credit Commitment
of any Revolving Credit Lender) or addition of a new Revolving Credit Lender
shall become effective under this Section 2.24 unless, (i) on the
date of such increase, the conditions set forth in paragraphs (b) and (c)
of Section 4.01 shall be satisfied and the Administrative Agent shall have
received a certificate to that effect dated such date and executed by a
Financial Officer of the Borrower, and (ii) the Administrative Agent shall
have received (with sufficient copies for each of the Revolving Credit Lenders)
legal opinions, board resolutions and an officer’s certificate consistent with
those delivered on the Restatement Date under clauses (a)(i), (a)(ii),
(c)(ii)(B) and (d) of Section 4.02.

 

SECTION 2.25.  Increase in Term Loan Commitments.  (a) 
The Borrower may, by written notice to the Administrative Agent from
time to time, request Incremental Term Loan Commitments in an amount not to
exceed the Incremental Term Loan Amount from one or more Incremental Term
Lenders, which may include any existing Lender; provided that each Incremental Term Lender, if not already a
Lender hereunder, shall be subject to the approval of the Administrative Agent
(which approval shall not be unreasonably withheld).  Such notice shall set forth (i) the amount of the
Incremental Term Loan Commitments being requested (which shall be in minimum
increments of $5,000,000 and a minimum amount of $10,000,000 or equal to the
remaining Incremental Term Loan Amount), (ii) the date on which such
Incremental Term Loan Commitments are requested to become effective (which
shall not be less than 10 Business Days nor more than 60 days after
the date of such notice), and (iii) whether such Incremental Term Loan
Commitments are commitments to make additional Term Loans or commitments to
make term loans with terms different from the Term Loans (“Other Term Loans”).

 

(b)  The Borrower and each Incremental Term
Lender shall execute and deliver to the Administrative Agent an Incremental
Term Loan Assumption Agreement and such other documentation as the
Administrative Agent shall reasonably specify to evidence the Incremental Term
Loan Commitment of such Incremental Term Lender.  Each Incremental Term Loan Assumption Agreement shall specify the
terms of the Incremental Term Loans to be made thereunder; provided that, without the
prior written consent of the Required Lenders, (i) the interest rate
spreads in respect of any Other Term Loans shall not exceed by more than 1/2 of
1% the Applicable Percentage for the Term Loans, (ii) the final maturity
date of any Other Term Loans shall be no earlier than the Term Loan Maturity
Date and (iii) the average life to maturity

 

48

 

of any Other Term Loans shall
be no shorter than the average life to maturity of the Term Loans.  The Administrative Agent shall promptly
notify each Lender as to the effectiveness of each Incremental Term Loan
Assumption Agreement.  Each of the
parties hereto hereby agrees that, upon the effectiveness of any Incremental
Term Loan Assumption Agreement, this Agreement shall be deemed amended to the
extent (but only to the extent) necessary to reflect the existence and terms of
the Incremental Term Loan Commitment evidenced thereby.

 

(c)  Notwithstanding the foregoing, no
Incremental Term Loan Commitment shall become effective under this
Section 2.25 unless (i) on the date of such effectiveness, the
conditions set forth in paragraphs (b) and (c) of Section 4.01 shall
be satisfied and the Administrative Agent shall have received a certificate to
that effect dated such date and executed by a Financial Officer of the
Borrower, and (ii) the Administrative Agent shall have received (with
sufficient copies for each of the Incremental Term Lenders) legal opinions,
board resolutions and an officer’s certificate consistent with those delivered
on the Restatement Date under clauses (a)(i), (a)(ii), (c)(ii)(B) and
(d)  of Section 4.02.

 

(d)  Each of the parties hereto hereby agrees
that the Administrative Agent may take any and all action as may be reasonably
necessary to ensure that all Incremental Term Loans (other than Other Term
Loans), when originally made, are included in each Borrowing of outstanding
Term Loans, as the case may be, on a pro rata basis.  This may be accomplished at the discretion of the Administrative
Agent by requiring each outstanding Eurodollar Term Borrowing to be converted
into an ABR Term Borrowing on the date of each Incremental Term Loan, or by
allocating a portion of each Incremental Term Loan to each outstanding
Eurodollar Term Borrowing on a pro rata basis, even though as a result thereof
such Incremental Term Loan may effectively have a shorter Interest Period than
the Term Loans included in the Borrowing of which they are a part (and
notwithstanding any other provision of this Agreement that would prohibit such
an initial Interest Period).  Any
conversion of Eurodollar Term Loans to ABR Term Loans required by the preceding
sentence shall be subject to Section 2.16.  If any Incremental Term Loan is to be allocated to an existing
Interest Period for a Eurodollar Term Borrowing then, subject to
Section 2.07, the interest rate applicable to such Incremental Term Loan
for the remainder of such Interest Period shall equal the Adjusted LIBO Rate
for a period approximately equal to the remainder of such Interest Period (as
determined by the Administrative Agent two Business Days before the date such
Incremental Term Loan is made) plus the Applicable Percentage.  In addition, to the extent any Incremental
Term Loans are not Other Term Loans, the scheduled amortization payments under
Section 2.11(a)(i) required to be made after the making of such
Incremental Term Loans shall be ratably increased by the aggregate principal
amount of such Incremental Term Loans.

 

ARTICLE
III

 

Representations and Warranties

 

Each of
Holdings and the Borrower, with respect to itself and its Subsidiaries,
represents and warrants to the Administrative Agent, the Collateral Agent, the
Issuing Bank and each of the Lenders that:

 

SECTION 3.01.  Organization; Powers.  Each of Holdings, the Borrower and the
Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, (c) is

 

49

 

qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required, except where the failure so to qualify could not reasonably be
expected to result in a Material Adverse Effect, and (d) has the power and
authority to execute, deliver and perform its obligations under each of the
Loan Documents and each other agreement or instrument contemplated hereby to
which it is or will be a party and, in the case of the Borrower, to borrow
hereunder.

 

SECTION 3.02.  Authorization.  The execution, delivery and performance by the Loan Parties of
the Loan Documents to which each is or will be a party and the consummation by
the Loan Parties of the Amendment Transactions (including the borrowings by the
Borrower hereunder) (a) have been duly authorized by all requisite
corporate and, if required, stockholder action and (b) will not
(i) violate (A) any provision of law, statute, rule or regulation in
any material respect, or of the certificate or articles of incorporation or
other constitutive documents or by-laws of Holdings, the Borrower or any
Subsidiary, (B) any order of any Governmental Authority or (C) any
provision of any indenture, agreement or other instrument to which Holdings,
the Borrower or any Subsidiary is a party or by which any of them or any of
their property is or may be bound in any material respect, (ii) or give
rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, agreement or other
instrument or (iii) result in the creation or imposition of any Lien upon
or with respect to any property or assets now owned or hereafter acquired by
Holdings, the Borrower or any Subsidiary (other than any Lien created hereunder
or under the Security Documents).

 

SECTION 3.03.  Enforceability.  This Agreement has been duly executed and delivered by Holdings
and the Borrower and constitutes, and each other Loan Document when executed
and delivered by the each Loan Party thereto will constitute, a legal, valid
and binding obligation of such Loan Party enforceable against such Loan Party
in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, moratorium and other similar laws relating to or
affecting creditors’ rights generally and to general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.

 

SECTION 3.04.  Governmental Approvals.  No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority
is or will be required in connection with the Amendment Transactions, except
for such as have been made or obtained and are in full force and effect, and except
where the failure to obtain such consent or approval to make such registration
or filing or other action, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.

 

SECTION 3.05.  Financial Statements.  The Borrower has heretofore furnished to the
Lenders its consolidated balance sheets and statements of income, stockholder’s
equity and cash flows (i) as of and for the fiscal year ended
December 31, 2002, audited by and accompanied by the opinion of
Deloitte & Touche LLP, independent public accountants, and
(ii) as of and for the fiscal quarter and the portion of the fiscal year
ended June 30, 2003, certified by its chief financial officer.  Such financial statements present fairly the
financial condition and results of operations and cash flows of the Borrower
and its consolidated Subsidiaries as of such dates and for such periods.  Such balance sheets and the notes thereto
disclose all material liabilities, direct or contingent, of the Borrower and
its consolidated Subsidiaries as of the dates thereof.  Such financial statements were prepared in
accordance with GAAP applied on a consistent basis.

 

50

 

SECTION 3.06.  No Material Adverse Change.  No event, change or condition has occurred
that has had, or could reasonably be expected to have, a material adverse
effect on the business, assets, operations or condition, financial or
otherwise, of Holdings, the Borrower and the Subsidiaries, taken as a whole,
since December 31, 2002.

 

SECTION 3.07.  Title to Properties.  Each of Holdings, the Borrower and the
Subsidiaries has good and marketable title to, or valid leasehold interests in,
all its material properties and assets necessary for the conduct of its
business, except for minor defects in title that do not interfere in any
material respect with its ability to conduct its business as currently
conducted or to utilize such properties and assets for their intended
purposes.  All such material properties
and assets are free and clear of Liens, other than Liens expressly permitted by
Section 6.02.

 

SECTION 3.08.  Subsidiaries; Designated Real Estate Credit Support.  

(a)  Schedule 3.08(a) sets forth as
of the Restatement Date a list of all subsidiaries (other than Designated Real
Estate Asset Subsidiaries) of Holdings, the percentage ownership interest of
Holdings, the Borrower or other Subsidiaries therein and whether such
Subsidiary is an Inactive Subsidiary. 
The shares of capital stock or other ownership interests so indicated on
Schedule 3.08(a) are fully paid and non-assessable and are owned by
Holdings or the Borrower, directly or indirectly, free and clear of all Liens
(other than Liens created under the Security Documents).

 

(b)  Schedule 3.08(b) sets forth, as of the
Restatement Date, a true and correct description of all Designated Real Estate
Credit Support.

 

SECTION 3.09.  Litigation; Compliance with Laws.  (a) 
Except as set forth on Schedule 3.09, there are not any actions,
suits or proceedings at law or in equity or by or before any Governmental
Authority now pending or, to the knowledge of Holdings or the Borrower,
threatened against or affecting Holdings or the Borrower or any Subsidiary or
any business, property or rights of any such person (i) that involve any
Loan Document or the Amendment Transactions or (ii) that could reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect.

 

(b)  Since the Restatement Date, there has been
no change in the status of the matters disclosed on Schedule 3.09 that,
individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.

 

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

 

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

 

(b)  None of Holdings, the Borrower or any of the
Subsidiaries is in default in any manner under any provision of any indenture
or other agreement or instrument evidencing Material Indebtedness, or any other
material agreement or instrument to which it is a party or by

 

51

 

which it or any of its
properties or assets are or may be bound, where such default could reasonably
be expected to result in a Material Adverse Effect.

 

SECTION 3.11.  Federal Reserve Regulations.  (a) 
None of Holdings, the Borrower or any of the Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock.

 

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

 

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

 

SECTION 3.13.  Use of Proceeds.  The Borrower will (a) use the proceeds of the Term Loans
only for the purposes specified in the preamble to this Agreement, (b) use
the proceeds of the Revolving Loans and Swingline Loans and will request the
issuance of Letters of Credit only for working capital and other general
corporate purposes and (c) use the proceeds of Incremental Term Loans only
as set forth in the applicable Incremental Term Loan Assumption Agreement.

 

SECTION 3.14.  Tax Returns. 
Each of the Holdings, the Borrower and the Subsidiaries has filed or
caused to be filed all Federal and all material state, local and foreign tax
returns or materials required to have been filed by it and has paid or caused
to be paid all material taxes due and payable by it and all assessments received
by it, except taxes that are being contested in good faith by appropriate
proceedings and for which Holdings, the Borrower or such Subsidiary, as
applicable, shall have set aside on its books adequate reserves.

 

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

 

SECTION 3.16.  Employee Benefit Plans.  (a) 
Each of the Borrower and its ERISA Affiliates is in compliance in all
material respects with the applicable provisions of ERISA and the Code and the
regulations and published interpretations thereunder except for such non-compliance
as could not reasonably be expected to result in a Material Adverse
Effect.  No ERISA Event has occurred or
is reasonably expected to occur that, when taken together with all other such
ERISA Events, could reasonably be expected to result in a Material Adverse
Effect.  The present value of all
benefit liabilities under all underfunded Plans (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the last

 

52

 

annual valuation dates
applicable thereto, exceed the fair market value of the assets of all such
underfunded Plans by an amount that could reasonably be expected to result in a
Material Adverse Effect.

