Document:

Prepared by MERRILL CORPORATION

EXHIBIT 10.46

 

 

 

 

BMC INDUSTRIES, INC.

$185,000,000

SECOND AMENDMENT AND RESTATEMENT AGREEMENT

dated as of October 12, 2001

BANKERS TRUST

COMPANY,

as Administrative Agent

BANK ONE, NA,

as Documentation Agent

and

VARIOUS LENDING

INSTITUTIONS

 

 

 

 

TABLE OF CONTENTS

 

	

  ARTICLE

  I

  
	

  1.1    Defined

  Terms.

  
	

  1.2    Accounting

  Terms, Financial Statements.

  
	

  1.3    Other

  Definitional Terms.

  
	

  ARTICLE

  II

  
	

  2.1    The

  Commitments.

  
	

  (a)    Term

  Loans.

  
	

  (b)    Revolving

  Loans.

  
	

  (c)    Swing

  Line Loans.

  
	

  2.2    Notes.

  
	

  (a)    Evidence

  of Indebtedness.

  
	

  (b)    Notation

  of Payments.

  
	

  2.3    Minimum

  Amount of Each Borrowing; Maximum Number of Borrowings.

  
	

  2.4    Borrowing

  Options.

  
	

  2.5    Notice

  of Borrowing.

  
	

  2.6    Conversion

  or Continuation.

  
	

  2.7    Disbursement

  of Funds; Funding Assumptions.

  
	

  2.8    Pro

  Rata Borrowings.

  
	

  2.9    Amount

  and Terms of Letter of Credit.

  
	

  (a)    Letter

  of Credit Commitments, Terms of Letters of Credit.

  
	

  (b)    Procedure

  for Issuance of Letters of Credit.

  
	

  (c)    Draws

  upon Letters of Credit; Reimbursement Obligation.

  
	

  (d)    Lenders’

  Participation in Letters of Credit.

  
	

  (e)    Fees

  for Letters of Credit.

  
	

  (f)    LC

  Obligations Unconditional.

  
	

  (g)    Indemnification.

  
	

  (h)    Stated

  Amount.

  
	

  ARTICLE III

  
	

  3.1    Interest.

  
	

  (a)    Base

  Rate Loans.

  
	

  (b)    Eurodollar

  Loans.

  
	

  (c)    Payment

  of Interest.

  
	

  (d)    Notification

  of Rate.

  
	

  (e)    Default

  Interest.

  
	

  (f)    Maximum

  Interest.

  
	

  3.2    Fees.

  
	

  (a)    Commitment

  Fee.

  
	

  (b)    Agency

  Fees.

  
	

  3.3    Computation

  of Interest and Fees.

  
	

  3.4    Interest

  Periods.

  
	

  3.5    Compensation

  for Funding Losses.

  
	

  3.6    Increased

  Costs, Illegality, Etc.

  
	

  (a)    Generally.

  
	

  (b)    Eurodollar

  Loans.

  
	

  (c)    Capital

  Requirements.

  
	

  (d)    Change

  of Lending Office.

  
	

  3.7    Replacement

  of Affected Lenders.

  
	

  ARTICLE

  IV

  
	

  4.1    Voluntary

  Reduction of Commitments.

  
	

  4.2    Voluntary

  Prepayments.

  
	

  4.3    Mandatory

  Prepayments.

  
	

  (a)    Prepayment

  Upon Overadvance.

  
	

  (b)    Payment

  at Termination Date.

  
	

  (c)    Mandatory

  Prepayment Upon Asset Disposition.

  
	

  (d)    Mandatory

  Prepayment Upon Incurrence of Indebtedness.

  
	

  (e)    Scheduled

  Term Repayments.

  
	

  (f)    Mandatory

  Prepayment With Excess Cash Flow.

  
	

  4.4    Application

  of Prepayments.

  
	

  4.5    Method

  and Place of Payment.

  
	

  4.6    Net

  Payments.

  
	

  ARTICLE

  V

  
	

  5.1    Corporate

  Existence; Compliance with Law.

  
	

  5.2    Corporate

  Power; Authorization; No Violation.

  
	

  5.3    Binding

  Effect.

  
	

  5.4    Purpose

  of Loans.

  
	

  5.5    Subsidiaries.

  
	

  5.6    Indebtedness.

  
	

  5.7    Financial

  Statements; Financial Condition; Undisclosed Liabilities; Projections, etc.

  
	

  (a)    Financial

  Statements.

  
	

  (b)    Solvency.

  
	

  (c)    No

  Undisclosed Liabilities.

  
	

  (d)    Projections.

  
	

  5.8    No

  Material Litigation.

  
	

  5.9    Performance

  of Agreements.

  
	

  5.10    Taxes.

  
	

  5.11    Governmental

  Regulation.

  
	

  5.12    Ownership

  of Property; Liens.

  
	

  5.13    Intellectual

  Property.

  
	

  5.14    Disclosure.

  
	

  5.15    ERISA.

  
	

  5.16    Labor

  Relations.

  
	

  5.17    Insurance.

  
	

  5.18    Public

  Utility Holding Company Act.

  
	

  5.19    Security

  Documents.

  
	

  (a)    Security

  Agreement Collateral.

  
	

  (b)    Real

  Estate Collateral.

  
	

  ARTICLE

  VI

  
	

  6.1    Conditions

  Precedent to Effectiveness.

  
	

  (a)    Loan

  Documents.

  
	

  (b)    Corporate

  Proceedings.

  
	

  (c)    Corporate

  Documents.

  
	

  (d)    Incumbency

  Certificate.

  
	

  (e)    Fees

  and Amendment Fee.

  
	

  (f)    Legal

  Opinions.

  
	

  (g)    Approvals.

  
	

  (h)    Litigation.

  
	

  (i)    Officer’s

  Certificate.

  
	

  (j)    Adverse

  Change.

  
	

  6.2    Certain

  Conditions Precedent to Each Loan.

  
	

  (a)    Representations

  and Warranties.

  
	

  (b)    No

  Events of Default.

  
	

  (c)    Available

  Revolving Commitment.

  
	

  (d)    Other

  Matters.

  
	

  ARTICLE VII

  
	

  7.1    Financial

  Statements.

  
	

  7.2    Certificates;

  Other Information.

  
	

  (a)    Accountant’s

  Certificates.

  
	

  (b)    Officer’s

  Certificate.

  
	

  (c)    Budgets;

  Projections.

  
	

  (d)    Audit

  Reports and Statements.

  
	

  (e)    Public

  Filings.

  
	

  (f)    Status.

  
	

  (h)    Other

  Requested Information

  
	

  7.3    Notices.

  
	

  (a)    Event

  of Default or Unmatured Event of Default.

  
	

  (b)    Litigation

  and Related Matters.

  
	

  (c)    Notice

  of Change of Control.

  
	

  7.4    Conduct

  of Business and Maintenance of Existence.

  
	

  7.5    Payment

  of Obligations.

  
	

  7.6    Inspection

  of Property, Books and Records.

  
	

  7.7    ERISA.

  
	

  7.8    Insurance.

  
	

  7.9    Environmental

  Laws.

  
	

  7.10    Additional

  Subsidiary Guarantors.

  
	

  7.11    Intentionally

  Omitted.

  
	

  7.12    Additional

  Security; Further Assurances.

  
	

  (b)    Additional

  Subsidiary Guarantors.

  
	

  (c)    Pledge

  of New Subsidiary Stock.

  
	

  (d)    Grant

  of Security by New Domestic Subsidiaries.

  
	

  (e)    Documentation

  for Additional Security.

  
	

  (f)    Foreign

  Subsidiaries Security.

  
	

  ARTICLE VIII

  
	

  8.1    Financial

  Condition Covenants.

  
	

  (a)    Maintenance

  of Consolidated Net Worth.

  
	

  (b)    Leverage

  Ratio.

  
	

  (c)    Interest

  Coverage Ratio.

  
	

  (d)    Capital

  Expenditures.

  
	

  8.2    Indebtedness.

  
	

  8.3    Liens.

  
	

  8.4    Fundamental

  Changes.

  
	

  8.5    Restricted

  Payments.

  
	

  8.6    Distributions

  from Subsidiaries.

  
	

  8.7    Sales

  of Assets and Subsidiary Stock.

  
	

  8.8    Investments.

  
	

  8.9    Transactions

  with Affiliates.

  
	

  8.10    Sale-Leasebacks.

  
	

  8.11    Fiscal

  Year.

  
	

  8.12    Amendments

  to Organizational Documents.

  
	

  8.13    Accounting

  Changes.

  
	

  8.14    Lines

  of Business.

  
	

  ARTICLE

  IX

  
	

  9.1    Events

  of Default.

  
	

  (a)    Failure

  to Make Payments When Due.

  
	

  (b)    Representations.

  
	

  (c)    Breach

  of Certain Covenants.

  
	

  (d)    Other

  Defaults Under Agreement or Loan Documents.

  
	

  (e)    Default

  Under Other Agreements.

  
	

  (f)    Judgments.

  
	

  (g)    Voluntary

  Insolvency, Etc.

  
	

  (h)    Involuntary

  Insolvency, Etc.

  
	

  (i)    Unenforceability.

  
	

  (j)    ERISA.

  
	

  (k)    Change

  of Control.

  
	

  (l)    Environmental

  Default.

  
	

  (m)    Security

  Documents.

  
	

  9.2    Rescission

  of Acceleration.

  
	

  9.3    Rights

  Not Exclusive.

  
	

  ARTICLE

  X

  
	

  10.1    Appointment

  and Authorization.

  
	

  10.2    Nature

  of Duties.

  
	

  10.3    Liability

  of Agent.

  
	

  10.4    Reliance

  by Agent.

  
	

  10.5    Notice

  of Default.

  
	

  10.6    Credit

  Decision.

  
	

  10.7    Indemnification.

  
	

  10.8    Agent

  in Individual Capacity.

  
	

  10.9    Resignation

  by Agent.

  
	

  10.10    Documentation

  Agent.

  
	

  ARTICLE

  XI

  
	

  11.1    No

  Waiver; Modifications in Writing.

  
	

  11.2    Intentionally

  omitted.

  
	

  11.3    Notices,

  Etc.

  
	

  11.4    Costs,

  Expenses and Taxes; Indemnity.

  
	

  (a)    Generally.

  
	

  (b)    Indemnification.

  
	

  11.5    Confirmations.

  
	

  11.6    Transfer

  of Notes.

  
	

  11.7    Adjustments;

  Setoff.

  
	

  11.8    Execution

  in Counterparts.

  
	

  11.9    Binding

  Effect; Assignment; Addition and Substitution of Lenders.

  
	

  11.10    CONSENT

  TO JURISDICTION; MUTUAL WAIVER OR JURY TRIAL.

  
	

  11.11    Governing

  Law.

  
	

  11.12    Registry.

  
	

  11.13    Severability

  of Provisions.

  
	

  11.14    Headings.

  
	

  11.15    Independent

  Nature of Lenders’ Rights.

  
	

  11.16    Survival

  of Representations.

  
	

  11.17    Confidentiality.

  
	

  11.18    Effectiveness.

  
	

  11.19    Waiver

  of Immunities.

  
	

  11.20    Concerning

  the Collateral and the Loan Documents.

  
	

  (a)    Authority.

  
	

  (b)    Release

  of Collateral.

  
	

  (c)    No

  Obligation.

  

 

Schedules

Schedule 2.1(a)                     --             Converted Term Loan Amounts

Schedule 2.1(b)                     --             Revolving Commitments

Schedule 2.1(c)                     --             Aggregate Converted Term Loan

Amount

Schedule 5.5                          --             Subsidiaries

Schedule 5.6                          --             Indebtedness

Schedule 5.7(c)                     --             Liabilities

Schedule 5.7(d)                     --             Projections

Schedule 5.8                          --             Litigation

Schedule 6.1(o)                     --             Waiver of Acquisition Agreement Terms

Schedule 8.2(c)                     --             Outstanding Subsidiary Indebtedness

Schedule 8.3                          --             Permitted Liens

Schedule 8.6(a)                     --             Certain Restrictions

Schedule 11.3                        --             Addresses for Notice; Payment and

Lending Offices

Exhibits

Exhibit 2.1(b)(iii)                   --             Form of Swing Line Loan

Participation Certificate

Exhibit 2.2(a)-1                      --             Form of Term Note

Exhibit 2.2(a)-2                      --             Form of Revolving Note

Exhibit 2.2(a)-3                      --             Form of Swing Line Note

Exhibit 2.5                              --             Form of Notice of Borrowing

Exhibit 2.6                              --             Form of Notice of Conversion or

Continuation

Exhibit 2.9                              --             Form of Letter of Credit Report

Exhibit 4.6(d)                         --             Form of Section 4.6(d)(ii)

Certificate

Exhibit 6.1(a)(iii)(x)               --             Form of Borrower Security Agreement

Exhibit 6.1(a)(iii)(y)               --             Form of Subsidiary Guarantor

Security Agreement

Exhibit 6.1(a)(iv)                   --             Form of Pledge Agreement

Exhibit 6.1(a)(v)                    --             Form of Subsidiary Guarantee Agreement

Exhibit 6.1(a)(vi)(i)                --             Form of Mortgage

Exhibit 6.1(a)(vi)(ii)(1)          --             Certain

Mortgage-Related Exceptions

Exhibit 6.1(a)(vi)(ii)(2)          --             Form of

Mortgage Policy

Exhibit 6.1(f)(i)                      --             Form of Opinion of Borrower’s

outside counsel

Exhibit 6.1(f)(ii)                     --             Form of Opinion of Borrower's

general counsel

Exhibit 6.1(i)                          --             Form of Officer’s Certificate

Exhibit 7.2(b)                         --             Form of Certificate of Financial

Officer

Exhibit 11.9                            --             Form of Assignment and Assumption

Agreement

Exhibit 11.10                          --             Form of Term Loan Conversion Notice

 

SECOND AMENDMENT AND RESTATEMENT AGREEMENT

THIS AMENDMENT TO

THAT CERTAIN FIRST AMENDED AND RESTATED CREDIT AGREEMENT (the "Second

Amendment and Restatement Agreement"), dated as of October 12, 2001,

among BMC Industries, Inc., a Minnesota corporation (“Borrower”), the

several banks and other financial institutions set forth on the signature pages

hereto, BANKERS TRUST COMPANY, a New York banking corporation, as

administrative agent for the Lenders hereunder (in such capacity, the “Agent”)

and as a Lender, and Bank One, NA, as Documentation Agent and a Lender.

W I T N

E S S E T H:

WHEREAS, Borrower,

Agent and NBD Bank, as Documentation Agent, have entered into that certain

Credit Agreement dated as of May 15, 1998 (the “Original Credit Agreement”)

providing for revolving credit facilities for working capital and other

corporate purposes to Borrower as the same was amended and restated as of June

25, 1998 (as the same was previously amended prior to the date hereof, the “First

Amended and Restated Credit Agreement”);

WHEREAS, the

parties hereto wish to amend the First Amended and Restated Credit Agreement in

the manner set forth in each corresponding or new section below to (i) convert

certain outstanding Revolving Loans thereunder to term loans with a

corresponding permanent reduction in the Revolving Commitment; and (ii) to

further permanently reduce the Revolving Commitment by $35,000,000 and to make

certain other modifications as set forth below;

NOW, THEREFORE, in

consideration of the premises and of the mutual covenants herein contained, the

parties hereto agree that the First Amended and Restated Credit Agreement is

hereby further amended by the modifications or additions in each corresponding

or new section, schedule or exhibit set forth below:

ARTICLE

I

 

DEFINITIONS

1.1           Defined Terms. 

As used in this Agreement, the following terms shall have the following

meanings, such meanings to be equally applicable to both the singular and

plural forms of the terms defined:

“1997 Expansion

Charge”: an amount equal to (i) $6,400,000 from the Restatement Date to

June 30, 1998, (ii) $3,100,000 from July 1, 1998 to September 30, 1998 and

(iii) $0 after September 30, 1998.

“Acquisition”: any

transaction or series of related transactions for the purpose of or resulting,

directly or indirectly, in (a) the acquisition of all or substantially all of

the assets of a Person, or of any business or division of a Person,

(b) the acquisition of in excess of 50% of the capital stock, partnership

interests, membership interests or equity of any Person, or otherwise causing

any Person to become a Subsidiary, or (c) a merger or consolidation or any

other combination with another Person (other than a Person that is a Subsidiary)

provided that the Borrower or the Subsidiary is the surviving entity.

 “Additional Security Documents”: all

mortgages, pledge agreements, security agreements and other security documents

entered into pursuant to Section 7.12 and the Security Agreement.

“Adjusted Working

Capital”: the difference between (i) Consolidated Current Assets and (ii)

Consolidated Current Liabilities excluding from Consolidated Current

Liabilities all short-term borrowings, the current portion of long-term

indebtedness and the current portion of Capitalized Lease Obligations.

“Adjustment Date”:

the earlier of (i) the second Business Day after receipt by Agent of the

financial statements required to be delivered by Borrower pursuant to Section 7.1

and (ii) the date five days after notice from Agent to Borrower that

Borrower has failed to deliver such financial statements; provided that if an

Adjustment Date pursuant to clause (ii) occurs, the date which is the Second

Business Day after Agent does receive such financial statements shall also be

an Adjustment Date.

“Agent”:

as defined in the preamble.

“Agents”: the

Agent and the Documentation Agent.

“Affiliate”: with

respect to any Person, any Person or group acting in concert in respect of the

Person in question that, directly or indirectly, controls or is controlled by

or is under common control with such Person. 

For the purposes of this definition, “control” (including, with

correlative meanings, the terms “controlled by” and “under common control

with”) shall mean the possession, directly or indirectly, of the power to

direct or cause the direction of management and policies of a Person, whether

through the ownership of voting securities or by contract or otherwise.

“Agent–Related

Persons”: as defined in Section 10.3.