 

(b)  Each Foreign Pension Plan is in compliance
in all material respects with all requirements of law applicable thereto and
the respective requirements of the governing documents for such plan except to
the extent such non-compliance could not reasonably be expected to result in a
Material Adverse Effect.  With respect
to each Foreign Pension Plan, none of the Holdings, its Subsidiaries or any of
its directors, officers, employees or agents has engaged in a transaction that
subject Holdings or any of its Subsidiaries, directly or indirectly, to a tax
or civil penalty that could reasonably be expected to have a Material Adverse
Effect.  With respect to each Foreign
Pension Plan, reserves have been established in the financial statements
furnished to Lenders in respect of any unfunded liabilities in accordance with
applicable law and prudent business practice or, where required, in accordance
with ordinary accounting practices in the jurisdiction in which such Foreign
Pension Plan is maintained,  except for
such failure as could not reasonably be expected to result in a Material
Adverse Effect.  The aggregate unfunded
liabilities, with respect to such Foreign Pension Plans could not reasonably be
expected to result in a Material Adverse Effect.  There are no actions, suits or claims (other than routine claims
for benefits) pending or threatened against the Holdings or any of its
Affiliates with respect to any Foreign Pension Plan which could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect.

 

SECTION 3.17.  Environmental Matters.  Except with respect to any matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, none of Holdings, the Borrower or any of the
Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.

 

SECTION 3.18.  Insurance. 
Schedule 3.18 sets forth a true, complete and correct description
of all insurance maintained by the Borrower or by the Borrower for its
Subsidiaries as of the Restatement Date. 
As of such date, such insurance is in full force and effect and all
premiums have been duly paid.  The
Borrower and its Subsidiaries have insurance in such amounts and covering such
risks and liabilities as are in accordance with normal industry practice.

 

SECTION 3.19.  Labor Matters.  As of the Restatement Date, there are no material strikes,
lockouts or slowdowns against Holdings, the Borrower or any Subsidiary pending
or, to the knowledge of Holdings or the Borrower, threatened.  The hours worked by and payments made to
employees of Holdings, the Borrower and the Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Federal, state,
local or foreign law dealing with such matters, except to the extent that such
violations, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.  All payments
due from Holdings, the Borrower or any Subsidiary, or for which any claim may
be made against Holdings, the Borrower or any Subsidiary, on account of wages
and employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of Holdings, the Borrower or such
Subsidiary, except to the extent that non-payment or non-accrual could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.  The consummation of the Amendment
Transactions will not give rise to any right of termination or right of
renegotiation on

 

53

 

the part of any union under any
collective bargaining agreement to which Holdings, the Borrower or any
Subsidiary is bound.

 

SECTION 3.20.  Solvency. 
Immediately after the consummation of the Amendment Transactions to
occur on the Restatement Date and immediately following the making of each Loan
and after giving effect to the application of the proceeds of each Loan,
(a) the fair value of the assets of Holdings and its subsidiaries, on a
consolidated basis, and the assets of the Borrower and its subsidiaries, on a
consolidated basis, at a fair valuation, will exceed their debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of Holdings and its subsidiaries, on a consolidated
basis, will be greater than the amount that will be required to pay the
probable liability of their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute
and matured; (c) Holdings and its subsidiaries, on a consolidated basis,
will be able to pay their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and
(d) Holdings and its subsidiaries, on a consolidated basis, will not have
unreasonably small capital with which to conduct the business in which they are
engaged as such business is now conducted and is proposed to be conducted
following the Restatement Date.

 

SECTION 3.21.  Senior Indebtedness.  The Obligations constitute “Designated
Senior Indebtedness” under and as defined in the Senior Subordinated Note
Indenture.

 

ARTICLE IV

 

Conditions of Lending

 

SECTION 4.01.  All Credit Events.  The obligations of the Lenders (including the Swingline Lender)
to make Loans and of the Issuing Bank to issue, amend, extend or renew any
Letter of Credit (each such event being called a “Credit Event”) are subject to the satisfaction of the
following conditions on the date of each Credit Event:

 

(a) 
The Administrative Agent shall have received a notice of such Borrowing
as required by Section 2.03 (or such notice shall have been deemed given
in accordance with Section 2.03) or, in the case of the issuance,
amendment, extension or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required by
Section 2.23(b) or, in the case of the Borrowing of a Swingline Loan, the
Swingline Lender and the Administrative Agent shall have received a notice
requesting such Swingline Loan as required by Section 2.22(b).

 

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

 

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

 

Each Credit
Event shall be deemed to constitute a representation and warranty by the
Borrower and Holdings on the date of such Credit Event as to the matters
specified in paragraphs (b) and (c) of this Section 4.01.

 

54

 

SECTION 4.02.  Restatement Date.  On the Restatement
Date:

 

(a) 
The Administrative Agent shall have received, on behalf of itself, the
Lenders and the Issuing Bank, a favorable written opinion of
(i) Dean E. Miller, Esq., Assistant General Counsel- Corporate
of the Borrower, substantially to the effect set forth in Exhibit E-1, and
(ii) Simpson Thacher & Bartlett LLP, counsel for Holdings and the
Borrower, substantially to the effect set forth in Exhibit E-2, in each
case (A) dated the Restatement Date, (B) addressed to the Issuing
Bank, the Administrative Agent and the Lenders, and (C) covering such
other matters relating to the Loan Documents and the Amendment Transactions as
the Administrative Agent shall reasonably request, and Holdings and the
Borrower hereby request such counsel to deliver such opinions.

 

(b) 
All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be reasonably
satisfactory to the Lenders, to the Issuing Bank and to the Administrative
Agent and, to the extent requested, the Lenders shall have received all
documentation and other information required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including the USA Patriot Act.

 

(c) 
The Administrative Agent shall have received a certificate, dated the
Restatement Date and signed by the Secretary or Assistant Secretary of each of
Holdings and the Borrower, certifying that, except as set forth on any schedule
attached thereto, (i) the certificate or articles of incorporation of each
Loan Party previously delivered on the First Restatement Date (or such later date
on which such person became a Loan Party) have not been amended since the date
of the last amendment thereto shown on the certificate of good standing so
furnished and (ii) the by-laws of each Loan Party as in effect and
delivered to the Administrative Agent on the First Restatement Date (or such
later date on which such person became a Loan Party) have not been amended.

 

(d) 
The Administrative Agent shall have received a certificate, dated the
Restatement Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and
(c) of Section 4.01.

 

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

 

(f) 
The Amendment Agreement shall have become effective in accordance with
its terms.

 

(g) 
Each document (including each Uniform Commercial Code financing
statement) required by law or reasonably requested by the Administrative Agent
to be filed, registered or recorded in order to create in favor of the Collateral
Agent for the benefit of the Secured Parties a valid, legal and perfected
first-priority (except to the extent otherwise provided therein) security
interest in and lien on the Collateral (subject to any Lien expressly permitted
by Section 6.02) described in the Collateral Agreement shall have been
delivered to the Collateral Agent.

 

55

 

(h) 
The Lenders shall have received the audited and unaudited financial
statements referred to in Section 3.05.

 

(i) 
The Existing Term Loans, together with accrued interest thereon, shall
have been repaid, or shall be repaid simultaneously with the initial Borrowing
of the Term Loans hereunder.

 

 

ARTICLE
V

 

Affirmative Covenants

 

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

 

SECTION 5.01.  Existence; Businesses and Properties.  (a) 
Do or cause to be done all things necessary to preserve, renew and keep
in full force and effect its legal existence, except as otherwise expressly
permitted under Section 6.05.

 

(b)  Except as could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect:
(i) do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
necessary to the conduct of its business; (ii) comply in all material
respects with all applicable laws, rules, regulations and decrees and orders of
any Governmental Authority, including Environmental Laws, whether now in effect
or hereafter enacted; and (iii) at all times maintain and preserve all
property necessary to the conduct of such business and keep such property in
good repair, working order and condition and from time to time make, or cause
to be made, all needful and proper repairs, renewals, additions, improvements
and replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.

 

SECTION 5.02.  Insurance. 
(a)  Keep its insurable
properties adequately insured at all times by financially sound and reputable
insurers; maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses operating in the
same or similar locations, including public liability insurance against claims
for personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by it;
and maintain such other insurance as may be required by law.

 

(b)  Cause all such policies covering any
Collateral to be endorsed or otherwise amended to include a customary lender’s
loss payable endorsement, in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent, which endorsement shall provide
that, from and after the Closing Date, if the insurance carrier shall have
received written notice from the Administrative Agent or the Collateral Agent
of the occurrence of an Event of Default, the insurance carrier shall pay all
proceeds otherwise payable to the Borrower or the Loan Parties under such
policies directly to the Collateral Agent; cause all such policies to

 

56

 

provide that neither the
Borrower, the Administrative Agent, the Collateral Agent nor any other party
shall be a coinsurer thereunder and to contain a “Replacement Cost
Endorsement”, without any deduction for depreciation, and such other provisions
as the Administrative Agent or the Collateral Agent may reasonably require from
time to time to protect their interests; deliver original or certified copies
of all such policies to the Collateral Agent; cause each such policy to provide
that it shall not be canceled, modified or not renewed (i) by reason of
nonpayment of premium upon not less than 10 days’ prior written notice thereof
by the insurer to the Administrative Agent and the Collateral Agent (giving the
Administrative Agent and the Collateral Agent the right to cure defaults in the
payment of premiums) or (ii) for any other reason upon not less than
30 days’ prior written notice thereof by the insurer to the Administrative
Agent and the Collateral Agent; deliver to the Administrative Agent and the
Collateral Agent, prior to the cancelation, modification or nonrenewal of any
such policy of insurance, a copy of a renewal or replacement policy (or other
evidence of renewal of a policy previously delivered to the Administrative
Agent and the Collateral Agent) together with evidence reasonably satisfactory
to the Administrative Agent and the Collateral Agent of payment of the premium
therefor.

 

SECTION 5.03.  Obligations and Taxes.  Pay its Material Indebtedness and other
material obligations promptly and in accordance with their terms and pay and
discharge promptly when due all material taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect
of its property, before the same shall become delinquent or in default, as well
as all lawful material claims for labor, materials and supplies or otherwise
that, if unpaid, might give rise to a Lien upon such properties or any part
thereof; provided, however, that such payment and discharge
shall not be required with respect to any such tax, assessment, charge, levy or
claim so long as the validity or amount thereof shall be contested in good
faith by appropriate proceedings and the Borrower shall have set aside on its
books adequate reserves with respect thereto in accordance with GAAP and such
contest operates to suspend collection of the contested obligation, tax,
assessment or charge and enforcement of a Lien.

 

SECTION 5.04.  Financial Statements, Reports, etc.  In the case of the Borrower, furnish to the
Administrative Agent (which shall furnish such statements, certificates or
other documents received pursuant to this Section 5.04 to each Lender and
Issuing Bank):

 

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

 

(b) 
within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheet and related
statements of income, stockholders’ equity and cash flows showing the financial
condition of the Borrower and its consolidated Subsidiaries as of the close of
such fiscal quarter and the results of its

 

57

 

operations and
the operations of such Subsidiaries during such fiscal quarter and the then
elapsed portion of the fiscal year, and comparative figures for the same
periods in the immediately preceding fiscal year, all certified by one of its
Financial Officers as fairly presenting the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments;

 

(c) 
concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate of a Financial Officer opining
on or certifying such statements (i) certifying that no Event of Default
or Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto and (ii) setting forth
computations in reasonable detail satisfactory to the Administrative Agent
demonstrating compliance with the covenants contained in Sections 6.11,
6.12, 6.13 and 6.14 and (x) in the case of a certificate delivered with
the financial statements required by paragraph (b) above for the second
fiscal quarter of each year, setting forth the Borrower’s calculation of Excess
Cash Flow;

 

(d) 
concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during the
course of their examination of such financial statements of any Default or
Event of Default (which certificate may be limited to the extent required by
accounting rules or guidelines);

 

(e) 
no later than 45 days after the end of each fiscal year of the
Borrower, a detailed consolidated budget for the then current fiscal year
(including a projected consolidated balance sheet and related statements of
projected operations and cash flows as of the end of and for such fiscal year and
setting forth the assumptions used for purposes of preparing such budget) and,
promptly when available, any significant revisions of such budget;

 

(f) 
promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Holdings, the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed to its shareholders, as the case may be;

 

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

 

(h) 
promptly, following a request by any Lender, provide all documentation
and other information that such Lender reasonably requests in order to comply
with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the USA Patriot Act; and

 

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

 

58

 

SECTION 5.05.  Litigation and Other Notices.  Furnish to the Administrative Agent (which
shall furnish such notice to each Lender and Issuing Bank) prompt written
notice of the following:

 

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

 

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

 

(c) 
the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of Holdings, the Borrower and the Subsidiaries in an aggregate amount
exceeding $5,000,000; and

 

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

 

SECTION 5.06.  Information Regarding Collateral.  (a) 
Furnish to the Administrative Agent prompt written notice of any change
(i) in any Loan Party’s corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its properties,
(ii) in the location of any Loan Party’s chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Collateral owned by it to the extent that such collateral has an
aggregate fair market value in excess of $1,000,000 or any office or facility
at which Collateral owned by it is located (including the establishment of any
such new office or facility), (iii) in any Loan Party’s identity or
corporate structure or (iv) in any Loan Party’s Federal Taxpayer
Identification Number.  Holdings and the
Borrower agree not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for the Collateral Agent to continue at
all times following such change to have a valid, legal and perfected security
interest in all the Collateral.

 

(b)  In the case of the Borrower, each year, at
the time of delivery of the annual financial statements with respect to the
preceding fiscal year pursuant to Section 5.04(a), deliver to the
Administrative Agent a certificate of a Financial Officer setting forth the
information required pursuant to Section 2 of the Perfection Certificate
or confirming that there has been no change in such information since the date
of the Perfection Certificate delivered on the Closing Date or the date of the
most recent certificate delivered pursuant to this Section 5.06.

 

SECTION 5.07.  Maintaining Records; Access to Properties and Inspections.  Keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all material
requirements of law are made of all dealings and transactions in relation to
its business and activities.  Each Loan
Party will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the financial records and the properties of Holdings, the Borrower
or any Subsidiary at reasonable times and as often as reasonably requested and
to make extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender to discuss
the affairs, finances and condition of Holdings, the Borrower or any Subsidiary
with the officers thereof and independent accountants therefor.  Without limiting the

 

59

 

foregoing, Holdings and the
Borrower agree to discuss their affairs, finances and condition in conference
calls with Lenders at such times and at such intervals (but no more frequently
than on a quarterly basis within one week after the date of delivery of
financial statements required by Sections 5.04(a) and (b)) as shall be
requested in writing by the Administrative Agent or the Required Lenders.

 

SECTION 5.08.  Use of Proceeds.  Use the proceeds of the Loans and request the issuance of Letters
of Credit only for the purposes described in Section 3.13.

 

SECTION 5.09.  Further Assurances.  Execute any and all further documents, financing statements,
agreements and instruments, and take all further action (including filing
Uniform Commercial Code and other financing statements) that may be required
under applicable law, or that the Required Lenders, the Administrative Agent or
the Collateral Agent may reasonably request, in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant,
preserve, protect and perfect the validity and priority of the security
interests created or intended to be created by the Security Documents.  The Borrower will cause any subsequently
acquired or organized Domestic Subsidiary (other than an Inactive Subsidiary, a
Co-investment Subsidiary which is not a wholly owned Subsidiary, a Special Co-investment
Subsidiary or a JV Subsidiary), or any Domestic Subsidiary that ceases to be an
Inactive Subsidiary, a Special Co-investment Subsidiary or a JV Subsidiary or
that becomes a wholly owned Co-investment Subsidiary (other than a Special
Co-investment Subsidiary), to become party to the Collateral Agreement and each
other applicable Security Document in favor of the Collateral Agent.  In addition, from time to time, the Borrower
will, at its cost and expense, promptly secure the Obligations by pledging or
creating, or causing to be pledged or created, perfected security interests
with respect to such of its material assets and properties as the
Administrative Agent or the Required Lenders shall designate (it being
understood that it is the intent of the parties that the Obligations shall be
secured by, among other things, substantially all the assets of the Borrower
and its Domestic Subsidiaries (other than Inactive Subsidiaries, partially
owned Co-investment Subsidiaries, Special Co-investment Subsidiaries, JV
Subsidiaries and any assets consisting of Co-investment Vehicles) (including
material real property, properties of the types which constitute collateral
under the Security Documents on the Closing Date which are acquired subsequent
to the Closing Date and such other property that may be so pledged without
imposing undue burden or cost on the Borrower and its Subsidiaries)).  Such security interests and Liens will be
created under the Security Documents and other security agreements and other
instruments and documents in form and substance reasonably satisfactory to the
Collateral Agent, and the Borrower shall deliver or cause to be delivered to
the Lenders all such instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Collateral Agent shall reasonably
request to evidence compliance with this Section.

 

ARTICLE
VI

 

Negative Covenants

 

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

 

60

 

Lenders shall otherwise consent
in writing, neither Holdings nor the Borrower will, nor will they cause or permit
any of the Subsidiaries to:

 

SECTION 6.01.  Indebtedness.  Incur, create, assume or permit to exist any Indebtedness,
except:

 

(a) 
Indebtedness existing on the Restatement Date and set forth in
Schedule 6.01(a) and any extensions, renewals or replacements of such
Indebtedness to the extent the principal amount of such Indebtedness is not
increased, neither the final maturity nor the weighted average life to maturity
of such Indebtedness is decreased, such Indebtedness, if subordinated to the
Obligations, remains so subordinated on terms no less favorable to the Lenders,
and the obligors in respect of such Indebtedness at the time of such
refinancing remain the only obligors thereon;

 

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

 

(c) 
intercompany Indebtedness of the Borrower and the Subsidiaries to the
extent permitted by Section 6.04(c);

 

(d) 
Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets, and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this Section 6.01(d), when combined with the
aggregate principal amount of all Capital Lease Obligations incurred pursuant
to Section 6.01(e) shall not exceed $20,000,000 at any time outstanding;

 

(e) 
Capital Lease Obligations in an aggregate principal amount, when
combined with the aggregate principal amount of all Indebtedness incurred
pursuant to Section 6.01(d), not in excess of $20,000,000 at any time
outstanding;

 

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

 

(g) 
Melody Permitted Indebtedness and Non-Recourse Indebtedness;

 

(h) 
Indebtedness incurred by Foreign Subsidiaries for working capital in an
aggregate principal amount not exceeding $30,000,000 at any time outstanding,
up to $15,000,000 of which may be Guaranteed on an unsecured basis by the
Borrower and/or one or more Domestic Subsidiaries;

 

(i) 
Indebtedness of any Subsidiary that exists at the time such person
becomes a Subsidiary and that was not incurred in contemplation of or in
connection with the acquisition by the Borrower or a Subsidiary of such person,
in an aggregate principal amount not to exceed $10,000,000 at any time
outstanding;

 

(j) 
Guarantees by the Borrower or any Subsidiary of any Indebtedness
permitted under this Section 6.01; provided,
however, that (i) no Indebtedness of Holdings may be Guaranteed
under this paragraph (j), (ii) Indebtedness of Foreign Subsidiaries
may be

 

61

 

Guaranteed by the Borrower and the Domestic Subsidiaries only to the
extent provided for in paragraph (h) above and (iii) neither the
Borrower nor any Subsidiary (other than a Co-investment Subsidiary) may
Guarantee Non-Recourse Indebtedness;

 

(k) 
Indebtedness in respect of the Additional L/C Facilities in an aggregate
amount outstanding at any time not to exceed $30,000,000 ; and

 

(l) 
other unsecured Indebtedness of the Borrower or the Subsidiaries in an
aggregate principal amount not exceeding $40,000,000 at any time outstanding.

 

SECTION 6.02.  Liens. 
Create, incur, assume or permit to exist any Lien on any property or
assets (including Equity Interests or other securities of any person, including
any Subsidiary) now owned or hereafter acquired by it or on any income or
revenues or rights in respect of any thereof, except:

 

(a) 
Liens on property or assets of the Borrower and its Subsidiaries existing
on the Restatement Date and set forth in Schedule 6.02; provided that such Liens shall secure only
those obligations which they secure on the date hereof and extensions, renewals
and replacements thereof permitted hereunder;

 

(b) 
any Lien created under the Loan Documents;

 

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

 

(d) 
Liens for taxes, fees, assessments or other governmental charges not yet
due or which are being contested in compliance with Section 5.03;

 

(e) 
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
other like Liens arising in the ordinary course of business and securing
obligations that are not due and payable or which are being contested in
compliance with Section 5.03;

 

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

 

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

 

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

 

(i) 
purchase money security interests in real property, improvements thereto
or equipment hereafter acquired (or, in the case of improvements, constructed)
by the

 

62

 

Borrower or any Subsidiary; provided
that (i) such security interests secure Indebtedness permitted by
Section 6.01(d), (ii) such security interests are incurred, and the
Indebtedness secured thereby is created, within 90 days after such
acquisition (or construction), (iii) the Indebtedness secured thereby does
not exceed 100% of the cost of such real property, improvements or equipment at
the time of such acquisition (or construction) and (iv) such security
interests do not apply to any other property or assets of the Borrower or any
Subsidiary;

 

(j) 
Liens arising out of judgments or awards in respect of which Holdings,
the Borrower or any of the Subsidiaries shall in good faith be prosecuting an
appeal or proceedings for review in respect of which there shall be secured a
subsisting stay of execution pending such appeal or proceedings; provided that the aggregate amount of all
such judgments or awards (and any cash and the fair market value of any
property subject to such Liens) does not exceed $7,500,000 at any time
outstanding;

 

(k) 
Liens on assets of Foreign Subsidiaries; provided that (i) such Liens do not extend to, or
encumber, assets which constitute Collateral or the Equity Interests of the
Borrower or any of the Subsidiaries, and (ii) such Liens secure only
Indebtedness incurred by such Foreign Subsidiary pursuant to
Section 6.01(h);

 

(l) 
Liens on investments made by Melody in connection with the Melody Loan
Arbitrage Facility or the Melody Mortgage Warehousing Facility to secure
Indebtedness under the Melody Loan Arbitrage Facility, if such investments were
acquired by Melody with the proceeds of such Indebtedness;

 

(m) 
Liens on commercial mortgage loans originated and owned by Melody or any
Mortgage Banking Subsidiary pursuant to the Melody Mortgage Warehousing
Facility;

 

(n) 
any Lien existing on any property or asset of any person that exists at
the time such person becomes a Subsidiary and that secured Indebtedness
permitted by Section 6.01(i); provided
that (i) such Lien was not created in contemplation of or in connection
with such acquisition and (ii) such Lien does not apply to any property or
assets of the Borrower or any other Subsidiary;

 

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

 

(p) 
Liens on the assets of a Co-investment Subsidiary to secure Non-Recourse
Indebtedness; provided that such
Liens do not extend to, or encumber, the Equity Interests of any Co-investment
Subsidiary;

 

(q) 
Liens on any Equity Interests of any Designated Real Estate Asset
Subsidiary; and

 

63

 

(r) 
other Liens not permitted by the foregoing; provided that neither the obligations secured thereby nor
the aggregate fair market value of the assets subject thereto shall exceed
$5,000,000.

 

SECTION 6.03.  Sale and Lease-Back Transactions.  Enter into any arrangement, directly or
indirectly, with any person whereby it shall sell or transfer any property,
real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other
property which it intends to use for substantially the same purpose or purposes
as the property being sold or transferred unless (a) the sale of such
property is permitted by Section 6.05 and (b) any Capital Lease
Obligations or Liens arising in connection therewith are permitted by
Sections 6.01 and 6.02, respectively.