“Aggregate Commitment”:

the sum of (a) the Total Revolving Commitment, and (b) the aggregate

outstanding Term Loans of the Term Lenders.

“Aggregate

Consideration”: the aggregate value of all cash, securities and other

property paid in connection with an Acquisition, including all Indebtedness of

the acquired Person repaid or assumed, directly or indirectly (by operation of

law or otherwise) in connection with the Acquisition.

"Aggregate

Converted Term Loan Amount" 

means the sum of the Converted Term Loan Amounts of all Converting

Lenders on the Restatement Date.

“Agreement”: this

Agreement, as amended, supplemented or otherwise modified from time to time.

 “Applicable Commitment Fee”: at any

date, the applicable percentage amount of the aggregate Revolving Commitments

of the Lenders as such percentage amount is set forth in the table below based

upon the Most Recent Ratio of Consolidated Debt to Consolidated EBITDA on such

date, provided that until the date Borrower delivers the financial statements

for the fiscal quarter ended September 30, 2001, the Applicable Commitment Fee

shall not be less than .500%:

 

	

  Most Recent Ratio of Consolidated 

  Debt to Consolidated EBITDA

  	

   

  	

  Applicable 

  Commitment

  Fee

  
	

  Less than or equal to

  2.75 to 1.0

  	

   

  	

  .375%

  
	

  Less than or equal to

  3.00 to 1.0 but 

  greater than 2.75 to 1.0

  	

   

  	

  .425%

  
	

  Less than or equal to

  3.25 to 1.0 but 

  greater than 3.00 to 1.0

  	

   

  	

  .475%

  
	

  Less than or equal to

  3.50 to 1.0 but 

  greater than 3.25 to 1.0

  	

   

  	

  .500%

  
	

  Greater than 3.50 to

  1.0

  	

   

  	

  .500%

  

 

 

“Applicable Margin”:

with respect to each Loan at any date shall be the applicable percentage amount

set forth in the table below based upon the Type of such Loan and the Most

Recent Ratio of Consolidated Debt to Consolidated EBITDA on such date, provided

that until the date Borrower delivers the financial statements for the fiscal

quarter ended September 30, 2001, the Applicable Margin for Eurodollar Loans

shall not be less than 3.000% and the Applicable Margin for Base Rate Loans

shall not be less than 2.000%: 

	

  Most Recent Ratio of 

  Consolidated Debt to 

  Consolidated EBITDA

  	

   

  	

  Eurodollar Loans

  	

   

  	

  Base 

  Rate 

  Loans

  
	

  Less than or equal to

  2.75 to 1.0

  	

   

  	

  1.500%

  	

   

  	

  0.500%

  
	

  Less than or equal to

  3.00 to 1.0 

  but greater than 2.75 to 1.0

  	

   

  	

  1.750%

  	

   

  	

  0.750%

  
	

  Less than or equal to

  3.25 to 1.0 

  but greater than 3.00 to 1.0

  	

   

  	

  2.250%

  	

   

  	

  1.250%

  
	

  Less than or equal to

  3.50 to 1.0 

  but greater than 3.25 to 1.0

  	

   

  	

  2.750%

  	

   

  	

  1.750%

  
	

  Greater than 3.50 to

  1.0

  	

   

  	

  3.000%

  	

   

  	

  2.000%

  

 

 

“Asset

Acquisition”: the purchase by Borrower of the assets of the Orcolite

business unit, an operating division of the Monsanto Corporation in 1998.

“Asset

Acquisition-Related and Other Special Charges”: means charges taken in 1998

for accounting purposes in connection with the Asset Acquisition to reflect

write-offs, costs, expenses or other charges related to the Asset Acquisition

and other special non-recurring non cash accounting charges (provided that no

more than $2,000,000 may be cash severance payments) in 1998 not to exceed

$65,000,000 in the aggregate.

“Asset Disposition”:

any sale, lease, transfer or other disposition (or series of related sales,

leases, transfers or dispositions) of shares of Capital Stock of a Subsidiary

of Borrower (other than directors’ qualifying shares), property or other assets

(each referred to for the purposes of this definition as a “disposition”) by

Borrower or any of its Subsidiaries the fair market value of which, as

determined in good faith by the board of directors of Borrower or such

Subsidiary, as the case may be, exceeds $1,000,000 (other than (i) a disposition

by a Subsidiary to Borrower or by Borrower or a Subsidiary to a Wholly-Owned

Subsidiary, (ii) a disposition of property or other assets at fair market value

in the ordinary course of business, including non-exclusive licenses to use

trademarks, trade names or other similar property of Borrower or its

Subsidiaries and (iii) a disposition of obsolete property or other assets in

the ordinary course of business).

“Assignee”: an

Eligible Assignee which is an “Assignee” party to an Assignment and Assumption

Agreement pursuant to Section 11.9.

“Assignment and

Assumption Agreement”: an Assignment and Assumption Agreement substantially

in the form of Exhibit 11.9 annexed hereto and made a part hereof made

by any applicable Lender, as assignor and such Lender’s assignee in accordance

with Section 11.9, with such modifications (including, without

limitation, additional representations, warranties and covenants by the

assignor Lender or assignee Lender) as such assignor Lender and assignee Lender

may agree to from time to time which solely affect the relative rights and/or

obligations of the assignor Lender and assignee Lender as between themselves.

“Attorney Costs”:

all reasonable fees and disbursements of any law firm or other external counsel

and the reasonable allocated cost of internal legal services, including all

reasonable disbursements of internal counsel.

“Attributable Debt”:

as of the date of determination thereof in connection with a Sale and Leaseback

Transaction occurring after the Closing Date, the greater of (1) the fair value

of the assets subject to such transaction (as determined in good faith by the

applicable lessee) and (2) the present value (discounted according to GAAP at

the cost of debt implied in the lease) of the obligations of the lessee for

rental payments during the term of any applicable lease.

“Available Revolving

Commitment”: as to any Lender at any time, an amount in Dollars equal to

the excess, if any, of (a) such Lender’s Revolving Commitment over (b) the sum

of (i) the aggregate principal amount then outstanding of Revolving Loans made

by such Lender and (ii) such Lender’s Commitment Percentage of the LC

Obligations and Commitment Percentage of the Swing Line Loans then outstanding.

“Bankruptcy Code”:

Title 11 of the United States Code entitled Bankruptcy as now or hereafter in

effect or any successor thereto.

“Base Rate”: the

higher of (i) the Prime Lending Rate and (ii) the Federal Funds Effective Rate

plus one–half of one percent (1⁄2%).

“Base Rate Loans”:

Loans bearing interest at a rate determined by reference to the Base Rate, or

Swing Line Loans, as the context shall require.

“Board”: the Board

of Governors of the Federal Reserve System (or any successor thereto).

“Borrower”: as

defined in the preamble.

"Borrower

Security Agreement": as defined in Section 6.1(a)(iii).

“Borrowing”: a

group of Loans of a single Type made by the Lenders or the Swing Line Lender,

as appropriate, on a single date and as to which a single Interest Period is in

effect.

“BT”: Bankers

Trust Company, a New York banking corporation.

“Business Day”: a

day other than a Saturday, Sunday or other day on which commercial banks in New

York City are authorized or required by law to close; provided, 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.

“Capital Expenditures”:

without duplication, with respect to any Person, any amounts expended or

Indebtedness incurred during or in respect of a period for any purchase or

other acquisition for value of any asset that should be classified on a

consolidated balance sheet of such Person prepared in accordance with GAAP as a

fixed or capital asset including, without limitation, the direct or indirect

acquisition of such assets or improvements by way of increased product or

service charges, offset items or otherwise, and shall include Capitalized Lease

Obligations and shall include amounts expended, incurred or obligated to be

expended during or in respect of a period for any Permitted Acquisition or

Permitted Investment regardless of whether such Permitted Acquisition or

Permitted Investment would be classified as fixed or capital assets on a

consolidated balance sheet of such Person prepared in accordance with GAAP.

“Capital Lease”:

as applied to any Person, any lease of any property (whether real, personal or

mixed) by that Person as lessee which would, in conformity with GAAP, be

required to be accounted for as a capital lease on the balance sheet of that

Person.

“Capital Stock”:

with respect to any Person, any and all shares, interests, participations,

rights in or other equivalents (however designated) of such Person’s capital

stock, partnership interests, membership interests or other equivalent

interests and any rights (other than debt securities convertible into or

exchangeable for capital stock or such interests), warrants or options

exchangeable for or convertible into such capital stock or other interests.

“Capitalized Lease

Obligation”: at the time any determination thereof is to be made, the

amount of the liability in respect of a Capital Lease which would at such time

be so required to be capitalized on such a balance sheet in accordance with

GAAP.

“Cash Equivalents”:

Investments of the type specified in clauses (i), (ii), (iii), (iv)  and (ix) of the definition of “Permitted

Investments”.

“Change of Control”:

(i) the sale, lease or transfer of all or substantially all of Borrower’s

assets to any Person or group (as such term is used in Section 13(d)(3) of the

Exchange Act), (ii) the liquidation or dissolution of Borrower, (iii) any

person or group of persons (within the meaning of the Exchange Act) acquiring

beneficial ownership (within the meaning of Rule 13d-3 promulgated by the SEC

under the Exchange Act) of 20% or more of the issued and outstanding shares of

Borrower’s Voting Securities; or (iv) a majority of the directors of the

Borrower are Persons other than Persons (A) for whose election proxies have

been solicited by Borrower’s board of directors or (B) who are then serving as

directors appointed by Borrower’s board of directors to fill vacancies on the

Board caused by death or resignation (but not by removal) or to fill new

created directorships.

“Closing Date” May

15, 1998.

“Code”: the

Internal Revenue Code of 1986, as amended from time to time.

"Collateral"

means all "Collateral" as defined in each of the Security Documents.

“Collateral

Account”: as defined in Section 4.3(a).

“Collateral Agent”: the Agent acting as

collateral agent for the Secured Creditors.

 “Committed Loan”: any Revolving Loan,

Term Loan or Swing Line Loan.

“Commitment”: as

to any Lender at any time, the aggregate of such Lender’s outstanding Revolving

Commitment and its Swing Line Commitment.

“Commitment Percentage”:

means, as to any Lender, (a) in respect of a particular Loan and/or Commitment,

(i) at any time at which the Commitments in respect of such Loan remain

outstanding, the percentage equivalent (expressed as a decimal, rounded to the

ninth decimal place) at such time of such Lender’s Commitment in respect of

such Loan divided by the combined Commitments in respect of such Loan; and (ii)

after the termination of the Commitments in respect of such Loan or in respect

of any Term Loan, the percentage equivalent (expressed as a decimal, rounded to

the ninth decimal place) at such time of the principal amount outstanding of

such Loans held by such Lender divided by the aggregate principal amount

outstanding of such Loans held by all Lenders, and (b) in respect of all Loans

and/or Commitments, (i) at any  time at

which the Aggregate Commitments (or any portion thereof) remains outstanding,

the percentage equivalent (expressed as a decimal, rounded to the ninth decimal

place) at such time of the sum of such Lender’s Revolving Commitments and such

Lender's outstanding Term Loans divided by the Aggregate Commitment, and (ii)

after the termination of the Revolving Commitments, the percentage equivalent

(expressed as a decimal, rounded to the ninth decimal place) at such time of

the principal amount of such Lender’s outstanding Loans and LC Obligations

divided by the aggregate principal amount of the outstanding Loans and LC

Obligations of all of the Lenders.

“Commitment Period”:

the period from and including the date hereof to but not including the

Termination Date.

“Commodity Price

Protection Agreement”: any Contractual Obligation or other arrangement

designed to protect Borrower or any of its Subsidiaries from fluctuations in

the price of commodities.

 “Consolidated Capital Expenditures”:

for any period, the aggregate of all Capital Expenditures by Borrower and its

Subsidiaries during that period that, in conformity with GAAP, are included in

“additions to property, plant or equipment” or comparable items reflected in

the consolidated statement of cash flows of Borrower and its Subsidiaries.

“Consolidated Current

Assets”: with respect to any Person, as at the time any determination

thereof is to be made, the amount, without duplication, that is classified on a

consolidated balance sheet of such Person and its Subsidiaries as the

consolidated current assets of such Person and its Subsidiaries in accordance

with GAAP.

“Consolidated Current

Liabilities”: with respect to any Person, as at the time any determination

thereof is to be made,  any indebtedness

(other than the Indebtedness hereunder) that is classified as consolidated

current liabilities on a consolidated balance sheet of such Person and its

Subsidiaries in accordance with GAAP.

“Consolidated Debt”:

indebtedness for money borrowed of Borrower and its Subsidiaries that should be

shown as a liability on a consolidated balance sheet of Borrower and its

Subsidiaries prepared in accordance with GAAP plus, without duplication,

the amount of Indebtedness of the type described in clauses (iii), (v), (ix)

and (x) of the definition thereof plus, without duplication,

Attributable Debt.

“Consolidated EBITDA”:

without duplication for any Person for any period for which such amount is

being determined, Consolidated Net Income or Consolidated Net Loss for such

period minus Second Quarter 2001 Deferred Tax Charges for such period,

if any, plus the sum of the amounts for such period of (i) Consolidated

Interest Expense, (ii) provision for taxes based on income, (iii) depreciation

expense, and (iv) amortization expense minus any non-cash non-operating income

for such period to the extent included in Consolidated Net Income or

Consolidated Net Loss and excluding any gain or loss recognized in respect of

post-retirement benefits as a result of the application of FASB 106 and any

foreign currency translation adjustments as a result of the application of FASB

52, all as determined on a consolidated basis for such Person and its

consolidated Subsidiaries in accordance with GAAP.  For purpose of this definition, “Consolidated EBITDA” shall be

calculated after giving effect on a pro forma basis to any

Acquisition as if such Acquisition occurred on the first day of the applicable

period on the same basis as is required in clauses (A) through (C) for the pro

forma test under clause (iii) of the definition of Permitted

Acquisition.

“Consolidated Interest

Expense”: with respect to any Person, for any period for which such amount

is being determined, total interest expense of such Person and its Subsidiaries

on a consolidated basis in accordance with GAAP for such period.

“Consolidated Net

Income” and “Consolidated Net Loss”: for any Person for any period

for which such amount is being determined, the net income (loss) of such Person

and its consolidated Subsidiaries during such period determined on a

consolidated basis for such period taken as a single accounting period in

accordance with GAAP, provided that in making such determination there shall be

excluded any effect of (i) income (or loss) of any Person (other than a

consolidated Subsidiary of such Person) in which any other Person (other than

such Person or any of its consolidated Subsidiaries) has a joint interest,

except to the extent of the amount of dividends or other distributions actually

paid to such Person or any of its consolidated Subsidiaries by such other

Person during such period, (ii) the income (or loss) of any Person accrued

prior to the date it becomes a consolidated Subsidiary of such Person or is

merged into or consolidated with such Person or any of its consolidated

Subsidiaries or the Person’s assets are acquired by such Person or any of its

consolidated Subsidiaries, (iii) the income of any consolidated Subsidiary of

such Person to the extent that the declaration or payment of dividends or

similar distributions by that consolidated Subsidiary of the income is not at

the time permitted by operation of the terms of its charter or any agreement,

instrument, judgment, decree, order, statute, rule or governmental regulation

applicable to that consolidated Subsidiary, (iv) Asset Acquisition-Related and

Other Special Charges, (v) Third Quarter 2001 Non-Recurring Charges; (vi)

Restructuring Charges; (vii) the Second Quarter 2001 Deferred Tax Charges; and

(viii) to the extent deducted from determining Consolidated Net Income, any

non-cash charge required as a result of the application of FASB 142.

“Consolidated Net

Worth”: of a Person means total stockholders’ equity of such Person and its

Subsidiaries on a consolidated basis in accordance with GAAP plus,

without duplication, Asset Acquisition-Related and Other Special Charges plus,

without duplication, the Second Quarter 2001 Deferred Tax Charges plus,

without duplication, Third Quarter 2001 Non-Recurring Charges plus,

without duplication, Restructuring Charges plus, without duplication and

only to the extent deducted in the determination of stockholder's equity, any

non-cash charge required as a result of the application of FASB 142.

“Contaminant”: any

material with respect to which any Environmental Law imposes a duty or

obligation, including without limitation any pollutant, contaminant (as those

terms are defined in 42 U.S.C. §9601(33)), toxic pollutant (as that term is

defined in 33 U.S.C. §1362(13)), hazardous substance (as that term is defined

in 42 U.S.C. §9601(14)), hazardous chemical (as that term is defined by 29 CFR

§ 1910.1200(c)), hazardous waste (as that term is defined in 42 U.S.C. §

6903(5)), or any state or local equivalent of such laws and regulations,

including, without limitation, radioactive material, special waste,

polychlorinated biphenyls, asbestos, petroleum, including crude oil or any

petroleum-derived substance, (or any fraction thereof), waste, or breakdown or

decomposition product thereof, or any constituent of any such substance or

waste, including but not limited to polychlorinated biphenyls and asbestos.

“Contractual

Obligation”: as to any Person, any provision of any agreement, instrument

or other undertaking to which such Person is a party or by which it or any of

its property is bound or to which it is subject.

“Converted Term Loan

Amount”: as defined in Section 2.1(a).

"Converting

Lender" means each Lender executing this Agreement on or before the

Restatement Date and each Lender who delivers a Term Loan Conversion Notice to

the Agent on or before the Restatement Date.

“Credit Event”: the making of any Loan or the

issuance of any Letter of Credit.

“Credit Party”: Borrower, each Subsidiary

Guarantor and any guarantor which may hereafter enter into a guarantee

agreement with respect to the Obligations.

“Currency Protection

Agreement”: any foreign exchange contract, currency swap agreement, or

other financial agreement or arrangement to which Borrower or any of its

Subsidiaries is a party that is designed to protect Borrower or any of its

Subsidiaries against fluctuations in currency values.

“Debts”: all

liabilities, whether matured or unmatured, liquidated or unliquidated,

absolute, fixed or contingent.

“Default Rate”: a

variable rate per annum which shall be two percent (2%) per annum plus

either (i) the then applicable interest rate hereunder in respect of the amount

on which the Default Rate is being assessed, or (ii) if there is no such

applicable interest rate, the Base Rate plus the Applicable Margin, but in no

event in excess of that permitted by applicable law.

“Defaulting Lender”:

any Lender with respect to which a Lender Default is in effect.

 “Documents”: the Loan Documents.

“Dollars” and “$”:

dollars in lawful currency of the U.S.

 “Domestic Overdraft Facility”: means

an unsecured overdraft line of credit in a maximum principal amount of not more

than $10,000,000 which may contain a subfacility for letters of credit which

line of credit shall be on terms and conditions and pursuant to documentation

no more restrictive than this Agreement and otherwise satisfactory in form and

substance to the Agent.

“Domestic Subsidiary”:

any Subsidiary of Borrower that is not a Foreign Subsidiary.

“Drawing”:

as defined in Section 2.9(d)(ii).

“Effective Date”:

the effective date of the applicable Assignment and Assumption Agreement, as

defined therein.

“Eligible Assignee”:

(i) a commercial bank organized under the laws of the U.S., or any State

thereof, (ii) a commercial bank organized under the laws of any other country

which is a member of OECD, or a political subdivision of any such country; provided,

however, that such bank is acting through a branch or agency located in

the country in which it is organized or another country which is also a member

of the OECD or the Cayman Islands, (iii) the central bank of any country which

is a member of the OECD, (iv) a finance company or other financial institution

or fund (whether a corporation, partnership, trust or other entity) that is

engaged in making, purchasing or otherwise investing in commercial loans in the

ordinary course of its business, (v) an insurance company organized under the

laws of the U.S. (or any State thereof), (vi) a savings bank or savings and

loan association organized under the laws of the U.S., or any State thereof,

(vii) any Lender party to this Agreement, (viii) any Affiliate of any Lender

party to this Agreement, and (ix) any other Person approved by Agent and

Borrower, such approval not to be unreasonably withheld; provided, however,

that an affiliate of Borrower shall not qualify as an Eligible Assignee.

“Environmental Laws”:

any and all foreign, Federal, state, local or municipal laws, rules, orders,

regulations, statutes, ordinances, codes or decrees of any Governmental Authority

or other Requirements of Law regulating, relating to or imposing liability or

standards of conduct concerning protection of human health or the environment,

as now or may at any time hereafter be in effect that are applicable to the

Borrower or its Subsidiaries.

“ERISA”: the

Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate”:

each trade or business (whether or not incorporated) which together with

Borrower or a Subsidiary of Borrower would be deemed to be a “single employer”

within the meaning of Section 4001(b)(1) of ERISA or would be included in a

“controlled group of corporations,” a group of “trades or businesses under

common control” or an “affiliated service group” within the meaning of Section

414(b), (c), (m) or (o) of the Code. 

Unless otherwise qualified, all references to an “ERISA Affiliate” in

this Agreement shall refer to an ERISA Affiliate of Borrower or any Subsidiary.

“Eurocurrency Reserve

Requirements”: for any day as applied to a Eurodollar Loan, the aggregate

(without duplication) of the maximum rates (expressed as a decimal fraction) of

reserve requirements in effect on such day (including, without limitation,

basic, supplemental, marginal and emergency reserves under any regulations of the

Board or other Governmental Authority having jurisdiction with respect thereto)

dealing with reserve requirements prescribed for Eurocurrency funding

(currently referred to as “Eurocurrency liabilities” in Regulation D of such

Board) maintained by a member bank of the Federal Reserve System.

“Eurodollar Borrowing”:

a Borrowing comprised of Eurodollar Loans.

“Eurodollar Loan”:

any Loan bearing interest at a rate determined by reference to the Eurodollar

Rate.

“Eurodollar Rate”:

the arithmetic average (rounded upwards to the nearest 1/16 of 1%) of the

offered quotations, if any, to first class banks in the Eurodollar market by BT

for Dollar deposits of amounts in immediately available funds comparable to the

principal amount of the applicable Eurodollar Loan for which the Eurodollar

Rate is being determined with maturities comparable to the Interest Period for

which such Eurodollar Rate will apply, as of approximately 10:00 A.M. (New York

City time) on the applicable Interest Rate Determination Date.  The determination of the Eurodollar Rate by

Agent shall be conclusive and binding on Borrower absent demonstrable error.

“Eurodollar Reserve

Rate”: with respect to each day during each Interest Period pertaining to a

Eurodollar Loan, a rate per annum determined for such day in accordance with

the following formula (rounded upward to the nearest 1/100th of 1%):

	

  Eurodollar Rate

  
	

  1.00 –

  Eurocurrency Reserve Requirements

  

 

"European Reorganization" has the

meaning assigned to that term in that certain Consent, Waiver and Fourth

Amendment to Credit Agreement dated as of December 21, 1999 by and among the

Borrower, the Agent and the Lenders signatory thereto.

“Event of Default”:

any of the events specified in Section 9.1; provided, however,

that any requirement for the giving of notice, the lapse of time, or both, or

any other condition, has been satisfied.

“Excess Cash Flow”:

for any period, the excess of (i) the sum of (without duplication) (A)

Consolidated Net Income for such period, plus (B) the amount of all non-cash

charges (including, without limitation or duplication, depreciation,

amortization and non-cash (including without limitation any original issue

discount or pay-in-kind interest expense) interest expense) included in

determining Consolidated Net Income for such period, plus (C) the

decrease, if any, in Adjusted Working Capital from the first day to the last

day of such period, plus (D) provisions for taxes appearing on an income

statement of Borrower and its Subsidiaries for such period, over (ii) the sum

(without duplication) of (A) any non-cash credits (including from sales of

assets) included in determining Consolidated Net Income for such period, plus

(B) gains from sales of assets included in determining Consolidated Net Income

for such period, plus (C) the aggregate amount of Capital Expenditures

(excluding Capital Expenditures made utilizing insurance proceeds from Recovery

Events or financed through Indebtedness (other than Indebtedness under this

Agreement)), plus (D) the aggregate principal amount of permanent

principal payments of Indebtedness for borrowed money of Borrower and its

Subsidiaries (other than (1) repayment of Indebtedness with proceeds of

issuance of other Indebtedness or equity or equity contributions or with Net

Sale Proceeds or Recovery Events and (2) repayment of Loans, provided

that repayments of Loans shall be deducted in determining Excess Cash Flow if

such repayments were (x) repayments of Loans on the Termination Date, (y) made

as a voluntary prepayment with internally generated funds (but in the case of a

voluntary prepayment of Revolving Loans or Swing Line Loans, only to the extent

accompanied by a voluntary permanent reduction to the Total Revolving

Commitment) or (z) made with Net Sale Proceeds from any Asset Disposition but

only to the extent that any gain from such Asset Disposition has been included

in the determination of Consolidated Net Income for such period) during such

period, plus (E) non-cash charges added back in a previous period

pursuant to clause (i)(B) above to the extent any such charge has become a cash

item in the current period, plus (F) the increase, if any, in Adjusted

Working Capital from the first day to the last day of such period, plus

(G) taxes paid by Borrower and its Subsidiaries during such period, plus

(H) the principal portion of Capitalized Lease Obligations paid by Borrower and

its Subsidiaries during such period.

“Excess Cash Flow

Period”: with respect to the repayment required on each Excess Cash Payment

Date, the immediately preceding Fiscal Year of Borrower.

“Excess Cash Payment

Date”: the date occurring 95 days after the last day of a Fiscal Year of

Borrower (beginning with its Fiscal Year ending on December 31, 2002).

“Exchange Act”:

the Securities Exchange Act of 1934, as amended and codified in U.S.C. 78a et

seq. and as hereafter amended from time to time.

“Exchangeable Stock”:

any Capital Stock which is exchangeable or convertible into another security

(other than Capital Stock of Borrower which is neither Exchangeable Stock nor

Redeemable Stock).

“Existing Credit

Agreements”: that certain Credit Agreement among BMC Industries, Inc.,

various Banks and Norwest Bank Minnesota, National Association, dated June 5,

1996, as amended to date, and all agreements relating to such loan agreement,

including, without limitation, any and all guarantees, pledge agreements and

security agreements.

 “Facility”: any of the credit

facilities established under this Agreement.

“Facing Agent”: as

defined in Section 2.9(a).

“Federal Funds

Effective Rate”: for any period, a fluctuating interest rate per annum

equal for each day during such period to the weighted average of the rates on

overnight Federal funds transactions with members of the Federal Reserve System

arranged by Federal funds brokers, as published for such day (or, if such day

is not a Business Day, for the next preceding Business Day) by the Federal

Reserve Bank of New York, or, if such rate is not so published for any day

which is a Business Day, the average of the quotations for such day on such

transactions received by BT, as Agent, from three Federal funds brokers of

recognized standing selected by it.

“Financial Officer”:

with respect to any Person, the chief financial officer, principal accounting

officer, a financial vice president, treasurer or assistant treasurer of such

Person.

“Foreign Subsidiary”:

a Subsidiary of Borrower that is incorporated under the laws of a jurisdiction

other than any State of the U.S. or the District of Columbia.

“GAAP”: generally

accepted accounting principles in the U.S. as in effect from time to time.  If any changes in GAAP or the application

thereof from that used in the preparation of the financial statements referred

to in Section 7.1(a) hereof occur after the Closing Date and such

changes result in a material change in the calculation of any financial

covenants or restrictions set forth in this Agreement, then the parties hereto

agree to enter into and diligently pursue negotiations in order to amend such

financial covenants and restrictions so as to equitably reflect such changes,

with the desired result that the criteria for evaluating the financial

condition and results of operations of Borrower and its Subsidiaries shall be

the same after such changes as if such changes had not been made.

“Governmental

Authority”: any nation or government, any state or other political

subdivision thereof and any entity exercising executive, legislative, judicial,

regulatory or administrative functions of government.

“Guarantee Obligations”: as to any Person,

without duplication, any direct or indirect obligation of such Person

guaranteeing or intended to guarantee any Indebtedness, Capital Lease or

operating lease, dividend or other obligation (“primary obligations”) of any

other Person (the “primary obligor”) in any manner, whether directly or

indirectly, including, without limitation, any obligation of such Person,

whether or not contingent:  (i) to

purchase any such primary obligation or any property constituting direct or

indirect security therefor; (ii) to advance or supply funds (a) for the

purchase or payment of any such primary obligation, or (b) to maintain working

capital or equity capital of the primary obligor or otherwise to maintain the

net worth or solvency of the primary obligor; (iii) to purchase property,

securities or services primarily for the purpose of assuring the owner of any

such primary obligation of the ability of the primary obligor to make payment

of such primary obligation; or (iv) otherwise to assure or hold harmless the

owner of such primary obligation against loss in respect thereof; provided,

however, that the term Guarantee Obligation shall not include any

endorsements of instruments for deposit or collection in the ordinary course of

business.  The amount of any Guarantee

Obligation of any Person at any time shall be deemed to be an amount equal to

the lesser at such time of (y) the stated or determinable amount of the primary

obligation in respect of which such Guarantee Obligation is made or (z) the

maximum amount for which such Person may be liable pursuant to the terms of the

instrument embodying such Guarantee Obligation; or, if not stated or

determinable, the maximum reasonably anticipated liability (assuming full

performance) in respect thereof.

“Indebtedness”:

as applied to any Person (without duplication):

(i)            all indebtedness of such Person for

borrowed money;

(ii)           the deferred and unpaid balance of

the purchase price of assets or services (other than trade payables and other

accrued liabilities incurred in the ordinary course of business that are not

overdue by more than 90 days unless being contested in good faith) which

purchase price is (y) due more than six months from the date of incurrence of

the obligation in respect thereof or (z) evidenced by a note or a similar

written instrument;

(iii)          that portion of obligations of such

Person with respect to Capital Leases which is required to be classified as a

liability on a balance sheet in accordance with GAAP;

(iv)          all indebtedness secured by any Lien

on any property owned by such Person, whether or not such indebtedness has been

assumed by such Person or is nonrecourse to such Person;

(v)           notes payable and drafts accepted

representing extensions of credit whether or not representing obligations for

borrowed money (other than such notes or drafts for the deferred purchase price

of assets or services which does not constitute Indebtedness pursuant to clause

(ii) above);

(vi)          indebtedness or obligations of such

Person, in each case, evidenced by bonds, notes or similar written instrument;

(vii)         the face amount of all letters of

credit and bankers’ acceptances issued for the account of such Person, and

without duplication, all drafts drawn thereunder other than, in each case,

commercial or standby letters of credit or the functional equivalent thereof

issued in connection with performance, bid or advance payment obligations

incurred in the ordinary course of business, including, without limitation,

performance requirements  under workers

compensation or similar laws;

(viii)        all obligations of such Person under

Interest Rate Protection Agreements or Currency Protection Agreements;

(ix)           Guarantee Obligations of such Person;

and

(x)            the principal balance outstanding

under any synthetic lease, tax retention operation lease, off-balance sheet loan

or similar off-balance sheet financing product to which such Person is a party,

where such transaction is considered borrowed money indebtedness for tax

purposes but is classified as an operating lease in accordance with GAAP.

“Insolvent”: with

respect to any Person, that the present fair saleable value of the assets of

such Person is less than the amount that will be required to pay the probable

liability on existing Debts of such Person or such Person is unable to pay its

Debts, as such Debts become absolute and matured.

“Intellectual

Property”: as defined in Section 5.13.

“Intercompany

Indebtedness”: Indebtedness of Borrower or any of its Subsidiaries which,

in the case of Borrower, is owing to any such Subsidiary and which, in the case

of any Subsidiary of Borrower, is owing to Borrower or any of its other

Subsidiaries.

“Interest Payment Date”:

(a)  as to any Base Rate Loan, the last

Business Day of each March, June, September and December to occur while such

Loan is outstanding and the date on which all of the Loans hereunder are paid

in full, (b) as to any Eurodollar Loan, the last day of the Interest Period

applicable thereto and (c) as to any Eurodollar Loan having an Interest Period

longer than three months, each day which is three months after the first day of

the Interest Period applicable thereto; provided, however, that,

in addition to the foregoing, each of (x) the date upon which the Commitments

have been terminated and the Loans have been paid in full and (y) the

Termination Date shall be deemed to be an “Interest Payment Date” with respect

to any interest which is then accrued hereunder.

“Interest

Period”: as defined in Section 3.4.

“Interest Rate

Determination Date”: the date for calculating the Eurodollar Rate for an

Interest Period, which date shall be the second Business Day prior to the first

day of the related Interest Period for such Eurodollar Loan.

“Interest Rate

Protection Agreement”: any interest rate swap agreement, interest rate cap

agreement or other financial agreement or arrangement designed to protect

Borrower or any of its Subsidiaries against fluctuations in interest rates.

“Investment”: as

applied to any Person, any direct or indirect purchase or other acquisition for

value by that Person of stock or other securities of any other Person (or a

beneficial interest therein), or a capital contribution by that Person to any

other Person, or any direct or indirect loan or advance to any other Person, or

any purchase by that Person of all or a significant part of the assets of a business

conducted by another Person or any purchase by that Person of a futures

contract or such person otherwise becoming liable for the purchase or sale of

currency or other commodity at a future date in the nature of a futures

contract.  The amount of any Investment

by any Person shall be the original Investment (including the amount of any

liability assumed to the extent that such liability would be reflected on a

balance sheet prepared in accordance with GAAP) plus the cost of all additions

thereto, without any adjustments for increases or decreases in value, or

write-ups, write-downs or write-offs with respect to such Investment.

“IRS”: the United

States Internal Revenue Service, or any successor or analogous U.S.

Governmental Authority.

 “LC Commission”: as defined in Section

2.9(e)(ii).

“LC Obligations”:

at any time, an amount equal to the sum of (a) the aggregate Stated Amount of

the then outstanding Letters of Credit and (b) the aggregate amount of Unpaid

Drawings (in each case without duplication). 

The LC Obligation of any Lender at any time shall mean its Pro Rata

Share of the aggregate LC Obligations outstanding at such time.

“LC Participant”:

as defined in Section 2.9(e).

“LC Supportable

Indebtedness”: (i) obligations of Borrower or its Subsidiaries incurred in

the ordinary course of business with respect to insurance obligations and

workers’ compensation, surety bonds and other similar statutory obligations and

(ii) such other obligations of Borrower or any of its Subsidiaries as are

reasonably acceptable to Agent and the respective Facing Agent and otherwise

permitted to exist pursuant to the terms of this Agreement.

“Lender Default”:

(i) the refusal (which has not been retracted) of a Lender to meet its

obligation to make available its portion of any Borrowing or to fund its

portion of any unreimbursed payment under Section 2.1(b)or (ii) a Lender

having notified in writing Borrower and/or Agent that it does not intend to

comply with its obligations under Section 2.1 (whether or not as a

result of any takeover of such Lender by any regulatory authority or agency).

“Lenders”: means

those financial institutions from time to time party to the Agreement.

“Lending Office”:

with respect to each Lender, the office specified on such Lender’s signature page

or in the applicable Assignment and Assumption Agreement with respect to each

Type of Loan, or such other office as such Lender may designate in writing from

time to time to Borrower and Agent with respect thereto.

“Letter of Credit”:

means any letter of credit issued by Facing Agent hereunder, and any amendments

thereto or replacements thereof, pursuant to Section 2.9.

“Letter of Credit

Payment”: as applicable (a) all payments made by the Facing Agent pursuant

to either a draft or demand for payment under a Letter of Credit or (b) all

payments made by the Lenders to the Facing Agent in respect thereof.

“Letter of

Credit Request”: as defined in Section 2.9(c).