 

SECTION 6.04.  Investments, Loans and Advances.  Purchase, hold or acquire any Equity
Interests, evidences of indebtedness or other securities of, make or permit to
exist any loans or advances to, or make or permit to exist any investment or
any other interest in, any other person (other than investments in insurance
contracts pursuant to the Deferred Compensation Plan), except:

 

(a) 
(i) investments by Holdings, the Borrower and the Subsidiaries
existing on the Restatement Date in the Equity Interests of the Borrower and
the Subsidiaries and (ii) additional investments by Holdings, the Borrower
and the Subsidiaries in the Equity Interests of the Borrower and the
Subsidiaries; provided that
(A) any such Equity Interests held by a Loan Party shall be pledged
pursuant to the Collateral Agreement (provided that no Loan Party shall be
required to pledge more than 65% of the voting Equity Interests of any Foreign
Subsidiary) and (B) the aggregate amount of investments by Loan Parties
in, and loans and advances by Loan Parties to, Subsidiaries that are not Loan
Parties (other than investments in Co-investment Subsidiaries to implement
Co-investments pursuant to clause (i) below) shall not exceed at any time
outstanding the sum of (x) the aggregate amount of the investments, loans
and advances indicated on Schedule 6.04(a) and (y) $15,000,000;

 

(b) 
Permitted Investments;

 

(c) 
loans or advances made by the Borrower to any Subsidiary and made by any
Subsidiary to the Borrower or any other Subsidiary; provided that (i) any such loans and advances made by a
Loan Party shall be evidenced by a promissory note pledged to the Collateral
Agent for the ratable benefit of the Secured Parties pursuant to the Collateral
Agreement and (ii) the amount of such loans and advances made by Loan
Parties to Subsidiaries that are not Loan Parties shall be subject to the
limitation set forth in clause (a) above;

 

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

 

(e) 
the Borrower and the Subsidiaries may make loans and advances in the
ordinary course of business consistent with past practice to their respective
employees so long as the aggregate principal amount (determined without regard
to any write-downs or write-offs of such loans and advances, other than
write-downs or write-offs for which the total amount of such write-down or
write-off is included as a charge in Consolidated EBITDA) does not exceed
$25,000,000 in the aggregate outstanding at any time;

 

64

 

(f) 
the Borrower may enter into Hedging Agreements that are not speculative
in nature and are related to income derived from operations of the Borrower or
any Subsidiary or otherwise related to purchases from suppliers;

 

(g) 
the Borrower or any Subsidiary may acquire all or substantially all the
assets of a person or line of business of such person, or all or substantially
all of the Equity Interests of a person that as a result becomes a wholly owned
Subsidiary (referred to herein as the “Acquired
Entity”); provided
that (i) such acquisition was not preceded by an unsolicited tender offer
for such Equity Interests by, or proxy contest initiated by, Holdings, the
Borrower or any Subsidiary; (ii) the Acquired Entity shall be a going
concern and shall be in a similar line of business as that of the Borrower and
the Subsidiaries as conducted during the current and most recent calendar year;
and (iii) at the time of such transaction (A) both before and after
giving effect thereto, no Event of Default or Default shall have occurred and
be continuing; (B) the Borrower would be in Pro Forma Compliance, as
evidenced by a certificate of a Financial Officer of the Borrower which shall
have been prepared in good faith and based on reasonably detailed written
assumptions; (C) after giving effect to such acquisition, there must be at
least $40,000,000 of unused and available Revolving Credit Commitments; and
(D) the aggregate consideration paid in connection with such acquisition
and any related acquisitions pursuant to this Section 6.04(g) (including
any Indebtedness of the Acquired Entity that is assumed by the Borrower or any
Subsidiary following such acquisition and the amount of any forgivable loan to
the Acquired Entity) shall not exceed (x) $20,000,000 for such acquisition
and (y) $60,000,000 for all such acquisitions pursuant to this
Section 6.04(g) (any acquisition of an Acquired Entity meeting all the
criteria of this Section 6.04(g) being referred to herein as a “Permitted Acquisition”);

 

(h) 
investments made by Melody in connection with the Melody Loan Arbitrage
Facility or the Melody Mortgage Warehousing Facility;

 

(i) 
Co-investments (other than with respect to the Calpers Co-investment)
not to exceed $30,000,000 in any fiscal year of the Borrower and Co-investments
pursuant to the Calpers Co-investment not to exceed $26,000,000 in the
aggregate outstanding at any time; provided,
however, that the aggregate
amount of Co-investments in each fiscal year made in Co-investment Vehicles
that are organized in, or the principal real estate investments of which are
located in, countries that are not members of the Organization for Economic
Co-operation and Development, shall not exceed $5,000,000;

 

(j) 
investments to the extent consisting of noncash consideration received
in connection with a sale of assets permitted by Section 6.05;

 

(k) 
investments by Holdings, the Borrower and the Subsidiaries existing on
the Restatement Date and listed on Schedule 6.04(k);

 

(l) 
extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods and services in the ordinary
course of business;

 

(m) 
investments in, and loans and advances to, the Designated Real Estate
Subsidiaries pursuant to Section 9.3 of the Island Purchase Agreement, on
behalf of and solely with monies advanced by Island and its Affiliates (other
than, for the avoidance of doubt, Holdings, the Borrower or any Subsidiary);

 

65

 

(n) 
additional investments in, and loans or advances to, the Designated Real
Estate Asset Subsidiaries in an aggregate amount not to exceed $5,900,000; and

 

(o) 
in addition to investments permitted by paragraphs (a) through (n)
above, additional investments, loans and advances by the Borrower and the
Subsidiaries so long as the aggregate amount invested, loaned or advanced
pursuant to this paragraph (o) (determined without regard to any
write-downs or write-offs of such investments, loans and advances) does not
exceed $30,000,000 in the aggregate outstanding at any time.

 

SECTION 6.05.  Mergers, Consolidations, Sales of Assets and Acquisitions.  (a) 
Merge into or consolidate with any other person, or permit any other
person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
substantially all the assets (whether now owned or hereafter acquired) of the
Borrower, or purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
person, except that if at the time thereof and immediately after giving effect
thereto no Event of Default or Default shall have occurred and be continuing
(i) any wholly owned Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
wholly owned Subsidiary may merge into or consolidate with any other wholly
owned Subsidiary in a transaction in which the surviving entity is a wholly
owned Subsidiary and no person other than the Borrower or a wholly owned
Subsidiary receives any consideration (provided
that if any party to any such transaction is a Loan Party, the surviving entity
of such transaction shall be a Loan Party) and (iii) the Borrower and the
Subsidiaries may make Permitted Acquisitions.

 

(b)  Engage in any other Asset Sale except:

 

(i)  (A) any such Asset Sale the consideration for which is at
least 80% cash, (B) such consideration is at least equal to the fair
market value of the assets being sold, transferred, leased or disposed of,
(C) the fair market value of all assets sold, transferred, leased or
disposed of pursuant to this clause (i) (other than sales of Equity
Interests by Foreign Subsidiaries to investors) shall not exceed in any fiscal
year the sum of (I) $10,000,000 for each fiscal year (the amount of
permitted Asset Sales in any fiscal year being referred to herein as the “Annual Limit”)
plus (II) in each fiscal year, the excess, if any, of the Annual Limit for
the preceding fiscal year over the amount of Asset Sales made by the Borrower
and the Subsidiaries during the preceding fiscal year, (D) sales of Equity
Interests by Foreign Subsidiaries to investors shall not exceed $10,000,000 in
any fiscal year and (E) the aggregate amount of all Asset Sales made
pursuant to this provision (other than pursuant to clause (D)) from the
Restatement Date to the termination of this Agreement shall not exceed
$25,000,000; and

 

(ii)  sales by the Borrower or the Subsidiaries of brokerage offices,
or transfers of the assets of brokerage offices and related assets, to joint
ventures in the ordinary course of business.

 

SECTION 6.06.  Restricted Payments; Restrictive Agreements.  (a) 
Declare or make, or agree to declare or make, directly or indirectly,
any Restricted Payment (including pursuant to any Synthetic Purchase
Agreement), or incur any obligation (contingent or otherwise) to do so; provided, however,
that (i) any Subsidiary may declare and pay dividends or make other
distributions ratably to its equity holders, (ii) so long as (x) no
Event of Default shall have occurred and be continuing and (y) the
Borrower shall be in Pro Forma Compliance after giving effect thereto, the
Borrower may make Restricted Payments to Holdings in the amounts and at the 

 

66

 

times necessary to enable
Holdings (A) to pay interest in cash on the Holdco Notes and (B) if
then permitted by Section 6.09(c)(ii) or (iii), to redeem, repurchase or
otherwise retire Holdco Notes, (iii) so long as no Event of Default or
Default shall have occurred and be continuing or would result therefrom, the
Borrower may, or the Borrower may make distributions to Holdings so that
Holdings may, repurchase its Equity Interests owned by employees of Holdings,
the Borrower or the Subsidiaries or make payments to employees of Holdings, the
Borrower or the Subsidiaries upon termination of employment in connection with
the exercise of stock options, stock appreciation rights or similar equity
incentives or equity based incentives pursuant to management incentive plans or
in connection with the death or disability of such employees in an aggregate
amount (excluding any amount of any such repurchase paid for with the
cancellation of Indebtedness of such employee to the Borrower or Holdings, as
the case may be) not to exceed $4,000,000 in any fiscal year, (iv) the
Borrower may, or the Borrower may make distributions to Holdings, so that Holdings
may, repurchase or redeem shares of its Equity Interests pursuant to the
Borrower’s 401(k) plan as in effect on the Closing Date and to the extent
required by law, (v) so long as no Event of Default shall have occurred
and be continuing or would result therefrom, the Borrower may, or the Borrower
may make distributions to Holdings, so that Holdings may, repurchase or redeem
shares (including any repurchase or redemption paid for with the cancellation
of Indebtedness of the applicable employee to the Borrower or Holdings, as the
case may be) of its Equity Interests issued or granted by Holdings to employees
(including substantially full-time independent contractors) and held by such
employees in an aggregate amount not to exceed $4,000,000 during any fiscal
year of the Borrower, provided that any such purchases or
redemptions paid for with the cancellation of Indebtedness of employees to the
Borrower or Holdings, as the case may be, shall not be limited in amount,
(vi) the Borrower may make Restricted Payments to Holdings (x) in an
amount not to exceed $1,000,000 in any fiscal year, to the extent necessary to
pay actual out-of-pocket general corporate and overhead expenses incurred by
Holdings in the ordinary course of business and (y) in an amount necessary
to pay Tax liabilities directly attributable to (or arising as a result of) the
Borrower and the Subsidiaries, and (vii) Holdings may issue common stock
of Holdings in exchange for stock fund units in the Deferred Compensation Plan
pursuant to the Deferred Compensation Plan. 
Notwithstanding the foregoing, all Restricted Payments made to Holdings
pursuant to clause (ii), (v) or (vi) above will be used by Holdings for
the purposes specified herein within 10 Business Days of the receipt
thereof or returned to the Borrower.

 

(b)  Enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (i) the ability of Holdings, the Borrower or any Subsidiary
to create, incur or permit to exist any Lien upon any of its property or
assets, or (ii) the ability of any Subsidiary to pay dividends or other
distributions with respect to any of its Equity Interests or to make or repay
loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness
of the Borrower or any other Subsidiary; provided that (A) the foregoing shall
not apply to restrictions and conditions imposed by law or by any Loan
Document, Senior Subordinated Note Document or Senior Unsecured Note Document,
(B) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided
such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (C) the foregoing shall not
apply to restrictions and conditions imposed on any Foreign Subsidiary by the
terms of any Indebtedness of such Foreign Subsidiary permitted to be incurred
hereunder, (D) clause (i) of the foregoing shall not apply to restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by this Agreement if such restrictions or conditions apply only to
the property or assets securing such Indebtedness, (E) the foregoing shall
not apply to restrictions and conditions existing on the Restatement Date and
identified on Schedule 6.06(b), (F) the

 

67

 

foregoing shall not apply to
customary restrictions on or customary conditions to the payment of dividends
or other distributions on, or the creation of Liens on, Equity Interests owned
by the Borrower or any Subsidiary in any joint venture or similar enterprise
contained in the constitutive documents, including shareholders’ or similar
agreements, of such joint venture or enterprise, and (G) clause (i)
of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

 

SECTION 6.07.  Transactions with Affiliates.  Except for transactions by or among Loan
Parties, sell or transfer any property or assets to, or purchase or acquire any
property or assets from, or otherwise engage in any other transactions with,
any of its Affiliates, except that the Borrower or any Subsidiary may engage in
any of the foregoing transactions at prices and on terms and conditions not
less favorable to the Borrower or such Subsidiary than could be obtained on an
arm’s-length basis from unrelated third parties.

 

SECTION 6.08.  Business of Holdings, Borrower and Subsidiaries.  (a) 
With respect to Holdings, engage in any business activities or have any
assets or liabilities other than (i) its ownership of the Equity Interests
of the Borrower, its activities as a holding company, the provision of certain
administrative services for its subsidiaries in the ordinary course of
business, and liabilities reasonably related thereto, including its liabilities
pursuant to the Collateral Agreement, and (ii) its liabilities pursuant to
the Holdco Note Documents, the Senior Subordinated Note Documents and the
Senior Unsecured Note Documents.

 

(b)  With respect to the Borrower and its
Subsidiaries, engage at any time in any business or business activity other
than the business currently conducted by the Borrower or any of the
Subsidiaries and business activities reasonably incidental thereto.

 

SECTION 6.09.  Other Indebtedness and Agreements.  (a) 
(i) Permit any waiver, supplement, modification, amendment,
termination or release of any indenture, instrument or agreement pursuant to
which any Material Indebtedness of Holdings, the Borrower or any of the
Subsidiaries is outstanding if the effect of such waiver, supplement,
modification, amendment, termination or release would materially increase the
obligations of the obligor or confer additional material rights on the holder
of such Indebtedness in a manner adverse to Holdings, the Borrower, any of the
Subsidiaries or the Lenders or (ii) modify its charter or by-laws to the
extent that any such modification would be adverse to the Lenders in any material
respect.