“Lien”: any

judgment lien or execution, attachment, levy, distraint or similar legal

process and any mortgage, pledge, security interest, encumbrance, lien, charge

or deposit arrangement (other than a deposit in the ordinary course of business

and not intended as security) of any kind (including, without limitation, any

conditional sale or other title retention agreement or lease in the nature

thereof, any sale of receivables with recourse (in whole or in part) against

the seller or any other Person except the account debtors, any filing or

agreement to file a financing statement as debtor under the UCC or any similar

statute other than to reflect ownership by a third party of property leased to

Borrower or any of its Subsidiaries under a lease which is not in the nature of

a conditional sale or title retention agreement, or any subordination arrangement

in favor of another Person).

“Liquidity”: as of

any date of determination, all cash and Cash Equivalents of the Borrower

(determined on a consolidated basis) plus the Total Available Revolving

Commitments.

“Loan”: a

Revolving Loan, Term Loan or a Swing Line Loan, as the context shall require;

collectively, the “Loans.”

“Loan Documents”:

this Agreement, the Notes, each Letter of Credit, each Security Document and

any other instruments, documents and agreements delivered to Agent in favor of

the Lenders or for the benefit of the Lenders.

 

“Majority Lenders”:

at any time, Lenders then holding at least 51% of the sum of (a) the then

aggregate unpaid principal amount of the Term Loans,  plus (b) the amount of the Total Revolving Commitment (or

if the Total Revolving Commitment has been terminated, then the aggregate

principal amount outstanding of Revolving Loans, plus the outstanding amount of

LC Obligations); provided, that, if no principal amount of any Loan is

then outstanding, then “Majority Lenders” shall mean Lenders then having at

least 51% of the Total Revolving Commitment.

 “Material Adverse Effect”: a material

adverse effect on (a) the business, condition (financial or otherwise), assets,

liabilities, property or operations of Borrower and its Subsidiaries taken as a

whole, (b) the ability of Borrower or any Subsidiary to perform its obligations

under any Loan Document to which it is a party, or (c) the validity or

enforceability of this Agreement, any Note, any Security Document or the material

rights or remedies of Agent and the Lenders hereunder or thereunder.

“Material Asset

Disposition”: any Asset Disposition of all or any substantial part of the

assets of Borrower and its Subsidiaries, taken as a whole, to any Person (other

than Borrower or any of its Subsidiaries). 

For purposes of this definition, any subsidiary or the assets of a

business operation which, in each case, if separately counted would constitute

a “significant subsidiary” within the meaning of Rule 1-02 of Regulation S-X

promulgated by the United States Securities and Exchange Commission shall be

deemed to constitute a “substantial part of the assets” of such Borrower and

its Subsidiaries, taken as a whole.

“Material Subsidiary”:

a Subsidiary, including its subsidiaries, which meets any of the following

conditions:

(i)            the Borrower’s and its Subsidiaries’

advances to and other investments in the Subsidiary exceed 10 percent of the

total assets of the Borrower and its Subsidiaries consolidated as of the end of

the most recently completed fiscal year; or

(ii)           the Borrower’s and its other

Subsidiaries’ proportionate share of the total assets (after intercompany

eliminations) of the Subsidiary exceeds 10 percent of the total assets of the

Borrower and its Subsidiaries consolidated as of the end of the most recently

completed fiscal year; or

(iii)          the EBITDA of the Subsidiary exceeds 10

percent of the EBITDA of the Borrower and its Subsidiaries consolidated for the

most recently completed fiscal year.

“Minimum Borrowing

Amount”: with respect to Base Rate Loans, $5,000,000, and with respect to

Eurodollar Loans, $5,000,000, and with respect to Swing Line Loans, $1,000,000.

“Modification”: as

defined in Section 11.1.

“Moody’s”: Moody’s

Investors Service, Inc. or any successor to the rating agency business thereof.

“Mortgage”: the

form of Mortgage attached hereto as Exhibit 6.1(a)(vi) covering the

Ramsey, Minnesota property of the Borrower's Subsidiary as amended, restated,

supplemented or otherwise modified from time to time.

“Mortgage Policy”:

any mortgage insurance policies, "marked up" mortgage title insurance

commitment, items described in Exhibit 6.1(a)(vi)(ii)(1) hereto or

similar documents executed pursuant to Section 5.19(b).

“Mortgaged Property”:

any real property subject to the Mortgage pursuant to Section 5.19(b).

“Most Recent Ratio of

Consolidated Debt to Consolidated EBITDA”: at any date, the ratio of

Consolidated Debt as of the end of the most recently ended fiscal quarter of

Borrower for which financial statements have been delivered pursuant to Section

7.1 (after giving effect to all payments made on or before such date) to

Consolidated EBITDA for the period of four consecutive fiscal quarters ending

on the last day of the most recently ended fiscal quarter of Borrower for which

financial statements have been delivered pursuant to Section 7.1; provided,

however, that on the date of any Acquisition, the “Most Recent Ratio of

Consolidated Debt to Consolidated EBITDA” shall be recalculated effective until

the date of delivery of the next quarterly financial statements as the ratio of

Consolidated Debt as of the date of any such Acquisition (and after giving

effect to any Indebtedness incurred or assumed in connection therewith) to

Consolidated EBITDA for the four fiscal quarter period ending as of the most

recently ended fiscal quarter for which financial statements have been

delivered pursuant to Section 7.1 (calculated on a pro forma

basis as set forth in the definition of Consolidated EBITDA after giving effect

to the Acquisition); provided, further, however, that if

Borrower fails to deliver such financial statements as required by Article VII

and further fails to remedy such default within five days of notice thereof

from Agent, then, without prejudice to any other rights of any Lender

hereunder, the Most Recent Ratio of Consolidated Debt to Consolidated EBITDA”

shall be deemed to be greater than 3.50 to 1.0 as of the date such financial

statements were required to be delivered under Section 7.1.

“Multiemployer Plan”:

any plan described in Section 4001(a)(3) of ERISA to which contributions are

or, within the immediately preceding six years, have been made or required by

Borrower or any of its Subsidiaries or ERISA Affiliates.

“Net Offering Proceeds”:

the proceeds received from (a) the issuance of any Capital Stock or (b) the

incurrence of any Indebtedness net of the actual liabilities for reasonably

anticipated cash taxes in connection with such issuance or incurrence, if any,

any underwriting, brokerage and other customary selling commissions incurred in

connection with such issuance or incurrence, and reasonable legal, advisory and

other fees and expenses, including title and recording tax expenses, if any,

incurred in connection with such issuance or incurrence.

“Net Sale Proceeds”:

means the aggregate cash proceeds received from any Asset Disposition

(including, without limitation, cash received by way of deferred payment

pursuant to a note receivable, conversion of non-cash consideration, cash

payments in respect of purchase price adjustments or otherwise, but only as and

when such cash is received) by Borrower or any Subsidiary minus the reasonable

costs and expenses incurred in connection therewith and any provision for taxes

in respect thereof made in accordance with GAAP.

“New Domestic

Subsidiary”: as defined in Section 7.12(a).

“Non-Convertible

Capital Stock”: with respect to any corporation, any non-convertible

Capital Stock of such corporation and any Capital Stock of such corporation

convertible solely into non-convertible common stock of such corporation; provided,

however, that Non-Convertible Capital Stock shall not include any

Redeemable Stock or Exchangeable Stock.

“Non-Defaulting Lender”:

each Lender which is not a Defaulting Lender.

“Notes”:

respectively (i) individually, each Revolving Note, Term Note or Swing Line

Note and (ii) collectively, all Revolving Notes, all Term Notes and all Swing

Line Notes.

“Notice of

Borrowing”: as defined in Section 2.5.

“Notice of Conversion

or Continuation”: as defined in Section 2.6.

“Obligations”: all

Loans and other Indebtedness, advances, debts, liabilities, obligations,

covenants and duties owing by any Credit Party to any Lender, any Agent or any

other Person required to be indemnified under any Loan Document, of any kind or

nature, present or future, whether or not evidenced by any note, guaranty or

other instrument, arising under this Agreement or under any other Loan

Document, whether or not for the payment of money, whether arising by reason of

an extension of credit, loan, guaranty, indemnification or in any other manner,

whether direct or indirect (including those acquired by assignment), absolute

or contingent, due or to become due, now existing or hereafter arising and

however acquired.

“OECD”: the

Organization for Economic Cooperation and Development.

“Original Credit

Agreement”: has the meaning assigned to that term in the recitals hereto.

“Payment Office”:

the address for such payments for such Loans set forth on Schedule 11.3

hereto in relation to Agent, or such other address as Agent may from time to

time specify in accordance with Section 11.3.

“PBGC”: the

Pension Benefit Guaranty Corporation created by Section 4002(a) of ERISA or any

successor thereto.

 “Permitted Acquisition”: any

Acquisition where the Person acquired is a Wholly-Owned Subsidiary or the

assets acquired are owned by Borrower or a Wholly-Owned Subsidiary or where (i)

the Person acquired becomes a Credit Party or the assets acquired are owned by

a Credit Party and (a) Aggregate Consideration paid by Borrower and its

Subsidiaries is less than $25,000,000; or (b) Aggregate Consideration paid by

Borrower and its Subsidiaries is less than $75,000,000 and (1) the Person or

assets to be acquired are in a business which is reasonably related to the

business the Borrower or any Subsidiary of the Borrower is engaged in on the

date hereof (2) after giving effect thereto on a pro forma basis

for the period (the “Pro Forma Period”) of four fiscal quarters ending with the

fiscal quarter for which financial statements have most recently been delivered

(or were required to be delivered) under Section 7.1 (on the basis that

(A) Indebtedness incurred or assumed in connection with such Acquisition was

incurred or assumed at the beginning of the Pro Forma Period, (B) if such Indebtedness

bears interest at a floating rate, interest expense for the Pro Forma Period

shall be calculated at the rate in effect on the date of such Acquisition, and

(C) all income and expenses associated with the assets or entity acquired in

connection with such Acquisition for the most recently ended four fiscal

quarter period for which such income and expense amounts are available (with

good faith estimates thereof being permitted if financial statements indicating

such amounts are not available) shall be treated as being earned or incurred by

Borrower over the Pro Forma Period on a pro forma basis), no

Event of Default or Unmatured Event of Default would exist hereunder

(including, without limitation, under Section 8.1(d)); (3) the ratio of

Consolidated Debt to Consolidated EBITDA of Borrower on the pro forma

basis described above would be less than 2.75 to 1.0; and (4) after giving

effect thereto the Borrower’s Liquidity shall not be less than $35,000,000; and

(ii) Borrower and its Subsidiaries have complied with the requirement of Section

7.12 hereof with respect to any required execution of the Subsidiary

Guarantee Agreement; and (iii) such Acquisition has been approved by the board

of directors of the Person to be acquired.

“Permitted

IDB/Community Development Indebtedness”: (a) Indebtedness related to

municipal bonds or similar obligations of a state or political subdivision

thereof, issued in connection with an industrial development or related

facilities, and (b) Indebtedness owed to or for the benefit of any community

development agency, state or local economic development authority or similar

entity providing loans, grants or other economic assistance to encourage

employment, construction, local investment or other activity deemed beneficial

for the community (including without limitation such indebtedness having terms

calling for reduced interest rates, debt forgiveness and similar benefits) not

exceeding in the aggregate $10,000,000 outstanding at any time.

“Permitted

Investments”:

(i)            any demand deposits with any bank or

trust company maintained in the ordinary course of business or shares of any

money market mutual fund rated at least AAA or the equivalent thereof by

S&P or at least Aaa or the equivalent thereof by Moody’s, including, without

limitation, any such mutual fund managed or advised by any Lender or Agent;

(ii)           any evidence of Indebtedness,

maturing not more than two (2) years after the date of acquisition thereof,

issued by the U.S., or an instrumentality or agency thereof and guaranteed

fully as to principal, interest and premium, if any, by the U.S.;

(iii)          any certificate of deposit that is

denominated in Dollars, maturing not more than six (6) months after the date of

purchase, issued by a Lender or a commercial banking institution which is a

member of the Federal Reserve System and which has a combined capital and

surplus and undivided profits of not less than $200,000,000;

(iv)          commercial paper, maturing not more

than ninety (90) days after the date of acquisition, issued by a corporation

organized and existing under the laws of any State of the U.S. or the District

of Columbia or Canada, which is denominated in Dollars, with a rating, at any

date of determination, of “Prime–2” (or better) according to Moody’s, or

“A–2” (or better) according to S & P;

(v)           any Investments in any Credit Party

(other than an Investment in connection with an Acquisition which shall be

governed by clause (vii));

(vi)          any Investments made after the Closing

Date by Borrower or any Credit Party in any Subsidiary which is not a Credit

Party or any Permitted Unconsolidated Venture in an aggregate amount

outstanding at any time not in excess of $20,000,000 or, in the case of any

Subsidiary which is not a Credit Party, any Investment in any Subsidiary which

is not a Credit Party;

(vii)         Investments made solely as a result of

mergers, acquisitions or consolidations permitted under Section 8.4;

(viii)        loans or advances to employees made in

the ordinary course of business;

(ix)           Investments in overnight Nassau time

deposits and Eurodollar deposits in branches or offices of banking institutions

described in clause (ii) of this definition of the term “Permitted

Investments”;

(x)            Investments outstanding as of the

Closing Date in Subsidiaries (as such Investments may be adjusted due to

appreciation, repayment of principal, payment of interest, return of capital

and similar circumstances);

(xi)           Investments not otherwise permitted

hereunder not to exceed $5,000,000 in the aggregate outstanding at any time;

(xii)          Investments

by Buckbee-Mears European Holding Company B.V. ("BV2") in that

certain Note A  dated as of December 22,

1999 by Buckbee-Mears Deutschland Holding GmbH in favor of the Borrower and

assigned to BV2 in the original principal amount of 77,000,000 Euro;

(xiii)         Investments

by the Borrower in that certain Note B dated as of December 22, 1999 by

Buckbee-Mears Holding Company B.V. in favor of the Borrower in the original

principal amount of 77,000,000 Euro ("Note B");

provided that if a

Permitted Unconsolidated Venture or a Subsidiary which is not a Credit Party

shall thereafter become a Credit Party, the foregoing limitations shall

thereafter be determined as though any Investment made in such Permitted

Unconsolidated Venture or Subsidiary was originally made as an Investment in a

Credit Party permitted under clause (v) above; provided, further,

that Permitted Investments shall not include cash or Cash Equivalents exceeding

$10,000,000 held by Borrower or its Subsidiaries for more than five (5)

consecutive Business Days.

“Permitted Liens”:

The following Liens:

(i)            Liens for property taxes and

assessments or governmental charges or levies and Liens securing claims or

demands of mechanics and materialmen; provided, however, payment

thereof is not later than the time required by Section 7.5;

(ii)           Liens in an aggregate amount not to

exceed $10,000,000 at any time of or resulting from any judgment or award, the

time for the appeal or petition for rehearing of which shall not have expired,

or in respect of which Borrower or a Subsidiary of Borrower shall at any time

in good faith be prosecuting an appeal or proceeding for a review and in

respect of which a stay of execution pending such appeal or proceeding for

review shall have been secured;

(iii)          Liens incidental to the conduct of

business or the ownership of properties and assets (including Liens in

connection with worker’s compensation, unemployment insurance and other like

laws, warehousemen’s and attorneys’ liens and statutory landlords’ liens) and

Liens to secure the performance of bids, tenders or trade contracts, or to

secure statutory obligations, surety or appeal bonds or other Liens of like

general nature incurred in the ordinary course of business and not in

connection with the borrowing of money; provided, however, in

each case, the obligation secured is not overdue or, if overdue, is being

contested in good faith by appropriate actions or proceedings;

(iv)          minor survey exceptions or minor

encumbrances, easements or reservations, or rights of others for rights–of–way,

utilities and other similar purposes, or zoning or other restrictions as to the

use of real properties, which customarily exist on properties of corporations

engaged in similar activities and similarly situated and which do not in any

event materially impair their use in the operation of the business of Borrower

and its Subsidiaries;

(v)           Liens securing Indebtedness of a

Subsidiary of Borrower to Borrower;

(vi)          Liens existing as of the Restatement

Date and reflected on Schedule 8.3 hereto and Liens incurred in

connection with the refinancing of Indebtedness secured thereby so long as no

such Lien extends to any property not subject thereto as of the Restatement

Date (other than improvements thereto or, if required by the terms of the

document or instrument creating or governing such Lien as in effect on the

Restatement Date, additions thereto and replacements and substitutions

therefor);

(vii)         customary rights of setoff, revocation,

refund or chargeback under deposit agreements or under the UCC of banks or

other financial institutions where Borrower or its Subsidiaries maintain

deposits in the ordinary course of business;

(viii)        Liens securing Permitted IDB/Community

Development Indebtedness;

(ix)       additional Liens incurred by Borrower and

its Subsidiariesso long as the aggregate amount of the obligations secured by

such Liens does not exceed $7,500,000 less the amount of Liens securing

Permitted IDB/Community Development Indebtedness permitted by clauses (viii)

above; and

(x)        Permitted Real Property Encumbrances.

“Permitted Real

Property Encumbrances”: (i) those liens, encumbrances and other matters

affecting title to any Mortgaged Property listed in the Mortgage Policies on

the date of delivery of such Mortgage Policies to Agent in accordance with the

terms hereof,  (ii) as to any particular

parcel of real property at any time, such easements, encroachments, covenants,

rights of way, minor defects, irregularities or encumbrances on title which do

not materially impair such parcel of real property for the purpose for which it

is held by the user thereof, or the Lien held by Agent, (iii) municipal and

zoning ordinances and environmental regulations, which are not violated in any

material respect by the existing improvements and the present use made by the mortgagor

thereof of the premises (as defined in the respective Mortgage), (iv) general

real estate taxes and assessments not yet delinquent, and (v) such other items

as to which Agent may consent which do not materially impair such parcel of

real property for the purpose for which it is held by the user thereof, or the

Lien held by the Agent.

“Permitted

Subordinated Indebtedness”: up to $100,000,000 in aggregate initial

principal amount of indebtedness of the Borrower which (i) by its terms is

expressly subordinated to this Agreement, as from time to time amended,

restated, supplemented, modified, refinanced, refunded or replaced, (ii) has a

maturity date not less than one year after the Termination Date, (iii) is in

all respects in form and substance satisfactory to Agent and (iv) is rated no

lower than BB by S&P and no lower than Ba2 by Moody’s.

“Permitted

Unconsolidated Venture”: an Investment in a Person not constituting a

Subsidiary of Borrower which Person is engaged in the same or related business

as Borrower or any of its Subsidiaries is engaged on the Closing Date.

“Person”: an

individual or a corporation, limited liability company, partnership, trust,

incorporated or unincorporated association, joint venture, joint stock company,

government (or an agency or political subdivision thereof) or other entity of

any kind provided; however, that references to Persons include their respective

permitted successors and assigns or, in the case of governmental Persons,

Persons succeeding to the relevant functions of such persons; and all

references to statutes and related regulations shall include any amendments of

same and any successor statutes and regulations.

“Plan”: any plan

described in Section 4021(a) of ERISA and not excluded pursuant to Section

4021(b) thereof, which may hereafter be or has been established or maintained,

within the immediately preceding six years, or to which contributions are or,

within the immediately preceding six years, have been made, by Borrower or any

of its Subsidiaries or ERISA Affiliates, but not including any Multiemployer

Plan.

“Plan Administrator”:

has the meaning assigned to the term “administrator” in Section 3(16)(A) of

ERISA.

“Plan Sponsor”:

has the meaning assigned to the term “plan sponsor” in Section 3(16)(B) of

ERISA.

“Pledge Agreement”:

has the meaning assigned to that term in Section 6.1(a)(iv).

 “Pledged Stock”: as defined in the

Security Documents.

“Prime Lending Rate”:

the rate which BT announces from time to time as its prime lending rate, base

rate or equivalent, as in effect from time to time.  The Prime Lending Rate is a reference rate and does not

necessarily represent the lowest or best rate actually charged to any

customer.  Any Lender may make

commercial loans or other loans at rates of interest at, above or below the

Prime Lending Rate.  The Prime Lending

Rate shall change automatically and without notice from time to time as and

when BT changes its prime lending rates, base rates or equivalent.

“Pro Rata Share”:

when used with reference to any Lender and any described aggregate or total

amount, an amount equal to the result obtained by multiplying such described

aggregate or total amount by a fraction the numerator of which shall be such

Lender’s Revolving Commitment and the denominator of which shall be the Total

Revolving Commitment or, if no Revolving Commitments are then outstanding, such

Lender’s aggregate outstanding principal amount of Revolving Loans and LC

Obligations to the total outstanding principal balance of all Revolving Loans

and LC Obligations hereunder.

“Quarterly Payment

Date”: the last Business Day of each March, June, September and December of

each year.

“Recovery Event”:

the receipt by Borrower (or any of its Affiliates) of any insurance or

condemnation proceeds payable (i) by reason of any theft, physical destruction

or damage or any other similar event with respect to any properties or assets

of Borrower or any of its Subsidiaries, (ii) by reason of any condemnation,

taking, seizing or similar event with respect to any properties or assets of

Borrower or any of its Subsidiaries and (iii) under any policy of insurance

required to be maintained under Section 5.17.

“Redeemable Stock”:

any Capital Stock that by its terms or otherwise is required to be redeemed on

or prior to the first anniversary of the Termination Date (as the same may be

extended pursuant to the terms hereof) or is redeemable at the option of the

holder thereof at any time on or prior to the first anniversary of such

Termination Date.

“Refunded Swing Line

Loans”: as defined in Section 2.2(d).

“Register”: as

defined in Section 11.9(c).

“Regulation D”, “Regulation

T”, “Regulation U” and “Regulation X”: respectively,

Regulation D, T, U and X of the Board as from time to time in effect and any

successor to all or a portion of any thereof.

“Release”: any

release, spill, emission, leaking, pumping, pouring, emptying, dumping,

injection, deposit, disposal, discharge, dispersal, escape, leaching or

migration in violation of any Environmental Law into the indoor or outdoor

environment or into or out of any property of Borrower or its Subsidiaries, or

at any other location, including any location to which Borrower or any

Subsidiary has transported or arranged for the transportation of any

Contaminant, including the movement of Contaminants through or in the air,

soil, surface water, groundwater or property of Borrower or its Subsidiaries or

at any other location, including any location to which Borrower or any

Subsidiary has transported or arranged for the transportation of any Contaminant.

“Remedial Action”:

actions required to (i) clean up, remove, treat or in any other way address

Contaminants in the indoor or outdoor environment, (ii) prevent or minimize the

Release or threat of Release of Contaminants so they do not migrate or endanger

or threaten to endanger public health or welfare or the indoor or outdoor

environment; or (iii) perform pre-remedial or post-remedial studies and

investigations and post-remedial monitoring and care or any other studies,

reports or investigations relating to Contaminants.

 “Reportable Event”: a “reportable

event” described in Section 4043(c) of ERISA or in the regulations thereunder

or receipt of a notice of withdrawal liability with respect to a Multiemployer

Plan pursuant to Section 4202 of ERISA.

“Requirement of Law”:

as to any Person, any law (including common law), treaty, rule or regulation or

determination of an arbitrator or a court or other Governmental Authority,

including without limitation, any Environmental Law, in each case applicable to

or binding upon such Person or any of its property or to which such Person or

any of its property is subject.

“Responsible Officer”:

means any of the President, any Executive Vice President, the Chief Financial

Officer, Controller or the Treasurer of Borrower.

“Restatement Date”:

the date on which the conditions specified in Section 6.1 are satisfied (or

waived in accordance with Section 11.1).

“Restructuring Charges”:

for any period of four consecutive fiscal quarters that includes the first

fiscal quarter of Fiscal Year 2002, any actual restructuring charges recorded

by the Borrower and its Subsidiaries during such period but no later than the

first quarter of Fiscal Year 2002 in an aggregate amount for all such

Restructuring Charges not to exceed $15,000,000, of which up to $4,000,000 may

be in cash, in connection with the restructuring of the Borrower and its

Subsidiaries.

"Revolver

Commitment Reduction" means a permanent reduction of the undrawn

Revolving Commitments of the Lenders on the Restatement Date by $35,000,000.

“Revolving Commitment”:

as to any Lender, the obligation of such Lender to (a) make Revolving Loans to

Borrower, (b) participate in Swing Line Loans made to Borrower and (c) to

participate in Letters of Credit, in an aggregate principal and/or Stated

Amount at any one time outstanding not to exceed the amount set forth opposite

such Lender’s name on Schedule 2.1(b) under the heading “Revolving

Commitment”, and as such amount may be reduced from time to time in accordance

with the terms hereof; collectively, as to all Lenders, the “Revolving

Commitments”.

“Revolving Lenders”:

any Lender that has a Revolving Commitment or is owed a Revolving Loan.

“Revolving Loans”:

as defined in Section 2.1(a).

“Revolving Note”:

as defined in Section 2.1(b).

“Sale and Leaseback

Transaction”: any arrangement, directly or indirectly, with any Person

whereby a seller or transferor shall sell or otherwise transfer any real or

personal property and then or thereafter lease, or repurchase under an extended

purchase contract, conditional sales or other title retention agreement, the

same or similar property.

“Scheduled Term

Repayments”: the payment of the aggregate principal amount of Term Loans

outstanding on the Term Loan Maturity Date.

“Second Quarter 2001

Deferred Tax Charge”: means, with respect to any period of four consecutive

fiscal quarters which includes June 30, 2001, the charge against earnings taken

for the second quarter of Fiscal Year 2001 for valuation of deferred income

taxes in an amount not exceeding $10,000,000.

“Secured Creditors”:

as defined in the Security Documents.

“Security Agreements”:

as defined in Section 6.1(a)(iii).

“Security Documents”:

collectively, the Security Agreements, the Mortgage, each of the Pledge

Agreements each Subsidiary Guarantee Agreement, each Additional Security

Document and all other agreements, assignments, security agreements,

instruments and documents executed in connection therewith, in each case as the

same may be amended, supplemented, restated or otherwise modified and in

effect.  For purposes of this Agreement,

“Security Documents” shall also include all guaranties, security agreements,

mortgages, pledge agreements, collateral assignments, subordination agreements

and other collateral documents in the nature of any thereof entered into by

Borrower or any Subsidiary of Borrower after the date of this Agreement in

favor of Agent for the benefit of the Lenders in satisfaction of the

requirements of any Loan Document.

“S&P”:

Standard & Poor’s Ratings Services, a division of the McGraw Hill

Companies, Inc. or any successor to the rating agency business thereof.

“Standby Letter of Credit”: as defined in Section

2.9(a).

“Stated Amount” or “Stated Amounts”:

with respect to any Letter of Credit issued in Dollars, the stated or face

amount of such Letter of Credit to the extent available at the time for drawing

(subject to presentment of all requisite documents), as the same may be

increased or decreased from time to time in accordance with the terms of such

Letter of Credit.  For purposes of

calculating the Stated Amount of any Letter of Credit at any time:

(i)            any increase in the Stated Amount of

any Letter of Credit by reason of any amendment to any Letter of Credit shall

be deemed effective under this Agreement as of the date Facing Agent actually

issues an amendment purporting to increase the Stated Amount of such Letter of

Credit, whether or not Facing Agent receives the consent of the Letter of

Credit beneficiary or beneficiaries to the amendment, except that if Borrower has

required that the increase in Stated Amount be given effect as of an earlier

date and Facing Agent issues an amendment to that effect, then such increase in

Stated Amount shall be deemed effective under this Agreement as of such earlier

date requested by Borrower; and

(ii)           any reduction in the Stated Amount of

any Letter of Credit by reason of any amendment to any Letter of Credit shall

be deemed effective under this Agreement as of the later of (x) the date Facing

Agent actually issues an amendment purporting to reduce the Stated Amount of

such Letter of Credit, whether or not the amendment provides that the reduction

be given effect as of an earlier date, or (y) the date Facing Agent receives

the written consent (including by telex or facsimile transmission) of the

Letter of Credit beneficiary or beneficiaries to such reduction, whether

written consent must be dated on or after the date of the amendment issued by

Facing Agent purporting to effect such reduction.

“Subsidiary”: as

to any Person, any corporation, partnership (limited or general), limited

liability company, trust or other entity of which a majority of the stock (or

equivalent ownership or controlling interest) having voting power to elect a

majority of the board of directors (if a corporation) or to select the trustee

or equivalent controlling interest, shall, at the time such reference becomes

operative, be directly or indirectly owned or controlled by such Person or one

or more of the other subsidiaries of such Person or any combination thereof.  Unless otherwise qualified, all references

to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a

Subsidiary or Subsidiaries of Borrower.

“Subsidiary Guarantee

Agreement”: the Subsidiary Guarantee Agreement in substantially the form of

Exhibit 6.1(a)(v) hereto, as the same may be amended, supplemented or

otherwise modified from time to time in accordance with its terms and the terms

hereof.

“Subsidiary Guarantor”:

such Subsidiaries which are parties to the Subsidiary Guarantee Agreement or

which pursuant to Section 7.12 from time to time become a party to the

Subsidiary Guarantee Agreement and collectively, all of such Subsidiaries.

"Subsidiary

Guarantor Security Agreement" as defined in Section 6.1(a)(iii).

“Swing Line Commitment”:

of the Swing Line Lender at any date, the obligation of the Swing Line Lender

to make Swing Line Loans pursuant to Section 2.2 in the amount referred

to therein.

“Swing Line Lender”:

BT.

“Swing Line Loans”:

as defined in Section 2.2(a).

“Swing Line Loan Participation

Certificate”: a certificate, substantially in the form of Exhibit 2.2(e).

“Swing Line Note”:

as defined in Section 2.2(b).

 “Taxes”: any present or future taxes,

levies, imposts, duties or other charges of whatever nature imposed by any

government or any political subdivision or taxing authority thereof, other than

any tax on, or measured by, the net income of any applicable Lender.

“Term Facility”:

the credit facility under this Agreement evidenced by the Term Loans.

“Term Lender”: any

Converting Lender that is owed a Term Loan following the Term Loan Conversion.

“Term Loan” and “Term

Loans”: as defined in Section 2.1(a).

"Term Loan

Conversion": as defined in Section 2.1(a).

"Term Loan

Conversion Notice": a Term Loan Conversion Notice substantially in the

form of Exhibit 11.10 annexed hereto, delivered on or prior to the

Restatement Date and made a part hereof made by any applicable Lender.

“Term Loan Maturity

Date”: May 15, 2003 or such earlier date as the outstanding Term Loans

shall have been reduced to $0 pursuant to this Agreement.

“Term Note”: as

defined in Section 2.2(a).

“Termination Date”:

the earlier to occur of

(a)           May 15, 2003; and

(b)           the date on which the Commitments

shall otherwise terminate in accordance with the provisions of this Agreement.

“Termination Event”:

(i) a Reportable Event (other than a Reportable Event not subject to the

provisions for 30-day notice to the PBGC), or (ii) the withdrawal of Borrower

or any of its ERISA Affiliates from a Plan during a plan year in which it was a

“substantial employer” as defined in Section 4001(a)(2) of ERISA, or (iii) the

filing of a notice of intent to terminate a Plan in a distress termination

under Section 4041 of ERISA, or (iv) the institution of proceedings to

terminate a Plan by the PBGC, or (v) any other event or condition which could

reasonably be expected to constitute grounds under Section 4042 of ERISA

for the involuntary termination of, or the appointment of a trustee to

administer, any Plan, or (vi) the imposition of liability of Borrower or any of

its ERISA Affiliates pursuant to Sections 4064 or 4069 of ERISA, which, in the

case of any event described in clauses (i) through (vi) above, would cause the

sum of Borrower’s and its ERISA Affiliates’ liabilities (after giving effect to

the tax consequences thereof) resulting from or otherwise associated with such

event to exceed $10,000,000.

“Third Quarter 2001

Nonrecurring Charges” means, with respect to any period of four consecutive

fiscal quarters which includes September 30, 2001, actual non-recurring charges

of the Borrower and its Subsidiaries in an amount up to $3,500,000.

“Total Available

Revolving Commitment”: at the time any determination thereof is made, the

sum of the respective Available Revolving Commitments of the Revolving Lenders

at such time.

“Total Revolving

Commitment”: at any time any determination is to be made, the sum of the

respective Revolving Commitments of the Revolving Lenders at such time.

“Transaction”:

shall mean and include (i) each of the Credit Events occurring on the

Restatement Date, (ii) such other transactions as are contemplated by the

Documents, and (iii) the payment of fees and expenses in connection with the

foregoing.

“Type”: as to any

Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

“Unmatured Event of

Default”: an event, act, condition or occurrence which with the giving of

notice or the lapse of time (or both) would become an Event of Default.

“Unpaid

Drawing”: as defined in Section 2.9(d).

“U.S.”: the United

States of America, its territories, its possessions and all other areas subject

to its jurisdiction.

“Voting Securities”:

any class of Capital Stock of a Person pursuant to which the holders thereof

have, at the time of determination, the general voting power under ordinary

circumstances to vote for the election of directors, managers, trustees or

general partners of such Person (irrespective of whether or not at the time any

other class or classes will have or might have voting power by reason of the

happening of any contingency).

“Wholly–Owned

Subsidiary”: with respect to any Person, any Subsidiary of such Person, all

of the outstanding shares of capital stock of which (other than qualifying

shares required to be owned by directors) are at the time owned directly or

indirectly by such Person and/or one or more Wholly–Owned Subsidiaries of

such Person.

“Withdrawal Liability”:

liability to a Multiemployer Plan as a result of a complete or partial

withdrawal of Borrower or any of its Subsidiaries from such Multiemployer Plan,

as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“written” or “in

writing”: any form of written communication or a communication by means of

a telecopier device or authenticated telex, telegraph or cable.

1.2           Accounting Terms, Financial

Statements.  All accounting

terms used herein shall have the respective meanings given to them in

accordance with GAAP, unless otherwise provided herein.  All computations and determinations for

purposes of determining compliance with the financial requirements of this

Agreement shall be made in accordance with GAAP, unless otherwise provided

herein.

1.3           Other Definitional Terms.  The words “hereof”, “herein” and “hereunder”

and words of similar import when used in this Agreement shall refer to this Agreement

as a whole and not to any particular provision of this Agreement, and Article,

Section, Recital, Schedule, Exhibit and like references are to this Agreement

unless otherwise specified.

ARTICLE

II

AMOUNT AND TERMS OF CREDIT

2.1           The Commitments.

(a)           Term Loans.  On

the Restatement Date, each Converting Lender, severally and for itself alone,

hereby agrees, on the terms and subject to the conditions hereinafter set forth

and in reliance upon the representations and warranties set forth herein and in

the other Loan Documents, to convert a portion of its outstanding Revolving

Loans in a principal amount equal to the amount set forth opposite each such

Lender's name on Schedule 2.1(a) hereto or in any Term Loan Conversion

Notice delivered by such Lender to term loans (in each case such Converting

Lender's "Converted Term Loan Amount" and each such loan as

converted, a "Term Loan" and collectively, the "Term

Loans").  Each Lender's

Revolving Commitment in effect immediately prior to the Restatement Date shall,

on the Restatement Date, be reduced by its Converted Term Loan Amount, if any

(collectively, the "Term Loan Conversion").  Except as hereinafter provided, Term Loans

may, at the option of Borrower, be maintained as and/or converted into Base

Rate Loans or Eurodollar Loans.  No

amount of a Term Loan which is repaid or prepaid by Borrower may be reborrowed

hereunder.  The maximum amount of

Revolving Loans that may be converted to Term Loans shall be an aggregate

principal amount of $125,000,000.