 

(b)  (i)  Make any distribution,
whether in cash, property, securities or a combination thereof, other than
regular scheduled payments of principal and interest as and when due (to the
extent not prohibited by applicable subordination provisions), in respect of,
or pay, or offer or commit to pay, or directly or indirectly (including
pursuant to any Synthetic Purchase Agreement) redeem, repurchase, retire or
otherwise acquire for consideration, or set apart any sum for the aforesaid
purposes, the Holdco Notes or any subordinated Indebtedness, or (ii) pay
in cash any amount in respect of any Indebtedness (other than the Holdco Notes,
to the extent permitted by Section 6.06(a)) or preferred Equity Interests)
that may at the obligor’s option be paid in kind or in other securities.

 

(c)  Notwithstanding the foregoing, so long as no
Default or Event of Default shall have occurred and be continuing or result
therefrom, (i) Holdings may expend up to $20,000,000 of the proceeds of
the Cash Equity Contribution that were not used to consummate the Merger
Transactions to redeem, repurchase or otherwise retire Holdco Notes,
(ii) Holdings may expend up to $10,000,000 of the proceeds of the Term
Loans to redeem, repurchase or otherwise retire Holdco Notes and
(iii) Holdings may otherwise redeem, repurchase or otherwise retire the
Holdco

 

68

 

Notes, in whole or in part, so
long as after giving effect to each such redemption, repurchase or retirement,
(x) the Borrower would be in Pro Forma Compliance, (y) there would be
no outstanding Revolving Loans or Swingline Loans and (z) if the aggregate
amount so expended pursuant to this clause (iii) would exceed $25,000,000, the
Senior Secured Leverage Ratio would be less than 1.25 to 1.00.

 

SECTION 6.10.  Capital Expenditures.  Permit the aggregate amount of Capital
Expenditures made by the Borrower and the Subsidiaries to exceed
(i) $30,000,000 in the fiscal year ending 2002, (ii) $50,000,000 in
the fiscal year ending 2003 or (iii) $40,000,000 in any fiscal year
thereafter.  The amount of permitted
Capital Expenditures set forth above in respect of any fiscal year, shall be
increased (but not decreased) by (a) the amount of unused permitted
Capital Expenditures for the immediately preceding fiscal year less (b) an
amount equal to unused Capital Expenditures carried forward to such preceding
fiscal year.

 

SECTION 6.11.  Interest Coverage Ratio.  Permit the Interest Coverage Ratio for any
period of four consecutive fiscal quarters, in each case taken as one
accounting period, ending on the last day of any fiscal quarter during any
period set forth below to be less than the ratio set forth opposite such period
below:

 

	
  Date or
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2003 through June 30, 2005

  	
   

  	
  2.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2005 and thereafter

  	
   

  	
  2.25:1.00

  	
   

  

 

SECTION 6.12.  Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage Ratio for
any period of four consecutive fiscal quarters, in each case taken as one
accounting period, ending on the last day of any fiscal quarter during any
period set forth below to be less than the ratio set forth opposite such date
or period below:

 

	
  Date or
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2003 through June 30, 2005

  	
   

  	
  1.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2005 and thereafter

  	
   

  	
  1.50:1.00

  	
   

  

 

SECTION 6.13.  Maximum Leverage Ratio.  Permit the Leverage Ratio on the last day of
any fiscal quarter during any period set forth below to be greater than the
ratio set forth opposite such date or period below:

 

69

 

	
  Date or
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2003

  	
   

  	
  4.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2003

  	
   

  	
  3.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2004 through June 30, 2004

  	
   

  	
  4.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2004

  	
   

  	
  3.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2005 through June 30, 2005

  	
   

  	
  3.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2005

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2005

  	
   

  	
  2.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2006 through June 30, 2006

  	
   

  	
  3.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2006

  	
   

  	
  3.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2006

  	
   

  	
  2.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007 through June 30,
  2007

  	
   

  	
  2.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2007

  	
   

  	
  2.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2007 and thereafter

  	
   

  	
  2.25:1.00

  	
   

  

 

 

SECTION 6.14.  Maximum Senior Secured Leverage Ratio.  Permit the Senior Secured Leverage Ratio on
the last day of any fiscal quarter during any period set forth below to be
greater than the ratio set forth opposite such date or period below:

 

	
  Date or
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2003

  	
   

  	
  1.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2003

  	
   

  	
  1.25:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2004 through June 30, 2004

  	
   

  	
  1.75:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2004

  	
   

  	
  1.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004

  	
   

  	
  1.00:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2005 through June 30, 2005

  	
   

  	
  1.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2005 and thereafter

  	
   

  	
  1.25:1.00

  	
   

  

 

SECTION 6.15.  Fiscal Year. 
With respect to Holdings and the Borrower, change their fiscal year-end
to a date other than December 31.

 

SECTION 6.16.  Management Fees.  With respect to Holdings and the Borrower, pay or agree to pay to
any Sponsor any management fees, transaction fees or similar charges.

 

70

 

SECTION 6.17.  Indebtedness of Co-investment Subsidiaries.  (a) 
Permit any Co-investment Subsidiary other than a JV Subsidiary to incur,
create, assume or permit to exist any Indebtedness other than Non-Recourse
Indebtedness; or

 

(b)  Permit any JV Subsidiary to incur, create,
assume or permit to exist any Indebtedness in an aggregate amount outstanding
at any time which exceeds $10,000,000; provided that, the debt permitted pursuant
to this paragraph (b) must also be permitted under Section 6.01 to be
incurred, created, assumed or permitted to exist.

 

ARTICLE VII

 

Events of
Default

 

In case of the
happening of any of the following events (“Events of Default”):

 

(a) 
any representation or warranty made or deemed made in or in connection
with any Loan Document or the borrowings or issuances of Letters of Credit
hereunder, or any representation, warranty, statement or information contained
in any report, certificate, financial statement or other instrument furnished
in connection with or pursuant to any Loan Document, shall prove to have been
false or misleading in any material respect when so made, deemed made or
furnished;

 

(b) 
default shall be made in the payment of any principal of any Loan or the
reimbursement with respect to any L/C Disbursement when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;

 

(c) 
default shall be made in the payment of any interest on any Loan or L/C
Disbursement or any Fee or any other amount (other than an amount referred to
in (b) above) due under any Loan Document, when and as the same shall
become due and payable, and such default shall continue unremedied for a period
of three Business Days;

 

(d) 
default shall be made in the due observance or performance by Holdings,
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in Section 2.13(i), 5.01(a), 5.05(a) or 5.08 or in
Article VI;

 

(e) 
default shall be made in the due observance or performance by Holdings,
the Borrower or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in (b), (c) or (d)
above) and such default shall continue unremedied for a period of 30 days
after notice thereof from the Administrative Agent or any Lender to the
Borrower;

 

(f) 
(i)  Holdings, the Borrower or
any Subsidiary shall fail to pay any principal or interest, regardless of
amount, due in respect of any Material Indebtedness, when and as the same shall
become due and payable, or (ii) any other event or condition occurs that
results in any Material Indebtedness becoming due prior to its scheduled maturity
or that enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any trustee
or agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided

 

71

 

that this clause (ii) shall not apply to (x) secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness and (y) Indebtedness
existing on the Closing Date which by its terms provides for an option by the
payee thereof to require repayment prior to the scheduled maturity thereof;

 

(g) 
an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief in
respect of Holdings, the Borrower or any Subsidiary (other than an Inactive
Subsidiary), or of a substantial part of the property or assets of Holdings,
the Borrower or a Subsidiary (other than an Inactive Subsidiary), under
Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Holdings, the
Borrower or any Subsidiary (other than an Inactive Subsidiary) or for a
substantial part of the property or assets of Holdings, the Borrower or a
Subsidiary (other than an Inactive Subsidiary) or (iii) the winding-up or
liquidation of Holdings, the Borrower or any Subsidiary (other than an Inactive
Subsidiary); and such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing
shall be entered;

 

(h) 
Holdings, the Borrower or any Subsidiary (other than an Inactive
Subsidiary) shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in (g) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Holdings, the
Borrower or any Subsidiary (other than an Inactive Subsidiary) or for a
substantial part of the property or assets of Holdings, the Borrower or any
Subsidiary (other than an Inactive Subsidiary), (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail generally to
pay its debts as they become due or (vii) take any action for the purpose
of effecting any of the foregoing;

 

(i) 
one or more judgments for the payment of money in an aggregate amount in
excess of $7,500,000 shall be rendered against Holdings, the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon assets or properties of Holdings, the Borrower or any Subsidiary
to enforce any such judgment;

 

(j) 
an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other such ERISA Events, could reasonably
be expected to result in a Material Adverse Effect;

 

(k) 
any Guarantee under the Collateral Agreement for any reason shall cease
to be in full force and effect (other than in accordance with its terms), or
any Guarantor shall deny in writing that it has any further liability under the
Collateral Agreement (other

 

72

 

than as a result of the discharge of such Guarantor in accordance with
the terms of the Loan Documents);

 

(l) 
any security interest purported to be created by any Security Document
shall cease to be, or shall be asserted by the Borrower or any other Loan Party
not to be, a valid, perfected, first priority (except as otherwise expressly
provided in this Agreement or such Security Document) security interest in the
securities, assets or properties covered thereby, except to the extent that any
such loss of perfection or priority results from (i) the sale or other
disposition of the applicable Collateral in a transaction permitted by any Loan
Document, (ii) any action taken by the Collateral Agent to release any
such Lien in compliance with the provisions of this Agreement or any other Loan
Document, (iii) the Collateral Agent’s failure to properly file
(A) Uniform Commercial Code financing statements or comparable filings
delivered to it for filing under the Security Documents or (B) Uniform Commercial
Code continuation statements or comparable filings necessary to maintain
perfection or (iv) the failure of the Collateral Agent to maintain
possession of certificates representing securities pledged and delivered to it
under the Collateral Agreement;

 

(m) 
any of the Obligations shall cease to constitute “Designated Senior
Indebtedness” under and as defined in the Senior Subordinated Note Indenture;
or

 

(n) 
there shall have occurred a Change in Control;

 

then, and in every such event
(other than an event with respect to Holdings or the Borrower described in
paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times:  (i) terminate forthwith the Commitments
and (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared
to be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding; and in any event with
respect to Holdings or the Borrower described in paragraph (g) or (h)
above, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall automatically become due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding.

 

ARTICLE VIII

 

The
Administrative Agent and the Collateral Agent

 

Each of the
Lenders and the Issuing Bank hereby irrevocably appoints the Administrative
Agent and the Collateral Agent (for purposes of this Article VIII, the
Administrative Agent and the Collateral Agent are referred to collectively as
the “Agents”)
its agent and authorizes the Agents to take such actions on its behalf and to
exercise such powers as are delegated to such

 

73

 

Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.  Without limiting the
generality of the foregoing, the Agents are hereby expressly authorized to execute
any and all documents (including releases) with respect to the Collateral and
the rights of the Secured Parties with respect thereto, as contemplated by and
in accordance with the provisions of this Agreement and the Security Documents.

 

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

 

Neither Agent
shall have any duties or obligations except those expressly set forth in the
Loan Documents.  Without limiting the
generality of the foregoing, (a) neither Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) neither Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that such Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.08), and (c) except as expressly set forth in the Loan
Documents, neither Agent shall have any duty to disclose, nor shall it be
liable for the failure to disclose, any information relating to Holdings, the
Borrower or any of the Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent and/or Collateral Agent or any of its
Affiliates in any capacity.  Neither
Agent shall be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.08) or in the absence of its own gross negligence or wilful
misconduct.  Neither Agent shall be
deemed to have knowledge of any Default unless and until written notice thereof
is given to such Agent by Holdings, the Borrower or a Lender, and neither Agent
shall be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection
with any Loan Document, (ii) the contents of any certificate, report or
other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other
than to confirm receipt of items expressly required to be delivered to such
Agent.

 

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

 

Each Agent may
perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by it. 
Each Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers by or through their respective

 

74

 

Related Parties.  The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of each
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Agent.

 

Subject to the
appointment and acceptance of a successor Agent as provided below, either Agent
may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower.  Upon any such resignation,
the Required Lenders shall have the right, in consultation with the Borrower
and, unless an Event of Default shall have occurred and be continuing, with the
consent of the Borrower (which shall not be unreasonably withheld), to appoint
a successor.  If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders and the
Issuing Bank, appoint a successor Agent which shall be a bank with an office in
New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as
Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder.  The fees payable
by the Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such
successor.  After an Agent’s resignation
hereunder, the provisions of this Article and Section 9.05 shall continue
in effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while acting as Agent.