(b)           Revolving Loans.

(i)            Revolving Loan

Commitment.  Each Lender severally

and for itself alone, hereby agrees, on the terms and subject to the conditions

hereinafter set forth and in reliance upon the representations and warranties

set forth herein and in the other Loan Documents, to make loans to Borrower on

a revolving basis from time to time during the Commitment Period, in an amount

not to exceed its Commitment Percentage of the Total Available Revolving

Commitment (each such loan by any Lender, a “Revolving Loan” and

collectively, the “Revolving Loans”). 

All Revolving Loans comprising the same Borrowing hereunder shall be

made by the Revolving Lenders simultaneously and in proportion to their

respective Revolving Commitments.  Prior

to the Termination Date, Revolving Loans may be repaid and reborrowed by

Borrower in accordance with the provisions hereof and, except as otherwise

specifically provided in Section 3.6, all Revolving Loans comprising the

same Borrowing shall at all times be of the same Type.  Notwithstanding anything else herein to the

contrary, the parties hereby acknowledge that upon the effectiveness of this

Agreement on the Restatement Date, the Total Revolving Commitment in effect

immediately prior to the Restatement Date (which, for the avoidance of doubt,

is acknowledged to be $220,000,000) shall be permanently reduced by (A) the

Aggregate Converted Term Loan Amount; and (B) the Revolver Commitment

Reduction.

(c)           Swing Line Loans.

(i)            Swing Line Commitment.  Subject to the terms and conditions hereof, the Swing Line Lender

in its individual capacity agrees to make swing line loans in Dollars (“Swing

Line Loans”) to Borrower on any Business Day from time to time during the

Commitment Period in an aggregate principal amount at any one time outstanding

not to exceed $10,000,000; provided, however, that in no event

may the amount of any Borrowing of Swing Line Loans (A) exceed the Total

Available Revolving Commitment immediately prior to such Borrowing (after

giving effect to the use of proceeds thereof) or (B) cause the outstanding

Revolving Loans of any Lender, when added to such Lender’s Commitment

Percentage of the then outstanding Swing Line Loans and Commitment Percentage

of the aggregate LC Obligations (exclusive of Unpaid Drawings relating to LC

Obligations which are repaid with the proceeds of, and simultaneously with the

incurrence of, Revolving Loans or Swing Line Loans) to exceed such Lender’s

Revolving Commitment.  Amounts borrowed

by Borrower under this Section 2.1(c)(i) may be repaid and, at any time

prior to the Termination Date, reborrowed. 

The Swing Line Loans shall be made in Dollars and maintained as Base

Rate Loans and, notwithstanding Section 2.6, shall not be converted into

any other Type of Loan.

(ii)           Refunding of Swing Line Loans.  The Swing Line Lender, at any time in its

sole and absolute discretion, may on behalf of Borrower (which hereby

irrevocably directs the Swing Line Lender to so act on its behalf) notify each

Lender (including the Swing Line Lender) to make a Revolving Loan in an amount

equal to such Lender’s Commitment Percentage of the principal amount of the

Swing Line Loans (the “Refunded Swing Line Loans”) outstanding on the

date such notice is given, provided, however, that such notice

shall be deemed to have automatically been given upon the occurrence of an

Event of Default under Sections 9.1(g) or 9.1(h) or upon the

occurrence of a Change of Control. 

Unless any of the events described in Sections 9.1(g) or 9.1(h)

shall have occurred (in which event the procedures of Section 2.1(c)(iii)

shall apply) and regardless of whether the conditions precedent set forth in

this Agreement to the making of a Revolving Loan are then satisfied, each

Lender shall make the proceeds of its Revolving Loan available to the Swing

Line Lender at the Payment Office prior to 11:00 A.M., New York City time, in

funds immediately available on the Business Day next succeeding the date such

notice is given.  The proceeds of such

Revolving Loans shall be immediately applied to repay the Refunded Swing Line

Loans.

(iii)          Participation in Swing Line Loans.  If, prior to refunding a Swing Line Loan

with a Revolving Loan pursuant to Section 2.1(c)(ii), one of the events

described in Sections 9.1(g) or 9.1(h) shall have occurred,

or if for any other reason a Revolving Loan cannot be made pursuant to Section

2.1(c)(ii), then, subject to the provisions of Section 2.1(c)(iv)

below, each Lender will, on the date such Revolving Loan was to have been made,

purchase (without recourse or warranty) from the Swing Line Lender an undivided

participation interest in the Swing Line Loans in an amount equal to its

Commitment Percentage of such Swing Line Loans.  Upon request, each Lender will immediately transfer to the Swing

Line Lender, in immediately available funds, the amount of its participation

and upon receipt thereof the Swing Line Lender will deliver to such Lender a

Swing Line Loan Participation Certificate dated the date of receipt of such

funds and in such amount.

(iv)          Lenders’ Obligations Unconditional.  Each Lender’s obligation to make Revolving

Loans in accordance with Section 2.1(c)(ii) and to purchase

participating interests in accordance with Section 2.1(c)(iii) above

shall be absolute and unconditional and shall not be affected by any

circumstance, including, without limitation, (A) any setoff, counterclaim,

recoupment, defense or other right which such Lender may have against the Swing

Line Lender, Borrower or any other Person for any reason whatsoever; (B) the

occurrence or continuance of any Event of Default or Unmatured Event of

Default; (C) any adverse change in the condition (financial or otherwise) of

Borrower or any other Person; (D) any breach of this Agreement by Borrower or

any other Person; (E) any inability of Borrower to satisfy the conditions

precedent to borrowing set forth in this Agreement on the date upon which such

participating interest is to be purchased or (F) any other circumstance,

happening or event whatsoever, whether or not similar to any of the foregoing.  If any Lender does not make available to the

Swing Line Lender the amount required pursuant to Section 2.1(c)(ii) or (iii)

above, as the case may be, the Swing Line Lender shall be entitled to recover

such amount on demand from such Lender, together with interest thereon for each

day from the date of non-payment until such amount is paid in full at the

Federal Funds Rate for the first two Business Days and at the Base Rate

thereafter.  Notwithstanding the

foregoing provisions of this Section 2.1(c)(iv), no Lender shall be required

to make a Revolving Loan to Borrower for the purpose of refunding a Swing Line

Loan pursuant to Section 2.1(c)(ii) above or to purchase a participating

interest in a Swing Line Loan pursuant to Section 2.1(c)(iii) if an

Event of Default or Unmatured Event of Default has occurred and is continuing

and, prior to the making by the Swing Line Lender of such Swing Line Loan, the

Swing Line Lender had received written notice from such Lender specifying that

such Event of Default or Unmatured Event of Default has occurred and is

continuing, describing the nature thereof and stating that, as a result

thereof, such Lender shall cease to make such Refunded Swing Line Loans and

purchase such participating interests, as the case may be; provided, however,

that the obligation of such Lender to make such Refunded Swing Line Loans and

to purchase such participating interests shall be reinstated upon the earlier

to occur of (y) the date upon which such Lender notifies the Swing Line Lender

that its prior notice has been withdrawn and (z) the date upon which the Event

of Default or Unmatured Event of Default specified in such notice no longer is

continuing.

2.2           Notes.

(a)           Evidence of Indebtedness.  Borrower’s obligation to pay the principal

of and interest on all the Loans made to it by each Lender shall be evidenced,

(x) if Term Loans, by a promissory note (each, a “Term Note” and

collectively, the “Term Notes”) duly executed and delivered by Borrower

substantially in the form of Exhibit 2.2(a)-1 hereto, with blanks appropriately

completed in conformity herewith, (y) if Revolving Loans, by a promissory note

(each, a “Revolving Note” and, collectively, the “Revolving Notes”)

duly executed and delivered by Borrower substantially in the form of Exhibit

2.2(a)-2 hereto, with blanks appropriately completed in conformity herewith

and (z) if Swing Line Loans, by a promissory note (the ”Swing Line Note”)

duly executed and delivered by Borrower substantially in the form of Exhibit

2.2(a)-3 hereto, with blanks appropriately completed in conformity

herewith.

(i)            Provisions of the Term Notes.  The Term Note issued to each Term Lender

shall (A) be executed by Borrower, (B) be payable to the order of such Term

Lender and be dated the Restatement Date, (C) be in a stated principal amount

equal to the Converted Term Loan Amount of such Term Lender and be payable in

the aggregate principal amount of the Term Loan evidenced thereby, (D) mature,

with respect to each Term Loan evidenced thereby, on the Term Loan Maturity

Date, (E) be subject to mandatory prepayment as provided in Section 4.3,

(F) bear interest as provided in Section 3.1 in respect of the Base Rate

Loans and Eurodollar Loans, as the case may be, evidenced thereby and (G) be

entitled to the benefits of this Agreement and the other applicable Loan

Documents.

(ii)           Provisions of the Revolving Notes.  The Revolving Note issued to each Lender

shall (A) be executed by Borrower, (B) be payable to the order of such Lender

and be dated the Restatement Date, (C) be in a stated principal amount equal to

the Revolving Commitment of such Revolving Lender and be payable in the

aggregate principal amount of the Revolving Loans evidenced thereby, (D)

mature, with respect to each Loan evidenced thereby, on the Termination Date,

(E) be subject to mandatory prepayment as provided in Section 4.3, (F)

bear interest as provided in the appropriate clause of Section 3.1 in

respect of the Base Rate Loans or Eurodollar Loans, as the case may be,

evidenced thereby and (G) be entitled to the benefits of this Agreement and the

other applicable Loan Documents.

(iii)          Provisions of the Swing Line Note.  The Swing Line Note issued to the Swing Line

Lender shall (A) be executed by Borrower, (B) be payable to the order of Swing

Line Lender or its registered assigns and be dated the Initial Borrowing Date,

(C) be in a stated principal amount equal to the Swing Line Commitment and be

payable in the aggregate principal amount of the Swing Line Loans evidenced

thereby, (D) mature, with respect to each Loan evidenced thereby, five (5)

Business Days prior to the Termination Date, (E) be subject to mandatory

prepayment as provided in Section 4.3, (F) bear interest as provided in Section

3.1 in respect of the Base Rate Loans evidenced thereby and (G) be entitled

to the benefits of this Agreement and the other applicable Loan Documents.

(b)           Notation of Payments.  Each Lender will note on its internal

records the amount of each Loan made by it and each payment in respect thereof

and will, prior to any transfer of any of its Notes, endorse on the reverse

side thereof the outstanding principal amount of Loans evidenced thereby.  Failure to make any such notation shall not

affect Borrower’s or any guarantor’s obligations hereunder or under the other

applicable Loan Documents in respect of such Loans.

2.3           Minimum Amount of Each

Borrowing; Maximum Number of Borrowings.  The aggregate principal amount of each Borrowing by Borrower

hereunder shall be not less than (i) in the case of a Base Rate Loan,

$5,000,000 and, if greater, shall be in integral multiples of $1,000,000 above

such minimum (or, if less, the then Total Available Revolving Commitment) and

(ii) in the case of a Eurodollar Loan, $5,000,000 and, if greater, shall be in

integral multiples of $1,000,000 above such minimum and (iii) in the case of a

Swing Line Loan, $1,000,000 and, if greater, shall be in integral multiples of

$500,000 above such minimum.  More than

one Borrowing may be incurred on any date; provided that at no time

shall there be outstanding more than five (5) Borrowings of Eurodollar Loans.

2.4           Borrowing

Options. The Term Loans and the Revolving Loans shall, at the option of

Borrower except as otherwise provided in this Agreement, be (i) Base Rate

Loans, (ii) Eurodollar Loans, or (iii) part Base Rate Loans and part Eurodollar

Loans.  As to any Eurodollar Loan, any

Lender may, if it so elects, fulfill its commitment by causing a foreign branch

or affiliate to make or continue such Loan, provided that in such event that Lender’s

Commitment Percentage of the Loan shall, for the purposes of this Agreement, be

considered to have been made by that Lender and the obligation of Borrower to

repay that Lender’s Commitment Percentage of the Loan shall nevertheless be to

that Lender and shall be deemed held by that Lender, for the account of such

branch or affiliate.

2.5           Notice

of Borrowing.  Whenever Borrower

desires to make a Borrowing of any Loan hereunder, it shall give Agent at its

office located at One Bankers Trust Plaza, 130 Liberty Street, New York, New

York 10006 (or such other address as the Agent may hereafter designate in

writing to the parties hereto) (the “Notice Address”) at least one

Business Day’s prior written notice (or telephonic notice promptly confirmed in

writing), given not later than 12:00 P.M. (New York City time) of each Base

Rate Loan, and at least three Business Days’ prior written notice (or

telephonic notice promptly confirmed in writing), given not later than 12:00

P.M. (New York City time), of each Eurodollar Loan to be made hereunder; provided,

however, that a Notice of Borrowing with respect to Borrowings to be

made on the date hereof may, at the discretion of Agent, be delivered later

than the time specified above.  Whenever

Borrower desires that Swing Line Lender make a Swing Line Loan under Section

2.1(c), it shall deliver to Swing Line Lender prior to 11:00 A.M. (New York

City time) on the date of Borrowing written notice (or telephonic notice

promptly confirmed in writing).  Each

such notice (each a “Notice of Borrowing”), which shall be in the form

of Exhibit 2.5 hereto, shall be irrevocable, shall be deemed a

representation by Borrower that all conditions precedent to such Borrowing have

been satisfied and shall specify (i) the aggregate principal amount of the

Loans to be made pursuant to such Borrowing, (ii) the date of Borrowing (which

shall be a Business Day) and (iii) whether the Loans being made pursuant to

such Borrowing are to be Base Rate Loans or Eurodollar Loans and, with respect

to Eurodollar Loans, the Interest Period to be applicable thereto.  Agent shall as promptly as practicable give

each Lender written or telephonic notice (promptly confirmed in writing) of

each proposed Borrowing, of such Lender’s Commitment Percentage thereof and of

the other matters covered by the Notice of Borrowing.  Without in any way limiting Borrower’s obligation to confirm in

writing any telephonic notice, Agent or the Swing Line Lender (in the case of

Swing Line Loans) may act without liability upon the basis of telephonic notice

reasonably believed by Agent in good faith to be from a Responsible Officer of

Borrower prior to receipt of written confirmation.  Agent’s records shall, absent demonstrable error, be final,

conclusive and binding on Borrower with respect to evidence of the terms of

such telephonic Notice of Borrowing.

2.6           Conversion

or Continuation.  Borrower may

elect (i) on any Business Day occurring on or after the earlier of (i) the 30th

day after the Initial Borrowing Date and (ii) the Syndication Date to convert

Base Rate Loans or any portion thereof to Eurodollar Loans and (ii) at the end

of any Interest Period with respect thereto, to convert Eurodollar Loans or any

portion thereof into Base Rate Loans or to continue such Eurodollar Loans or

any portion thereof for an additional Interest Period; provided, however,

that the aggregate principal amount of the Eurodollar Loans for each Interest

Period therefor must be in an aggregate principal amount of $5,000,000 or

an integral multiple of $1,000,000 in excess thereof.  Each conversion or continuation of Revolving Loans shall be

allocated among the Revolving Loans of the Revolving Lenders in accordance with

their respective Commitment Percentages and each conversion or continuation of

Term Loans shall be allocated among the Term Loans of the Term Lenders in

accordance with their respective Commitment Percentages.  Each such election shall be in substantially

the form of Exhibit 2.6 hereto (a “Notice of Conversion or

Continuation”) and shall be made by giving Agent at least three Business

Days’ prior written notice thereof to the Notice Address specifying (i) the

amount and type of conversion or continuation, (ii) in the case of a conversion

to or a continuation of Eurodollar Loans, the Interest Period therefor, (iii)

whether such conversion or continuation is made with respect to Revolving Loans

or Term Loans and (iv) in the case of a conversion, the date of conversion

(which date shall be a Business Day and, if a conversion from Eurodollar Loans,

shall also be the last day of the Interest Period therefor).  Notwithstanding the foregoing, no conversion

in whole or in part of Base Rate Loans to Eurodollar Loans, and no continuation

in whole or in part of Eurodollar Loans upon the expiration of any Interest

Period therefor, shall be permitted at any time at which an Unmatured Event of

Default or an Event of Default shall have occurred and be continuing.  If, within the time period required under

the terms of this Section 2.6, Agent does not receive a Notice of

Conversion or Continuation from Borrower containing a permitted election to

continue any Eurodollar Loans for an additional Interest Period or to convert

any such Loans, then, upon the expiration of the Interest Period therefor, such

Loans will be automatically converted to Base Rate Loans.  Each Notice of Conversion or Continuation

shall be irrevocable.

2.7           Disbursement of Funds; Funding

Assumptions.

(a)           No

later than 12:00 P.M. (New York City time) on the date specified in each Notice

of Borrowing, each Lender will make available its Commitment Percentage of

Revolving Loans of the Borrowing requested to be made on such date in Dollars

and in immediately available funds, at the office (the “Payment Office”)

of Agent located at One Bankers Trust Plaza, 130 Liberty Street, New York, New

York 10006 (for the account of such non-U.S. office of Agent as Agent may

direct in the case of Eurodollar Loans) and Agent will make available to

Borrower at its Payment Office the aggregate of the amounts so made available

by the Lenders.

(b)           Unless

Agent shall have been notified by any Lender at least one Business Day prior to

the date of Borrowing that such Lender does not intend to make available to

Agent such Lender’s portion of the Loans to be purchased or Borrowing to be

made on such date, Agent may assume that such Lender has made such amount

available to Agent on such date of Borrowing and Agent may, but shall not be

required to, in reliance upon such assumption, make available to Borrower a

corresponding amount.  If such

corresponding amount is not in fact made available to Agent by such Lender on

the date of Borrowing, Agent shall be entitled to recover such corresponding

amount on demand from such Lender. If such Lender does not pay such

corresponding amount forthwith upon Agent’s demand therefor, Agent shall

promptly notify Borrower and, if so notified, Borrower shall immediately pay

such corresponding amount to Agent. 