 

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

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01.  Notices. 
Notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by fax, as follows:

 

(a) 
if to the Borrower or Holdings, to it at CB Richard Ellis Services,
Inc., 865 South Figueroa Street, 34th Floor, Los Angeles, CA 90017, Attention
of Chief Financial Officer (Fax No. (213) 438-4820); at CB Richard Ellis
Services, Inc., 355 South Grand Avenue, Suite 3100, Los Angeles, CA 90071,
Attention of Assistant General Counsel, Corporate (Fax No. (213) 613-3008); and
at CB Richard Ellis Services, Inc., at 970 West 190th Street, Suite 280,
Torrance, CA 90502, Attention of Treasurer (Fax No. (310) 354-5070);

 

(b) 
if to the Administrative Agent, to Credit Suisse First Boston, Eleven
Madison Avenue, New York, NY 10010, Attention of Syndicated
Finance/Agency

 

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Department Manager (Fax No. (212) 325-8304), with a copy to Credit
Suisse First Boston, at Eleven Madison Avenue, New York, NY 10010,
Attention of Mark E. Gleason (Fax No. (212) 325-8615); and

 

(c) 
if to a Lender, to it at its address (or fax number or e-mail address)
set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.

 

All notices and other
communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by fax or on the date
five Business Days after dispatch by certified or registered mail if mailed, in
each case delivered, sent or mailed (properly addressed) to such party as
provided in this Section 9.01 or in accordance with the latest unrevoked
direction from such party given in accordance with this Section 9.01.  As agreed to among Holdings, the Borrower,
the Administrative Agent and the applicable Lenders from time to time, notices
and other communications may also be delivered by e-mail to the e-mail address
of a representative of the applicable person provided from time to time by such
person.  Holdings, the Borrower, the
Administrative Agent and any Lender may each change the address or e-mail
address for service of notice and other communications by a notice in writing
to the other parties hereto.

 

SECTION 9.02.  Survival of Agreement.  All covenants, agreements, representations
and warranties made by the Borrower or Holdings herein and in the certificates
or other instruments prepared or delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the Lenders and the Issuing Bank and shall survive the making by
the Lenders of the Loans and the issuance of Letters of Credit by the Issuing
Bank, regardless of any investigation made by the Lenders or the Issuing Bank
or on their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any Fee or any other amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated.  The
provisions of Sections 2.14, 2.16, 2.20 and 9.05 shall remain operative
and in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the
expiration of any Letter of Credit, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank.

 

SECTION 9.03.  Binding Effect.  This Agreement shall become effective as provided in the
Amendment Agreement.

 

SECTION 9.04.  Successors and Assigns. 
(a)  Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the permitted successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, Holdings, the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Lenders
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.

 

(b)  Each Lender may assign to one or more
assignees all or a portion of its interests, rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided, however, that
(i) except in the case of an assignment by a Lender of its outstanding
Term Loans to a Lender or an Affiliate or Related Fund of a Lender

 

76

 

which does not result in any
increased costs or other additional amounts being paid by the Borrower,
(x) the Borrower and the Administrative Agent (and, in the case of any
assignment of a Revolving Credit Commitment, the Issuing Bank and the Swingline
Lender) must give their prior written consent to such assignment (which consent
shall not be unreasonably withheld); provided, however, that the consent of
the Borrower shall not be required to any such assignment during the
continuance of any Event of Default; provided further, however, that any such
assignment made in connection with the syndication of the Term Loans within 60
Business Days after the Restatement Date shall not require the consent of the
Borrower but shall be made in consultation with the Borrower, and (y) the
amount of the Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $1,000,000 (or, if less, the entire remaining amount of such
Lender’s Commitment), (ii) the parties to each such assignment shall
(A) electronically execute and deliver to the Administrative Agent an
Assignment and Acceptance via an electronic settlement system acceptable to the
Administrative Agent (which initially shall be ClearPar, LLC) or (B) if no
such system shall be acceptable to the Administrative Agent, manually execute
and deliver to the Administrative Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500 at the discretion of the
Administrative Agent, and (iii) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire and
any applicable tax forms.  Upon
acceptance and recording pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each
Assignment and Acceptance, (A) the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement
and (B) the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees accrued for its
account and not yet paid).

 

(c)  By executing and delivering an Assignment
and Acceptance, the assigning Lender thereunder and the assignee thereunder
shall be deemed to confirm to and agree with each other and the other parties
hereto as follows:  (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that
its Term Loan Commitment and Revolving Credit Commitment, and the outstanding
balances of its Term Loans and Revolving Loans, in each case without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations made
in or in connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto, or
the financial condition of the Holdings, the Borrower or any Subsidiary or the
performance or observance by Holdings, the Borrower or any Subsidiary of any of
its obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of the most recent financial
statements referred to in Section 3.05 or delivered pursuant to
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance;

 

77

 

(v) such assignee will
independently and without reliance upon the Administrative Agent, the
Collateral Agent, such assigning Lender 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 this
Agreement; (vi) such assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the
Administrative Agent and the Collateral Agent, respectively, by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their
terms all the obligations which by the terms of this Agreement are required to
be performed by it as a Lender.

 

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

 

(e)  Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, an
Administrative Questionnaire (including any tax documentation required therein)
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in
paragraph (b) above, if any, and, if required, the written consent of the
Borrower, the Swingline Lender, the Issuing Bank and the Administrative Agent
to such assignment, the Administrative Agent shall (i) accept such
Assignment and Acceptance, (ii) record the information contained therein
in the Register and (iii) give prompt notice thereof to the Borrower, the
Issuing Bank and the Swingline Lender. 
No assignment shall be effective unless it has been recorded in the
Register as provided in this paragraph (e), and it shall be the sole
responsibility of each assignee to confirm such recordation.

 

(f)  Each Lender may without the consent of the
Borrower, the Swingline Lender, the Issuing Bank or the Administrative Agent
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided, however,
that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.14, 2.16 and 2.20 to
the same extent as if they were Lenders (but, with respect to any particular
participant, to no greater extent than the Lender that sold the participation
to such participant and solely to the extent that such participant agrees to
comply with the requirements of Section 2.20(f) as though it were a
Lender) and (iv) the Borrower, the Administrative Agent, the Issuing Bank
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of the
Borrower relating to the Loans or L/C Disbursements and to approve any
amendment, modification or waiver of any

 

78

 

provision of this Agreement
(other than amendments, modifications or waivers decreasing any fees payable
hereunder or the amount of principal of or the rate at which interest is
payable on the Loans, extending any scheduled principal payment date or date
fixed for the payment of interest on the Loans, increasing or extending the
Commitments or releasing any Guarantor or all or any substantial part of the
Collateral).

 

(g)  Any Lender or participant may, in connection
with any assignment or participation or proposed assignment or participation
pursuant to this Section 9.04, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided that, prior to any
such disclosure of information designated by the Borrower as confidential, each
such assignee or participant or proposed assignee or participant shall execute
an agreement whereby such assignee or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of such confidential
information on terms no less restrictive than those applicable to the Lenders
pursuant to Section 9.16.

 

(h)  Any Lender may at any time assign all or any
portion of its rights under this Agreement to secure extensions of credit to
such Lender or in support of obligations owed by such Lender; provided
that no such assignment shall release a Lender from any of its obligations
hereunder or substitute any such assignee for such Lender as a party hereto.

 

(i)  Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle (an “SPC”), identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and the
Borrower, the option to provide to the Borrower all or any part of any Loan
that such Granting Lender would otherwise be obligated to make to the Borrower
pursuant to this Agreement; provided that (i) nothing herein
shall constitute a commitment by any SPC to make any Loan and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof.  The
making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender.  Each party hereto
hereby agrees that no SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender).  In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any
other person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof.  In
addition, notwithstanding anything to the contrary contained in this
Section 9.04, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without paying
any processing fee therefor, assign all or a portion of its interests in any
Loans to the Granting Lender or to any financial institutions (consented to by
the Borrower and Administrative Agent) providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC, subject to an agreement to preserve the confidentiality of such non-public
information.

 

79

 

(j)  Neither Holdings nor the Borrower shall
assign or delegate any of its rights or duties hereunder without the prior
written consent of the Administrative Agent, the Issuing Bank and each Lender,
and any attempted assignment without such consent shall be null and void.

 

(k)  In the event that Standard & Poor’s
Ratings Service, Moody’s Investors Service, Inc., and Thompson’s Bank Watch (or
Insurance Watch Ratings Service, in the case of Lenders that are insurance
companies (or Best’s Insurance Reports, if such insurance company is not rated
by Insurance Watch Ratings Service)) shall, after the date that any Lender
becomes a Revolving Credit Lender, downgrade the long-term certificate of
deposit ratings of such Lender, and the resulting ratings shall be below BBB-,
Baa3 and C (or BB, in the case of a Lender that is an insurance company (or B,
in the case of an insurance company not rated by Insurance Watch Ratings
Service)), then the Issuing Bank shall have the right, but not the obligation,
at its own expense, upon notice to such Lender and the Administrative Agent, to
replace (or to request the Borrower to use its reasonable efforts to replace)
such Lender with an assignee (in accordance with and subject to the
restrictions contained in paragraph (b) above), and such Lender hereby
agrees to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in paragraph (b) above) all its interests,
rights and obligations in respect of its Revolving Credit Commitment to such
assignee; provided,
however,
that (i) no such assignment shall conflict with any law, rule and
regulation or order of any Governmental Authority and (ii) the Issuing
Bank or such assignee, as the case may be, shall pay to such Lender in
immediately available funds on the date of such assignment the principal of and
interest accrued to the date of payment on the Loans made by such Lender
hereunder and all other amounts accrued for such Lender’s account or owed to it
hereunder.

 

SECTION 9.05.  Expenses; Indemnity.  (a) 
The Borrower and Holdings agree, jointly and severally, to pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, the Issuing Bank and the Swingline Lender in connection with the
syndication of the credit facilities provided for herein and the preparation
and administration of this Agreement and the other Loan Documents or in
connection with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Administrative Agent, the
Collateral Agent or any Lender in connection with the enforcement or protection
of its rights in connection with this Agreement and the other Loan Documents or
in connection with the Loans made or Letters of Credit issued hereunder, including
the reasonable fees, charges and disbursements of Cravath, Swaine &
Moore LLP, counsel for the Administrative Agent and the Collateral Agent, and,
in connection with any such enforcement or protection, the reasonable fees,
charges and disbursements of any other counsel for the Administrative Agent,
the Collateral Agent or any Lender.

 

(b)  The Borrower and Holdings agree, jointly and
severally, to indemnify the Administrative Agent, the Collateral Agent, each
Lender, the Issuing Bank and each Related Party of any of the foregoing persons
(each such person being called an “Indemnitee”) against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (other than Excluded Taxes), including reasonable counsel
fees, charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby, (ii) the use
of the proceeds of the Loans or issuance of Letters of Credit, (iii) any
claim, litigation, investigation or proceeding relating to any of the

 

80

 

foregoing, whether or not any
Indemnitee is a party thereto, or (iv) any actual or alleged presence or
Release of Hazardous Materials on any property owned or operated by the
Borrower or any of the Subsidiaries, or any Environmental Liability related in
any way to the Borrower or the Subsidiaries; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or wilful misconduct of such Indemnitee.

 

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

 

(d)  To the extent permitted by applicable law,
neither Holdings nor the Borrower shall assert, and each hereby waives, any
claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement
or any agreement or instrument contemplated hereby, the Transactions, any Loan
or Letter of Credit or the use of the proceeds thereof.

 

(e)  The provisions of this Section 9.05
shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the expiration of the
Commitments, the expiration of any Letter of Credit, the invalidity or
unenforceability of any term or provision of this Agreement or any other Loan
Document, or any investigation made by or on behalf of the Administrative
Agent, the Collateral Agent, any Lender or the Issuing Bank.  All amounts due under this Section 9.05
shall be payable on written demand therefor.

 

SECTION 9.06.  Right of Setoff.  If an Event of Default shall have occurred and be continuing,
each Lender is hereby authorized at any time and from time to time, except to
the extent prohibited by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower or Holdings against any of and all the obligations of
the Borrower or Holdings now or hereafter existing under this Agreement and
other Loan Documents (to the extent such obligations of Holdings or the
Borrower are then due and payable (by acceleration or otherwise)) held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or such other Loan Document and although such obligations
may be unmatured.  The rights of each
Lender under this Section 9.06 are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.

 

SECTION 9.07.  Applicable Law.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS
OF CREDIT AND AS EXPRESSLY SET FORTH

 

81

 

IN OTHER LOAN DOCUMENTS) SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK.  EACH LETTER OF CREDIT
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR
RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE
DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS MOST
RECENTLY PUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF CREDIT WAS ISSUED,
BY THE INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”) AND, AS TO
MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF
NEW YORK.

 

SECTION 9.08.  Waivers; Amendment.  (a)  No failure or delay
of the Administrative Agent, the Collateral Agent, any Lender or the Issuing
Bank in exercising any power or right hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. 
No waiver of any provision of this Agreement or any other Loan Document
or consent to any departure by the Borrower or any other Loan Party therefrom
shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.  No notice or demand on the Borrower or
Holdings in any case shall entitle the Borrower or Holdings to any other or
further notice or demand in similar or other circumstances.

 

(b)  Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower, Holdings and the Required
Lenders; provided,
however,
that no such agreement shall (i) decrease the principal amount of, or
extend the maturity of or any scheduled principal payment date or date for the
payment of any interest on any Loan or any date for reimbursement of an L/C
Disbursement, or waive or excuse any such payment or any part thereof, or
decrease the rate of interest on any Loan or L/C Disbursement, without the
prior written consent of each Lender affected thereby, (ii) increase or
extend the Commitment or decrease or extend the date for payment of any Fees of
any Lender without the prior written consent of such
Lender, (iii) amend or modify the pro rata requirements of
Section 2.17, the provisions of Section 9.04(j) or the provisions of this
Section, or release any Guarantor or all or substantially all of the
Collateral, without the prior written consent of each Lender, (iv)  change
the provisions of any Loan Document in a manner that by its terms adversely
affects the rights in respect of payments due to Lenders holding Loans of one
Class differently from the rights of Lenders holding Loans of any other Class
without the prior written consent of Lenders holding a majority in interest of
the outstanding Loans and unused Commitments of each adversely affected Class,
(v) modify the protections afforded to an SPC pursuant to the provisions
of Section 9.04(i) without the written consent of such SPC or
(vi) reduce the percentage contained in the definition of the term
“Required Lenders” without the consent of each Lender affected thereby (it
being understood that with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the determination
of the Required Lenders on substantially the same basis as the Term Loan
Commitments and Revolving Credit Commitments are included on the date hereof); provided
further that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, the Collateral Agent,
the Issuing Bank or the

 

82

 

Swingline Lender hereunder or
under any other Loan Document without the prior written consent of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender, as the case may be.

 

SECTION 9.09.  Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and
other amounts which are treated as interest on such Loan or participation in
such L/C Disbursement under applicable law (collectively the “Charges”), shall exceed the maximum lawful
rate (the “Maximum Rate”) which
may be contracted for, charged, taken, received or reserved by the Lender
holding such Loan or participation in accordance with applicable law, the rate
of interest payable in respect of such Loan or participation hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would
have been payable in respect of such Loan or participation but were not payable
as a result of the operation of this Section 9.09 shall be cumulated and
the interest and Charges payable to such Lender in respect of other Loans or
participations or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.

 

SECTION 9.10.  Entire Agreement.  This Agreement, the Fee Letter dated February 17, 2003, as
amended, between the Borrower and the Administrative Agent, and the other Loan
Documents constitute the entire contract between the parties relative to the
subject matter hereof.  Any other
previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement and the other Loan Documents.  Nothing in this Agreement or in the other
Loan Documents, expressed or implied, is intended to confer upon any person
(other than the parties hereto and thereto, their respective successors and
assigns permitted hereunder (including any Affiliate of the Issuing Bank that
issues any Letter of Credit) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Collateral Agent,
the Issuing Bank and the Lenders) any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.

 

SECTION 9.11.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.11.

 

SECTION 9.12.  Severability.  In the event any one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction).  The parties shall endeavor in good-faith

 

83

 

negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

SECTION 9.13.  Counterparts.  This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original but all of which when taken together shall constitute a single
contract, and shall become effective as provided in Section 9.03.  Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.

 

SECTION 9.14.  Headings. 
Article and Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Agreement and are not
to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.

 

SECTION 9.15.  Jurisdiction; Consent to Service of Process.  (a) 
Each of Holdings and the Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court.  Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.  Nothing
in this Agreement shall affect any right that the Administrative Agent, the
Collateral Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or the other Loan Documents
against the Borrower, Holdings or their respective properties in the courts of
any jurisdiction.

 

(b)  Each of Holdings and the Borrower hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Loan Documents in any New York State or
Federal court.  Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

 

(c)  Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in
Section 9.01.  Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

 

SECTION 9.16.  Confidentiality.  (a)  Each of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
agrees to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (i) to its and its Affiliates’ officers,
directors, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (ii) to the extent requested or
required by any regulatory authority or quasi-regulatory authority (such as the
National Association of Insurance Commissioners), (iii) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (iv) in connection with the exercise of any remedies hereunder or
under the other Loan Documents or any suit, action or proceeding

 

84

 

relating to the enforcement of
its rights hereunder or thereunder, (v) subject to an agreement containing
provisions substantially the same as those of this Section 9.16, to
(y) any actual or prospective assignee of or participant in any of its
rights or obligations under this Agreement and the other Loan Documents or
(z) any actual or prospective counterparty (or its advisors) to any swap
or derivative transaction relating to the Borrower or any Subsidiary or any of
their respective obligations, (vi) with the consent of the Borrower,
(vii) to any nationally recognized rating agency that requires access to
information about a Lender’s investment portfolio in connection with ratings
issued with respect to such Lender or (viii) to the extent such Information
becomes publicly available other than as a result of a breach of this
Section 9.16.  For the purposes of
this Section, “Information” shall mean all information received from the
Borrower or Holdings and related to the Borrower or Holdings or their business,
other than any such information that was available to the Administrative Agent,
the Collateral Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to its disclosure by the Borrower or Holdings.  Any person required to maintain the confidentiality of
Information as provided in this Section 9.16 shall be considered to have
complied with its obligation to do so if such person has exercised the same
degree of care to maintain the confidentiality of such Information as such
person would accord its own confidential information.

 

(b)  Notwithstanding anything herein to the
contrary, any party subject to confidentiality obligations hereunder or
otherwise (and any Affiliate thereof and any employee, representative or other
agent of such party or such Affiliate) may disclose to any and all persons,
without limitation of any kind, the U.S. federal income tax treatment and the
U.S. federal income tax structure of the transactions contemplated hereby and
all materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure.  For this purpose, the tax treatment of the
transactions contemplated hereby is the purported or claimed U.S. federal income
tax treatment of such transactions and the tax structure of such transactions
is any fact that may be relevant to understanding the purported or claimed U.S.
federal income tax treatment of such transactions.

 

SECTION 9.17.  Effect of Restatement.  This Agreement shall, except as otherwise
expressly set forth herein, supersede the Existing Credit Agreement from and
after the Restatement Date with respect to the transactions hereunder and with
respect to the Loans and Letters of Credit outstanding under the Existing
Credit Agreement as of the Restatement Date. 
The parties hereto acknowledge and agree, however, that (i) this
Agreement and all other Loan Documents executed and delivered herewith do not
constitute a novation, payment and reborrowing or termination of the
Obligations (except as expressly provided for herein with respect to the
repayment of the Existing Term Loans) under the Existing Credit Agreement and
the other Loan Documents as in effect prior to the Restatement Date,
(ii) such Obligations are in all respects continuing with only the terms
being modified as provided in this Agreement and the other Loan Documents,
(iii) the liens and security interests in favor of the Collateral Agent
for the benefit of the Secured Parties securing payment of such Obligations are
in all respects continuing and in full force and effect with respect to all
Obligations and (iv) all references in the other Loan Documents to the Credit
Agreement shall be deemed to refer without further amendment to this Agreement.

 

85Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

AGREEMENT made as of the 19th day of August, 2003, by and between
Computer Horizons Corp., a New York corporation with offices at 49 Old
Bloomfield Avenue, Mountain Lakes, New Jersey 07046 (hereinafter called the
“Company”), and Kristin R. Evins hereinafter called the “Executive”).

 

W  I  T  N
E  S  S  E  T  H:

 

WHEREAS, the Executive has been employed as Corporate controller of the
Company at various times since her initial employment with the Company on
October 25, 1999; and

 

WHEREAS, the Company desires to continue the employment the Executive
as Corporate Controller of the Company and the Executive is willing to serve
the Company in such capacity; and

 

WHEREAS, the Company and the Executive desire to set forth the terms
and conditions of such employment.

 

NOW THEREFORE, in consideration of the foregoing premises and of the
mutual covenants and agreements herein contained, the Company and the Executive
agree as follows:

 

1.                                       Employment.  The Company hereby agrees to continue to employ
the Executive, and the Executive agrees to continue to be employed by the
Company, on the terms and conditions herein contained.

 

2.                                       Term.  Except as otherwise provided in this
Agreement, the Executive shall be employed under this Agreement for a one year
period commencing on the date hereof (the “Employment Term”).  In the event that the Company does not
intend to renew the Executive’s employment at the end of this Employment Term,
the Company shall notify the Executive of this in writing at least three months
prior to the expiration of this Employment Term.

 

3.                                       Duties.  The Executive shall serve as Corporate
Controller for the company.  In such
capacity the Executive shall report to the Chief Financial Officer of the
Company or his designee, and shall perform such duties and functions,
consistent with her status as a senior executive of the Company, as may be
assigned by the Chief Executive Officer or his designee.  During the Employment Term, the Executive
shall devote substantially all of her business time and her best efforts,
energies, skills and attention to the business and affairs of the Company.  The foregoing shall not limit the
Executive’s rights to be involved in civic or charitable 

 

 

activities and
manage her own personal investments, provided that such activities do not
materially interfere with her providing of her services hereunder.

 

4.                                       Salary and
Bonus.

 

(a)  During the Employment Term,
the Company shall pay the Executive, in accordance with its normal payroll
practices and subject to required withholding, a base salary at the rate of
$100,000 per annum.  The base salary
payable to the Executive hereunder may be increased, but not decreased, from
time to time, in the sole discretion of the Chief Executive Officer, upon the
recommendation of the Chief Financial Officer. 
(The base salary, as it may be increased from time to time, is
hereinafter referred to as the “Base Salary”).

 

(b)  During the Employment Term,
the Executive shall be entitled to receive, in addition to the Base Salary,
such additional compensation, if any, as the Chief Executive Officer may, in
his sole discretion, upon the recommendation of the Chief Financial Officer,
award the Executive.  Appended hereto is
Exhibit A describing the Executive’s 2003 Compensation Plan.

 

5.                                       Other
Compensation and Benefits.  During
the Employment Term, the Executive shall be entitled to:

 

(a)                                  participate
in all benefit, pension, retirement, deferred compensation, savings, welfare
and other employee benefit plans and policies in which members of the Company’s
senior management generally are entitled to participate (collectively, the
“Benefit Plans”), in accordance with their respective terms as in effect from
time to time;

 

(b)                                 receipt
of all fringe benefits and perquisites maintained by the Company from time to
time for members of senior management generally, in accordance with the
policies of the Company with regard to such benefits and perquisites as in
effect from time to time;

 

(c)                                  vacation
each year in accordance with the Company’s policies for members of senior
management generally as in effect from time to time;

 

(d)                                 such
other compensation, if any, as the Company may, in its sole discretion, award
to the Executive.

 

6.                                       Death
Prior to Termination of Employment. 
If the Executive shall die during the Employment Term, the Company shall
have no liability or further obligation except as follows:

 

(a)                                  The
Company shall pay the Executive’s estate or designated beneficiaries, as
applicable, when otherwise due, any unpaid Base Salary for the period prior to
the Executive’s death, any declared or awarded but unpaid bonuses, whether
pursuant to any bonus plan or otherwise, any unpaid amounts due under any
incentive plan in accordance with its terms, and any other unpaid amounts due
the Executive under any other Benefit Plans in accordance with the terms of
such Benefit Plans (collectively, the “Entitlements”).

 

2

 

(b)                                 The
Executive’s estate or designated beneficiaries, as applicable, shall have such
rights, if any, under the Benefit Plans and all other employee benefit, fringe
benefit or incentive plans maintained or offered by the Company as may be
provided in such plans and any grants to the Executive thereunder in accordance
with their respective terms (collectively, the “Rights”).

 

7.                                       Termination
Due to Disability.  If the Executive
shall become physically or mentally incapable of performing her duties as
provided in Section 3 of this Agreement and such incapacity shall last for
a period of at least one hundred eighty (180) consecutive days, the Company
may, at its election any time thereafter while the Executive remains incapable
of performing her duties hereunder, terminate the Executive’s employment
hereunder, effective immediately, by giving the Executive written notice of
such termination.  In such event, the
Company shall have no other obligation to the Executive or her dependents
hereunder other than the obligation to pay or provide the Entitlements and the
Rights.