Agent shall also be entitled to recover from Borrower interest on such

corresponding amount in respect of each day from the date such corresponding

amount was made available by Agent to Borrower to the date such corresponding

amount is recovered by Agent, at a rate per annum equal to the rate for Base

Rate Loans or Eurodollar Loans, as the case may be, applicable during the

period in question, provided, however, that any interest paid to

Agent in respect of such corresponding amount shall be credited against

interest payable by Borrower to such lender under Section 3.1 in respect

of such corresponding amount.  Any

amount due hereunder to Agent from any Lender which is not paid when due shall

bear interest payable by such Lender, from the date due until the date paid, at

the Federal Funds Rate for the first three days after the date such amount is

due and thereafter at the Federal Funds Rate plus 1%, together with Agent’s

standard interbank processing fee. 

Further, such Lender shall be deemed to have assigned any and all

payments made of principal and interest on its Loans,  amounts due with respect to its Letters of Credit (or its participations

therein) and any other amounts due to it hereunder first to Agent to fund any

outstanding Loans made available on behalf of such Lender by Agent pursuant to

this Section 2.7 until such Loans have been funded (as a result of

such assignment or otherwise) and then to fund Loans of all Lenders other than

such Lender until each Lender has outstanding Loans equal to its Commitment

Percentage of all Revolving Loans and Term Loans (as a result of such

assignment or otherwise).  Such Lender

shall not have recourse against Borrower with respect to any amounts paid to

Agent or any Lender with respect to the preceding sentence; provided, that such

Lender shall have full recourse against Borrower to the extent of the amount of

such loans it has in fact made.  Nothing

herein shall be deemed to relieve any Lender from its obligation to fulfill its

Revolving Commitment hereunder or to prejudice any rights which Borrower may

have against the Lender as a result of any default by such Lender hereunder.

2.8           Pro Rata

Borrowings.  All Borrowings of

Revolving Loans under this Agreement shall be loaned by the Lenders pro rata on

the basis of their Revolving Commitments. 

No Lender shall be responsible for any default by any other Lender in

its obligation to make Loans hereunder and each Lender shall be obligated to

make the Loans provided to be made by it hereunder, regardless of the failure

of any other Lender to fulfill its Revolving Commitment or make Revolving Loans

hereunder.

2.9           Amount and Terms of Letter of Credit.

(a)           Letter of Credit Commitments,

Terms of Letters of Credit.

(i)            Subject to and upon the terms and conditions herein set

forth and such other conditions as are applicable to its customers generally,

at any time and from time to time on or after the Initial Borrowing Date and

prior to the 30th Business Day preceding the Termination Date, BT agrees to

issue, in its own name (in such capacity, “Facing Agent”), but for the

ratable benefit of all Revolving Lenders (including Facing Agent) one or more

Letters of Credit, each having a Stated Amount in Dollars, for the account of

Borrower in an aggregate undrawn amount at any one time outstanding that

together with the aggregate Stated Amount of other Letters of Credit then

outstanding, does not exceed $15,000,000; provided, however, that

Facing Agent shall not issue or extend the expiration of any Letter of Credit

if, immediately after giving effect to such issuance or extension, (A) the

aggregate LC Obligations at such time would exceed $15,000,000 or (B) the Available

Revolving Commitment of any Revolving Lender would be less than zero.  Each Revolving Lender severally, but not

jointly, agrees to participate in each such Letter of Credit issued by Facing

Agent to the extent of its Commitment Percentage and to make available to

Facing Agent such Revolving Lender’s Commitment Percentage of any payment made

to the beneficiary of such Letter of Credit to the extent not reimbursed by

Borrower; provided, however, that no Revolving Lender shall be

required to participate in any Letter of Credit to the extent that such

participation therein would exceed such Revolving Lender’s Available Revolving

Commitment then in effect. No Lender’s obligation to participate in any Letter

of Credit or to make available to Facing Agent such Revolving Lender’s

Commitment Percentage of any Letter of Credit Payment made by Facing Agent

shall be affected by any other Revolving Lender’s failure to participate in the

same or any other Letter of Credit or by any other Revolving Lender’s failure to

make available to Facing Agent such other Revolving Lender’s Commitment

Percentage of any Letter of Credit Payment. 

Notwithstanding the foregoing, in the event a Lender Default exists,

Facing Agent shall not be required to issue any Letter of Credit unless Facing

Agent has entered into arrangements satisfactory to it and Borrower to

eliminate such Facing Agent’s risk with respect to the participation in Letters

of Credit of the Defaulting Lender or Lenders, including by cash

collateralizing such Defaulting Lender’s or Lenders’ Commitment Percentage of

the LC Obligations.

(ii)           Each Letter of Credit issued or to be issued hereunder

shall have an expiration date of one (1) year or less from the issuance date

thereof; provided, however, that each Standby Letter of Credit

may provide by its terms that it will be automatically extended for additional

successive one (1) year periods unless Facing Agent shall have given notice to

the applicable beneficiary (with a copy to Borrower) of the election by Facing

Agent (such election to be in the sole and absolute discretion of Facing Agent)

not to extend such Letter of Credit; provided, further, that no

Standby Letter of Credit or extension thereof shall be stated to expire later

than the 10th Business Day preceding the Termination Date.

(b)           Procedure for Issuance of Letters

of Credit.  Whenever Borrower

desires the issuance of a Letter of Credit hereunder, it shall give Agent and

Facing Agent at least three (3) Business Days’ prior written notice (or such

shorter period as may be agreed to by Borrower, Agent and Facing Agent)

specifying the day of issuance thereof (which day shall be a Business Day),

such notice to be given prior to 11:00 A.M. (New York City time) on the date

specified for the giving of such notice. 

Each such notice (each, a “Letter of Credit Request”) shall be in

the form of Exhibit 2.9 hereto and shall specify (A) the proposed

issuance date and expiration date, (B) the name(s) of each obligor with respect

to such Letter of Credit, (C) Borrower as the account party, (D) the name and

address of the beneficiary (which Person shall be reasonably acceptable to

Facing Agent), (E) the Stated Amount of such proposed Letter of Credit and (F)

the purpose of such Letter of Credit and such other information as Facing Agent

may reasonably request.  In addition,

each Letter of Credit Request shall contain a description of the terms and

conditions to be included in such proposed Letter of Credit.  Promptly after the issuance of or amendment

to a Standby Letter of Credit, the Facing Agent shall notify the Borrower and

the Agent, in writing, of such issuance or amendment, and such notice shall be

accompanied by a copy of such issuance or amendment.  Upon receipt of such notice, the Agent shall notify the Revolving

Lenders, in writing of such issuance or amendment and if requested to by a

Revolving Lender, the Agent shall provide such Revolving Lender with a copy of

such issuance or amendment.  Unless

otherwise specified, all Letters of Credit will be governed by Uniform Customs

and Practice for Documentary Credits (the "UCP").  On the Business Day specified by Borrower

and upon fulfillment or waiver of the applicable conditions set forth in Article

VI,  Facing Agent will issue the

requested Letter of Credit to the applicable beneficiary.

(c)           Draws upon Letters of Credit;

Reimbursement Obligation.  In

the event of any drawing under any Letter of Credit by the beneficiary thereof,

Facing Agent shall give telephonic notice to Borrower and Agent (x) confirming

such drawing and (y) of the date on or before which Facing Agent intends to

honor such drawing, and Borrower shall reimburse Facing Agent on the day on

which such drawing is honored in an amount in same day funds and like currency

equal to the amount of such drawing; provided, however, that,

anything contained in this Agreement to the contrary notwithstanding, (i)

unless Borrower shall have notified Agent and Facing Agent prior to 11:00 A.M.

(New York City time) on the Business Day Facing Agent intends to honor such

drawing that Borrower intends to reimburse Facing Agent for the amount of such

drawing with funds other than the proceeds of Revolving Loans, Borrower shall

be deemed to have timely given a Notice of Borrowing to Agent requesting each

Revolving Lender to make Revolving Loans which are Base Rate Loans on the date

on which such drawing is honored in an amount equal to the amount of such

drawing and (ii) subject to satisfaction or waiver of the conditions specified

in Section 6.2, each such Revolving Lender shall, on the date of such

drawing, make Revolving Loans which are Base Rate Loans in the amount of its

Commitment Percentage of such drawing, the proceeds of which shall be applied

directly by Agent to reimburse Facing Agent for the amount of such drawing; provided,

further, that, if for any reason, proceeds of Revolving Loans are not

received by Facing Agent on such date in an amount equal to the amount of such

drawing, Borrower shall reimburse Facing Agent, on the Business Day immediately

following the date of such drawing, in an amount in same day funds equal to the

excess of the amount of such drawing over the amount of such Revolving Loans,

if any, which are so received, plus accrued interest on such amount at the rate

set forth in Section 3.1(a).

(d)           Lenders’ Participation in Letters

of Credit.  In the event that

Borrower shall fail to reimburse Facing Agent as provided in Section 2.9(c)

in an amount equal to the amount of any drawing honored by Facing Agent under a

Letter of Credit issued by it in accordance with the terms hereof, Facing Agent

shall promptly notify Agent and Agent shall promptly notify each Revolving

Lender of the unreimbursed amount of such drawing and of such Revolving

Lender’s respective participation therein. 

Each such Lender shall make available to Facing Agent an amount equal to

its Commitment Percentage of such drawing in same day funds, at the office of

Facing Agent specified in such notice, not later than 1:00 P.M. (New York City

time) on the Business Day after the date such Revolving Lender is notified by

Agent.  In the event that any such

Revolving Lender fails to make available to Facing Agent the amount of such

Revolving Lender’s participation in such Letter of Credit as provided in this Section 2.9(d),

Facing Agent shall be entitled to recover such amount on demand from such

Lender together with interest at the Federal Funds Effective Rate for two

Business Days and thereafter at the Base Rate. 

Nothing in this Section 2.9(d) shall be deemed to prejudice the

right of any Revolving Lender to recover from Facing Agent any amounts made

available by such Revolving Lender to Facing Agent pursuant to this Section

2.9(d) in the event that it is determined that the payment with respect to

a Letter of Credit by Facing Agent in respect of which payment was made by such

Revolving Lender constituted gross negligence or willful misconduct as

determined by a court of competent jurisdiction on the part of Facing

Agent.  Facing Agent shall distribute to

each other Revolving Lender which has paid all amounts payable by it under this

Section 2.9(d) with respect to any Letter of Credit issued by Facing

Agent such other Revolving Lender’s Commitment Percentage of all payments

received by Facing Agent from Borrower in reimbursement of drawings honored by

Facing Agent under such Letter of Credit when such payments are received.  Upon any change in the Revolving Commitments

of the Revolving Lenders pursuant to Section 3.7 or 12.8(c) or

otherwise, it is hereby agreed that, with respect to all LC Obligations, there

shall be an automatic adjustment to the participations pursuant to this Section 2.9(d)

to reflect the new Commitment Percentages of the assigning Lender and the

Assignee.

(e)           Fees for Letters of Credit.

(i)            Facing Agent Fees.  Borrower agrees to pay the following amount to Facing Agent with

respect to Letters of Credit issued by it for the account of Borrower:

(A)          with respect to drawings made under

any Letter of Credit, interest, payable on demand, at a rate which is at all

times equal to 2% per annum in excess of the Base Rate on the amount paid by

Facing Agent in respect of each such drawing from the date of the drawing to

the date such amount is reimbursed by Borrower (including any such

reimbursement out of the proceeds of Revolving Loans pursuant to Section

2.9(c));

(B)           with respect to the issuance or

amendment of each Letter of Credit and each drawing made thereunder,

documentary and processing charges in accordance with Facing Agent’s standard

schedule for such charges in effect at the time of such issuance, amendment,

transfer or drawing, as the case may be; and

(C)           a facing fee as agreed to between

Borrower and the applicable Facing Bank for the applicable Letter of Credit and

unless otherwise agreed, shall be payable with respect to the maximum Stated

Amount under such outstanding Letters of Credit payable in arrears on the last

Business Day of each fiscal quarter, on the Termination Date and thereafter, on

demand together with customary issuance and drawing charges payable pursuant to

clause (B) above; provided, however, if calculation of the facing

fee in the manner set forth above would result in a facing fee of less than

$500 per year per Letter of Credit, Borrower shall be obligated to pay such

additional amount to the applicable Facing Bank so as to provide for a minimum

facing fee of $500 per year per Letter of Credit.

(ii)           Participating Lender Fees.  Borrower agrees to pay to Agent for

distribution to each participating Revolving Lender in respect of all Letters

of Credit outstanding such Revolving Lender’s Commitment Percentage of a

commission equal to the Applicable Eurodollar Rate Margin with respect to the

daily Stated Amount under such outstanding Letters of Credit (the “LC

Commission”), payable in arrears on each Quarterly Payment Date, on the

Termination Date and thereafter, on demand. 

The LC Commission shall be computed from the first day of issuance of

each Letter of Credit and on the basis of the actual number of days elapsed

over a year of 360 days.

Promptly upon

receipt by Facing Agent or Agent of any amount described in clause (ii) of this

Section 2.9(e), Facing Agent or Agent shall distribute to each Revolving

Lender that has reimbursed Facing Agent in accordance with Section 2.9(d)

its Commitment Percentage of such amount. 

Amounts payable under clauses (i)(A), (B) and (C) of this Section

2.9(e) shall be paid directly to Facing Agent.

(f)            LC Obligations Unconditional.  Subject to the last paragraph of Section 2.9(g),

the obligation of Borrower to reimburse Facing Agent for drawings made under

any Letter of Credit issued by it and the obligations of each Revolving Lender

under Section 2.9(d) with respect thereto shall be unconditional and

irrevocable and shall be paid strictly in accordance with the terms of this

Agreement under all circumstances, including, without limitation, any of the

following circumstances:

(i)            any lack of validity or enforceability of such Letter of

Credit;

(ii)           the existence of any claim, setoff, defense or other right

which Borrower or any of its Affiliates may have at any time against a

beneficiary or any transferee of such Letter of Credit (or any persons or

entities for which any such beneficiary or transferee may be acting), Facing

Agent, any Lender or any other Person, whether in connection with this

Agreement, the transactions contemplated herein or any unrelated transaction

(including any underlying transaction between Borrower or one of its

Subsidiaries and the beneficiary of such Letter of Credit);

(iii)          any draft, demand, certificate or any other document

presented under such 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, provided the same appears on its face to comply with

the draw requirements for the Letter of Credit;

(iv)          payment by Facing Agent under such Letter of Credit against

presentation of a demand, draft or certificate or other document which does not

comply with the terms of such Letter of Credit, provided the same appears on

its face to comply with the draw requirements for the Letter of Credit;

(v)           the fact that an Event of Default or an Unmatured Event of

Default shall have occurred and be continuing.

(g)           Indemnification.  In addition to amounts payable as elsewhere provided in this

Agreement, Borrower hereby agrees to protect, indemnify, pay and save Facing

Agent harmless from and against any and all claims, demands, liabilities,

damages, losses, costs, charges and expenses (including reasonable attorneys

fees) (other than for Taxes, which shall be covered by Section 4.7)

which Facing Agent may incur or be subject to as a consequence, direct or

indirect, of (i) the issuance of the Letters of Credit, other than as a result

of the gross negligence or willful misconduct of Facing Agent as determined by

a court of competent jurisdiction or (ii) the failure of Facing Agent to honor

a drawing under any Letter of Credit as a result of any act or omissions,

whether rightful or wrongful, of any present or future de jure or de facto government

or Governmental Authority (all such acts or omissions herein called “Government

Acts”).  As between Borrower and

Facing Agent, Borrower assumes all risks of the acts and omissions of, or

misuse of the Letters of Credit issued by Facing Agent by, the respective

beneficiaries of such Letters of Credit. 

In furtherance and not in limitation of the foregoing, Facing Agent

shall not be responsible: (i) for the form, validity, sufficiency, accuracy,

genuineness or legal effect of any document submitted by any party in

connection with the application for and issuance of or any drawing under such

Letters of Credit, even if it should in fact prove to be in any or all respects

invalid, insufficient, inaccurate, fraudulent or forged, provided such document

appears on its face to comply with the requirements applicable to it; (ii) for

the validity or sufficiency of any instrument transferring or assigning or

purporting to transfer or assign any such Letter of Credit or the rights or

benefits thereunder or proceeds thereof, in whole or in part, which may prove

to be invalid or ineffective for any reason; (iii) for failure of the

beneficiary of any such Letter of Credit to comply fully with conditions

required in order to draw upon such Letter of Credit; (iv) for errors,

omissions, interruptions or delays in transmission or delivery of any messages,

by mail, cable, telegraph, telex or otherwise, whether or not they be in

cipher; (v) for errors in interpretation of technical terms; (vi) for any loss

or delay in the transmission or otherwise of any document required in order to

make a drawing under any such Letter of Credit or of the proceeds thereof;

(vii) for the misapplication by the beneficiary of any such Letter of Credit of

the proceeds of any drawing under such Letter of Credit; and (viii) for any

consequences arising from causes beyond the control of Facing Agent, including,

without limitation, any Government Acts. 

None of the above shall affect, impair, or prevent the vesting of any of

Facing Agent’s rights or powers hereunder.