 

8.                                       Termination
for Cause.  The Company may
terminate the Executive’s employment hereunder for Cause by giving the
Executive ten days’ written notice of such termination.  For purposes of this Agreement, Cause shall
mean: (a) the Executive’s embezzlement, willful breach of fiduciary duty or
fraud with regard to the Company or any of its assets for businesses, (b) the
Executive’s conviction of, or pleading of nolo  contendere with
regard to, a felony (other than a traffic violation) or any other crime
involving moral turpitude with regard to the Company or any of its assets or
businesses, or (c) any other breach by the Executive of a material provision of
this Agreement that remains uncured for thirty (30) days after written notice
thereof is given to the Executive.  In
such event, the Company shall have no obligation to the Executive or her
dependents other than to pay, when otherwise due, any unpaid Base Salary for
the period prior to such termination and pay or provide the Rights.  In addition, the Company shall be entitled
to exercise all rights and remedies against the Executive that it may have
under applicable law.

 

9.                                       Termination
for Good Reason.  The Executive may
terminate her employment hereunder for Good Reason upon written notice thereof
to the Company.  For purposes of this
Agreement, “Good Reason” shall mean the occurrence or failure to cause the
occurrence (as applicable) of any of the following events without the
Executive’s express prior written consent: (a) any material demotion of the
Executive, any material reduction in the Executive’s authority or
responsibility or any other material change in the terms of the Executive’s
employment which is inconsistent with Section 3 hereof; (b) the failure of
any successor or assign of the Company (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to assume specifically the
obligations of the Company hereunder in accordance with Section 17 of this
Agreement; (c) any breach by the company of any material provision of this
Agreement that is not cured by the Company within 30 days after written notice
thereof from the Executive; or (d) if a Change of Control has occurred, either
(i) assuming that the Company’s finances permit cash bonuses to be paid to any
executive, the failure to provide the Executive with a cash bonus for each
fiscal year of the Company ending during the Employment Term and after the
Change of Control at least equal to the highest bonus earned by, or awarded to,
the Executive in respect of any fiscal year of the Company ending prior to the 

 

3

 

Change of Control or, if
higher, the fiscal year in which such Change of Control occurs, or (ii) the
failure by the Company to continue in effect any Benefit Plan in which the
Executive or any of her dependents is participating immediately prior to such
Change of Control or plans or arrangements that in the aggregate provided the
Executive with substantially similar benefits, or the taking of any action by
the Company that would adversely affect the Executive’s or her dependent’s
participation in, or reduce the Executive’s or her dependent’s benefits under,
any of such Benefit Plans or arrangements or the replacements thereof,
providing that the foregoing shall not limit the Company’s right to make changes
in such plans to comply with applicable laws or otherwise, provided that the
Company shall otherwise compensate the Executive of any loss (including but not
limited to tax benefits) to the Executive as a result of such changes.

 

10.                                 Consequences
of Termination of Employment by the Executive for Good Reason or by the Company
Without Cause.  Subject to
Section 12 hereof, in the event the Executive terminates his employment
for Good Reason pursuant to Section 9 hereof or the Company terminates the
Executive’s employment other than for Cause or Disability, then the Company
shall be deemed to have breached this Agreement, and the Executive shall be
entitled to exercise all rights and remedies that she may have hereunder and
under applicable law.  Without limited
the generality of the preceding sentence, the Company shall in any event pay to
the Executive, the following: (a) the Separation Rights as described in
Section 12 hereof; (b) the Entitlements, and (c) the Rights, all within
five (5) days of the date of termination of employment.

 

11.                                 Consequences
of Termination of Employment by the Executive without Good Reason.  If Executive’s employment hereunder is
terminated by the Executive without Good Reason, the Company shall have no
other obligations to the Executive hereunder other than the obligation to pay
or provide the Entitlements and the Rights.

 

12.                                 Change
of Control.

 

(a) Subject to Subsection 12(b) hereof, and only if, a change of
Control of the Company shall occur and either (i) the Executive continues to be
employed by the Company through the end of the Employment Term or (ii) after
such Change of Control the Executive terminates her employment for Good Reason
or the Company terminates the Executive’s employment other than for Cause or
Disability, then the Executive shall be entitled to receive from the Company
(without limiting any additional rights that she may have under applicable law
in the case of termination prior to the expiration of the Employment Term),
within five (5) days after the expiration of the Employment Term (whether or
not the Executive is then employed by the Company) or the termination of the
Executive’s employment (as applicable), a lump sum payment equal to any sum
remaining on the term of the then current employment contract, but not less
than one year of the executive’s base salary (the “Separation Rights”).  The Company shall also provide the
Rights.  In the event that the change of
control occurs coterminous with the notice of contract renewal, and the
acquiring entity gives timely notice of non-renewal, then the Executive shall
be entitled to the payment of twelve months severance commencing upon
expiration of the employment contract, in addition to the Entitlements and the
Rights as noted above.

 

4

 

(b)  Notwithstanding anything
else herein, to the extent the Executive would be subject to the excise tax
under Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), on the amounts in Section 2(a) above and such other amounts or
benefits he received from the Company and required to be included in the
calculation of parachute payments for purposes of Sections 280G and 4999 of the
Code, the amounts provided under this Agreement shall be automatically reduced
to an amount one dollar less than the amount that, when combined with such
other amounts and benefits required to be so included, would subject the
Executive to the excise tax under Section 4999 of the Code if, and only
if, the reduced amount received by the Executive would be greater than the
unreduced amount to be received by the Executive minus the excise tax payable
under Section 4999 of the Code on such amount and the other amounts and
benefits received by the Executive and required to be included in the calculation
of a parachute payment for purposes of Section 280G and 4999 of the Code.

 

(c)  For purposes of this
Agreement, a “Change of Control” shall be deemed to have occurred if: (i) any
person (as defined in Section 3(a)(9) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and as used in Section 13(d) and
14(d) thereof), excluding the Company, any Subsidiary and any employee benefit
plan sponsored or maintained by the Company or any Subsidiary (including any
trustee of any such plan acting in his capacity as trustee), but including a
“group” as defined in Section 13(d)(3) of the Exchange Act, becomes the
beneficial owner of shares of the Company having at least 20% of the total
number of votes that may be cast for the election of directors of the Company;
(ii) the shareholders of the Company shall approve any merger or other business
combination of the Company, sale of all or substantially all of the Company’s
assets or combination of the foregoing transactions (a “Transaction”), other
than a Transaction involving only the Company and one or more of its
Subsidiaries, or a Transaction immediately following which the shareholders of
the Company immediately prior to the Transaction continue to have a majority of
the voting power in the resulting entity (excluding for this purpose any
shareholder owning directly or indirectly more than 10% of the shares of the
other company involved in the Transaction), or (iii) within any 24 month period
beginning on or after the date hereof, the persons who were directors of the
Company immediately before the beginning of such period (the “Incumbent
Directors”) shall be deemed to be an Incumbent Director if such director was
elected to the Board by, or on the recommendation of or with the approval of,
at least two-thirds of the directors who then qualified as Incumbent Directors
either actually or by prior operation of this Section 12(b) unless such
election, recommendation or approval was the result of an actual or threatened
election contest of the type contemplated by Regulation 14a-11 promulgated
under the Exchange Act or any successor provision.  Notwithstanding the foregoing, no Change of Control of the
Company shall be deemed to have occurred for purposes of this Agreement by
reason of any actions or events in which the Executive participates in a
capacity other than in his capacity as an executive or director of the Company,
provided that the Executive’s voting or tendering, exchanging or otherwise
disposing of any or all his shares of the Company’s capital stock shall not be
deemed participation.  For purposes of
this Section 12(b), “Subsidiary” shall mean any 

 

5

 

entity in which the Company
owns, directly or indirectly, at least 50% of the outstanding securities
generally entitled to vote for the election of directors.

 

13.                                 Non-Competition;
Confidential Information.

 

(a)  The Executive agrees that,
if she terminates her employment without Good Reason (except pursuant to
Section 12) hereunder or he is terminated for Cause, he will not, for a
period of one year after such termination of employment with the Company, in
any manner, directly or indirectly (or have a substantial ownership in, manage,
operate, or control any entity which shall directly or indirectly): (i)
perform, or cause to be performed, or solicit or aid, in any manner,
solicitation of, any work of a type performed by the Company for any firm,
corporation, or other entity (“Customer”) with which, at any time during the
twelve (12) month period prior to termination of the Employment Period, the
Executive, on behalf of the Company or any Subsidiary, conducted any business,
or (ii) induce any personnel to leave the service of the Company or of any
Subsidiary thereof.

 

(b)  The Executive shall hold in
a fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses: (i) obtained by the Executive
during her employment by the Company or any of its affiliated companies and
(ii) not otherwise public knowledge or known within the Company’s
industry.  After termination of the
Executive’s employment with the Company, the Executive shall not, without the
prior written consent of the Company, unless compelled pursuant to the order of
a court or other body having jurisdiction over such matter or upon the advice
of counsel, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it.

 

(c)  The Executive agrees that
the remedy at law for any breach by her of the foregoing shall be inadequate
and that the Company shall be entitled to injunctive relief.  This Section constitutes an independent
and separable covenant that shall be enforceable notwithstanding any right or
remedy that the Company may have under any other provision of this Agreement or
otherwise.

 

14.                                 Garnishment.  The benefits payable under this Agreement
shall not be subject to garnishment, execution or levy of any kind, and any
attempt to cause any benefits to be so subjected shall not be recognized.

 

15.                                 Notice.  Any notice or any other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, or sent by certified mail, return receipt requested, by Federal
Express, Express Mail or similar overnight delivery or courier service, or by
telecopy, answerback received.  Notice
to the Executive shall be delivered to her address set forth the head of this
Agreement, and notice to the Company shall be sent as follows:

 

Office of the General Counsel

 

6

 

Computer Horizons Corp.

49 Old Bloomfield Avenue

Mountain Lakes, New Jersey 07096

 

Any notice given by certified mail shall be deemed given five days
after the time of certification thereof. 
Any notice given by other means permitted by this Section 13 will
be deemed given at the time of receipt thereof.

 

Any party may by notice given in accordance with this Section to
the other parties, designate another address or person for receipt of notices
hereunder.

 

16.                                 Applicable
Law.  This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of New Jersey without reference to its conflict of law provisions.

 

17.                                 Successors;
Binding Agreement.  The Company
shall require any successor (whether direct or indirect, by purchase of stock
or assets, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, expressly to assume and agree, in a
written instrument in form and substance satisfactory to the Executive and her
counsel, to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place.  Notwithstanding anything
herein to the contrary, this Agreement may not be assigned by the Company
without prior written consent of the Executive.  This Agreement shall inure to the benefit of, and be enforceably
by, the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.  This Agreement is personal to the Executive
and neither this Agreement nor any rights hereunder may be assigned by the
Executive.

 

18.                                 No
Mitigation; No Set-Off.  The Company
agrees that if the Executive’s employment with the Company is terminated during
the Employment Term for any reason whatsoever, the Executive is not required to
seek other employment or to attempt in any way to reduce any amounts payable to
the Executive by the Company pursuant to this Agreement.  Further, the amount of any payment or
benefit provided for in this Agreement shall not be reduced by any compensation
earned by the Executive or benefit provided to the Executive as the result of
employment by another employer or otherwise.

 

19.                                 Miscellaneous.  No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Executive and such officer of the
Company as may be specifically designated by the Board of Directors of the
Company.  No waiver by either party
hereto of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.  This Agreement constitutes the
entire Agreement between the parties hereto pertaining to the subject matter
hereof.  No agreements or
representations, oral or otherwise, express or 

 

7

 

implied, with respect to the
subject matter hereof have been made by either party which are not expressly
set forth in this Agreement.

 

20.                                 Counterparts.  This Agreement may be executed in several
counterparts each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

21.                                 Separability.  If any provisions of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity
or unenforceability shall not affect the remaining provisions hereof which
shall remain in full force and effect.

 

22.                                 Non-Exclusivity
of Rights.  Nothing in this
Agreement shall prejudice, prevent or limit the Executive’s previously vested
rights under, or continuing or future participation in, any benefit, bonus,
incentive, equity or other plan or program provided by the Company and for
which the Executive may qualify, nor shall anything herein limit or otherwise
prejudice such rights as the Executive may have under any other currently
existing plan or agreement regarding severance from employment with the Company
or statutory entitlements.

 

23.                                 Beneficiary.  The Executive shall be entitled to select
(and change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Employment Agreement following his death by giving the Company written notice
thereof in accordance with the applicable Company Policies.  In the event the Executive's death or a
judicial determination or her incompetence, reference in this Agreement to the
Executive shall be deemed, where appropriate, to refer to his beneficiary
estate or other legal representative.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Executive has hereunto set his hand as of the date first set
forth above.

 

	
   

  	
  COMPUTER HORIZONS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael J.
  Shea        8/19/03

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kristin R.
  Evins        8/19/03

  	
   

  
	
   

  	
   

  	
  Kristin R. Evins

  	
   

  

 

8

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