In furtherance and

extension and not in limitation of the specific provisions hereinabove set

forth, any action taken or omitted by Facing Agent under or in connection with

the Letters of Credit issued by it or the related certificates, if taken or

omitted in good faith, shall not put Facing Agent under any resulting liability

to Borrower.  Notwithstanding anything

to the contrary contained in this Agreement, Borrower shall have no obligation

to indemnify Facing Agent in respect of any liability incurred by Facing Agent

arising solely out of the gross negligence or willful misconduct of Facing

Agent.  The right of indemnification in

the first paragraph of this Section 2.9(g) shall not prejudice any

rights that Borrower may otherwise have against Facing Agent with respect to a

Letter of Credit issued hereunder.

(h)           Stated Amount. 

The Stated Amount of each Letter of Credit shall not be less than

$100,000 or such lesser amount as Facing Agent has agreed to.  For purposes of calculating the Stated

Amount of any Letter of Credit at any time:

(i)            any increase in the Stated Amount of any Letter of Credit

by reason of any amendment to any Letter of Credit shall be deemed effective

under this Agreement as of the date Facing Agent actually issues an amendment

purporting to increase the Stated Amount of such Letter of Credit, whether or

not Facing Agent receives the consent of the Letter of Credit beneficiary or

beneficiaries to the amendment, except that if Borrower has requested that the

increase in Stated Amount be given effect as of an earlier date and Facing

Agent issues an amendment to that effect, then such increase in Stated Amount

shall be deemed effective under this Agreement as of such earlier date

requested by Borrower; and

(ii)           any reduction in the Stated Amount of any Letter of Credit

by reason of any amendment to any Letter of Credit shall be deemed effective

under this Agreement as of the later of (x) the date Facing Agent actually

issues an amendment purporting to reduce the Stated Amount of such Letter of

Credit, whether or not the amendment provides that the reduction be given

effect as of an earlier date, or (y) the date Facing Agent receives the written

consent (including by telex or facsimile transmission) of the Letter of Credit beneficiary

or beneficiaries to such reduction, which written consent must be dated on or

after the date of the amendment issued by Facing Agent purporting to effect

such reduction.

(i)            Increased Costs.  If at any time after the Closing

Date, Facing Agent or any Lender determines that the introduction of or

any change in any applicable law, rule, regulation, order, guideline or request

or in the interpretation or administration thereof by any Governmental

Authority charged with the interpretation or administration thereof, or

compliance by Facing Agent or such Lender with any request or directive by any

such authority (whether or not having the force of law), shall either (i)

impose, modify or make applicable any reserve, deposit, capital adequacy or

similar requirement against Letters of Credit issued by Facing Agent or

participated in by any Lender, or (ii) impose on Facing Agent or any Lender any

other conditions relating, directly or indirectly, to this Agreement or any

Letter of Credit; and the result of any of the foregoing is to increase the

cost to Facing Agent or any Lender of issuing, maintaining or participating in

any Letter of Credit, or reduce the amount of any sum received or receivable by

Facing Agent or any Lender hereunder or reduce the rate of return on its

capital with respect to Letters of Credit, then, upon demand to Borrower by

Facing Agent or any Lender (a copy of which demand shall be sent by Facing

Agent or such Lender to Agent), Borrower shall pay to Facing Agent or such

Lender such additional amount or amounts as will compensate such Lender for

such increased cost or reduction in the amount receivable or reduction on the

rate of return on its capital.  In

determining such additional amounts pursuant to the preceding sentence, Facing

Agent or such Lender will act reasonably and in good faith and will, to the

extent the increased costs or reductions in amounts receivable or reductions in

rates of return relate to Facing Agent’s or such Lender’s letters of credit in

general and are not specifically attributable to the Letters of Credit

hereunder, use averaging and attribution methods which are reasonable and which

cover all letters of credit similar to the Letters of Credit issued by or

participated in by Facing Agent or such Lender whether or not the documentation

for such other Letters of Credit permit Facing Agent or such Lender to receive

amounts of the type described in this Section 2.9(i).  Facing Agent or any Lender, upon determining

that any additional amounts will be payable pursuant to this Section 2.9(i),

will give prompt written notice thereof to Borrower, which notice shall include

a certificate submitted to Borrower by Facing Agent or such Lender (a copy of

which certificate shall be sent by Facing Agent or such Lender to Agent),

setting forth in reasonable detail the basis for the calculation of such

additional amount or amounts necessary to compensate Facing Agent or such

Lender, although failure to give any such notice shall not release or diminish

Borrower’s obligations to pay additional amounts pursuant to this Section

2.9(i) provided that Borrower shall not be required to compensate a Lender

or Facing Agent pursuant to this section for any increased costs or reductions

incurred more than 180 days prior to the date that such Lender or Facing Agent,

as the case may be, notifies Borrower of the additional amounts and of such

Lender’s or Facing Agent’s intention to claim compensation therefor; provided

further that, if the change in law giving rise to such increased costs or

reductions is retroactive, then the 180-day period referred to above shall be

extended to include the period of retroactive effect thereof. The certificate

required to be delivered pursuant to this Section 2.9(i) shall, absent

demonstrable error, be final, conclusive and binding on Borrower and Facing

Agent or the Lender, as applicable.

ARTICLE III

INTEREST

AND FEES

3.1           Interest.

(a)           Base Rate Loans. 

Borrower agrees to pay interest in respect of the unpaid principal

amount of each Base Rate Loan at a rate per annum equal to the Base Rate plus

the Applicable Margin from the date the proceeds thereof are made available to

Borrower until the earlier of (i) the maturity (whether by acceleration or

otherwise) of such Base Rate Loan or (ii) the conversion of such Base Rate Loan

to a Eurodollar Loan pursuant to Section 2.6.

(b)           Eurodollar Loans.  Borrower agrees to pay interest in respect of the unpaid

principal amount of each Eurodollar Loan from the date the proceeds thereof are

made available to Borrower until the earlier of (i) the maturity (whether by

acceleration or otherwise) of such Eurodollar Loan or (ii) the conversion of

such Eurodollar Loan to a Base Rate Loan pursuant to Section 2.6 at a

rate per annum equal to the relevant Eurodollar Rate plus the Applicable Margin

(c)           Payment of Interest.  Interest on each Loan shall be payable in

arrears on each Interest Payment Date; provided, however, that

interest accruing pursuant to Section 3.1(e) shall be payable from time

to time on demand.  Interest shall also

be payable on all then outstanding Loans on the Termination Date and on all

Loans on the date of repayment (including prepayment) thereof (except that

voluntary prepayments of Revolving Loans that are Base Rate Loans made pursuant

to Section 4.2 on any day other than an Interest Payment Date or the

Termination Date need not be made with accrued interest from the most recent

Quarterly Payment Date, provided such accrued interest is paid on the next

Interest Payment Date) and on the date of maturity (by acceleration or

otherwise) of such Loans.  During the

existence of any Event of Default, interest on any Loan shall be payable on

demand.

(d)           Notification of Rate.  Agent, upon determining in accordance

herewith the interest rate for any Borrowing of Eurodollar Loans for any

Interest Period, shall promptly notify Borrower and the Lenders thereof.  Such determination shall, absent

demonstrable error and subject to Section 3.6, be final, conclusive and

binding upon all parties hereto.

(e)           Default Interest.  Notwithstanding the rates of interest specified herein, effective

on the date 30 days after the occurrence and continuance during such 30 day

period of any Event of Default (other than the failure to pay Obligations when

due) and for so long thereafter as any Event of Default shall be continuing,

and effective immediately upon any failure to pay any Obligations or any other

amounts due under any of the Loan Documents when due, whether by acceleration

or otherwise, the principal balance of each Loan then outstanding and, to the

extent permitted by applicable law, any interest payment on each Loan not paid

when due or other amounts then due and payable shall bear interest payable on

demand, after as well as before judgment at a rate per annum equal to the

Default Rate.

(f)            Maximum Interest.  If any interest payment or other charge or fee payable hereunder

exceeds the maximum amount then permitted by applicable law, Borrower shall be

obligated to pay the maximum amount then permitted by applicable law and

Borrower shall continue to pay the maximum amount from time to time permitted

by applicable law until all such interest payments and other charges and fees

otherwise due hereunder (in the absence of such restraint imposed by applicable

law) have been paid in full.

3.2           Fees.

(a)           Commitment Fee. 

On each Quarterly Payment Date, and on the Termination Date (or, if

earlier, on the date upon which the Revolving Commitments are terminated and

the Loans are paid in full and the LC Obligations are paid in full or cash

collateralized in a manner satisfactory to Agent), Borrower shall pay to Agent,

for the ratable benefit of the Lenders, a commitment fee equal to the

Applicable Commitment Fee which accrued during the quarterly period most

recently ended (or, in the case of the payment due on the Termination Date, the

portion thereof ending on such date). 

Such commitment fee shall be based upon the average unused Revolving

Commitments of the Lenders during the preceding quarter.

(b)           Agency Fees. 

Borrower shall pay to Agent for its own account, agency and other Loan

fees in the amount and at the times set forth in the letter agreement between

Borrower and Agent.

3.3           Computation

of Interest and Fees.  Interest

on all Loans and fees payable hereunder shall be computed on the basis of the

actual number of days elapsed over a year of 360 days; provided that

interest on all Base Rate Loans shall be computed on the basis of the actual

number of days elapsed over a year of 365 or 366 days, as the case may be.  Each determination of an interest rate by

Agent pursuant to any provision of this Agreement and in accordance therewith

shall be conclusive and binding on Borrower, Agent and the Lenders in the

absence of demonstrable error.  Agent

shall, at any time and from time to time upon request of Borrower, deliver to

Borrower a statement showing the quotations used by Agent in determining any

interest rate applicable to Loans pursuant to this Agreement.  Each change in the Applicable Margin, the

Applicable Commitment Fee or any change in the applicable LC Commission as a

result of a change in Borrower’s Most Recent Ratio of Total Debt to EBITDA

shall become effective on the Adjustment Date.

3.4           Interest

Periods.  At the time it gives

any Notice of Borrowing or a Notice of Conversion or Continuation with respect

to Eurodollar Loans, Borrower shall elect, by giving Agent written notice, the

interest period (each an “Interest Period”) which Interest Period shall,

at the option of Borrower, be one, two, three or six months, provided that:

(i)            all Eurodollar Loans comprising a

single Borrowing shall at all times have the same Interest Period;

(ii)           the initial Interest Period for any

Eurodollar Loan shall commence on the date of such Borrowing of such Eurodollar

Loan (including the date of any conversion thereto from a Loan of a different

Type) and each Interest Period occurring thereafter in respect of such

Eurodollar Loan shall commence on the last day of the immediately preceding

Interest Period;

(iii)          if any Interest Period relating to a

Eurodollar Loan begins on a day for which there is no numerically corresponding

day in the calendar month at the end of such Interest Period, such Interest

Period shall end on the last Business Day of such calendar month;

(iv)          if any Interest Period would otherwise

expire on a day which is not a Business Day, such Interest Period shall expire

on the next succeeding Business Day; provided, however, that if

any Interest Period for a Eurodollar Loan would otherwise expire on a day which

is not a Business Day but is a day of the month after which no further Business

Day occurs in such month, such Interest Period shall expire on the next

preceding Business Day;

(v)           no Interest Period may be selected at

any time when an Unmatured Event of Default or Event of Default is then in

existence; and

(vi)          no Interest Period shall extend beyond

the Termination Date.

3.5           Compensation for Funding Losses.

(a)           Borrower shall compensate each

Lender, upon its written request (which request shall set forth in reasonable

detail the basis for requesting such amounts), for all losses, expenses and

liabilities (including, without limitation, any interest paid by such Lender to

lenders of funds borrowed by it to make or carry its Eurodollar Loans to the

extent not recovered by the Lender in connection with the liquidation or

re-employment of such funds and including the compensation payable by such

Lender to a Participant but excluding loss of anticipated profit with respect

to any Loans) and any loss sustained by such Lender in connection with the liquidation

or re-employment of such funds (including, without limitation, a return on such

liquidation or re-employment that would result in such Lender receiving less

than it would have received had such Eurodollar Loan remained outstanding until

the last day of the Interest Period applicable to such Eurodollar Loans) which

such Lender may sustain as a result of (regardless of whether such events occur

as a result of an Event of Default or Unmatured Event of Default or the

exercise of any right or remedy of Agent or the Lenders under this Agreement or

any other agreement, or at law): (i) any failure by Borrower to continue or

borrow, or convert from or into, Eurodollar Loans on a date specified therefor

in a Notice of Borrowing or Notice of Conversion or Continuation delivered by

Borrower (whether or not withdrawn); (ii) any payment, prepayment or conversion

or continuation of any of its Eurodollar Loans occurring for any reason

whatsoever on a date which is not the last day of an Interest Period applicable

thereto; (iii) any repayment of any of its Eurodollar Loans not being made on

the date specified in a notice of payment given by Borrower; or (iv) (A) any

other failure by Borrower to repay its Eurodollar Loans when required by the

terms of this Agreement or (B) an election made by Borrower pursuant to Section

3.7.  Such a written request as to

additional amounts owed such Lender under this Section 3.5 and delivered

to Borrower and Agent by such Lender shall, absent demonstrable error, be

final, conclusive and binding for all purposes.

(b)           Calculation of all amounts payable to

a Lender under this Section 3.5 shall be made as though that Lender had

actually funded its relevant Eurodollar Loan through the purchase of a

Eurodollar deposit bearing interest at the Eurodollar Rate in an amount equal

to the amount of that Loan, having a maturity comparable to the relevant

Interest Period and through the transfer of such Eurodollar deposit from an

offshore office of that Lender to a domestic office of that Lender in the

United States of America; provided, however, that each Lender may

fund each of its Eurodollar Loans in any manner it sees fit and the foregoing

assumption shall be utilized only for the calculation of amounts payable under

this Section 3.5.

3.6           Increased Costs, Illegality, Etc.

(a)           Generally.  In

the event that:

(i)            on any Interest Rate Determination Date, by reason of any

changes arising after the date of this Agreement affecting the interbank

Eurodollar market, adequate and fair means do not exist for ascertaining the

applicable interest rate on the basis provided for in the definition of

Eurodollar Rate; or

(ii)           at

any time, any Lender shall incur increased costs or reduction in the amounts

received or receivable hereunder with respect to any Eurodollar Loan because of

(x) any change since the date of this Agreement in any applicable law or

governmental rule, regulation, order, guideline or request (whether or not

having the force of law) or in the interpretation or administration thereof and

including the introduction of any new law or governmental rule, regulation,

order, guideline or request, such as, for example, but not limited to: (A) a

change in the basis of taxation of payments to any Lender of the principal of

or interest on the Notes or any other amounts payable hereunder (except for (a)

changes in the rate of tax on, or determined by reference to, the net income or

profits of such Lender imposed by the jurisdiction in which its principal

office or applicable lending office is located and (b) United States

withholding taxes, which shall be governed by the provisions of Section 4.6)

or (B) a change in official reserve requirements (but, in all events, excluding

reserves required under Regulation D to the extent included in the computation

of the Eurodollar Rate) and/or (y) other circumstances since the date of this

Agreement affecting such Lender or the interbank Eurodollar market or the

position of such Lender in such market (excluding, however, differences in a

Lender’s cost of funds from those of Agent which are solely the result of

credit differences between such Lender and Agent); or

(iii)          at

any time, the making or continuance of any Eurodollar Loan has been made (x)

unlawful by any law or governmental rule, regulation or order, (y) impossible

by compliance by any Lender in good faith with any governmental request

(whether or not having force of law) or (z) impracticable as a result of a

contingency occurring after the date of this Agreement which materially and

adversely affects the interbank Eurodollar market;

then, and in any such

event, such Lender (or Agent, in the case of clause (i) above) shall promptly

give notice (by telephone confirmed in writing), which notice shall, absent

demonstrable error, be final and conclusive and binding upon all parties

hereto, to Borrower and, except in the case of clause (i) above, to Agent of

such determination (which notice Agent shall promptly transmit to each of the

other Lenders).  Thereafter (x) in the

case of clause (i) above, Eurodollar Loans shall no longer be available until

such time as Agent notifies Borrower and the Lenders that the circumstances

giving rise to such notice by Agent no longer exist, and any Notice of

Borrowing or Notice of Conversion or Continuation given by Borrower with respect

to Eurodollar Loans (other than with respect to conversions to Base Rate Loans)

which have not yet been incurred (including by way of conversion) shall be

deemed rescinded by Borrower, (y) in the case of clause (ii) above, Borrower

shall pay to such Lender, upon written demand therefor, such additional amounts

(in the form of an increased rate of, or a different method of calculating,

interest or otherwise as such Lender shall reasonably determine) as shall be

required to compensate such Lender for such increased costs or reductions in

amounts received or receivable hereunder (a written notice as to the additional

amounts owed to such Lender, showing the basis for the calculation thereof,

submitted to Borrower by such Lender shall, absent demonstrable error, be final

and conclusive and binding on all the parties hereto; however the failure to

give any such notice shall not release or diminish Borrower’s obligations to

pay additional amounts pursuant to this Section 3.6 (a)(y) provided that

Borrower shall not be required to compensate such Lender pursuant to this

section for any increased costs or reductions incurred more than 180 days prior

to the date that such Lender notifies Borrower of the increased costs or

reductions and of such Lender’s intention to claim compensation therefor; provided

further that, if the change in law giving rise to such increased costs or

reductions is retroactive, then the 180-day period referred to above shall be

extended to include the period of retroactive effect thereof and (z) in the

case of clause (iii) above, Borrower shall take one of the actions specified in

Section 3.6(b) as promptly as possible and, in any event, within the

time period required by law.  In

determining such additional amounts pursuant to clause (y) of the immediately

preceding sentence, each Lender shall act reasonably and in good faith and

will, to the extent the increased costs or reductions in amounts receivable

relate to such Lender’s loans in general and are not specifically attributable

to a Loan hereunder, use averaging and attribution methods which are reasonable

and which cover all loans similar to the Loans made by such Lender whether or

not the loan documentation for such other loans permits the Lender to receive

increased costs of the type described in this Section 3.6(a).

(b)           Eurodollar Loans.  At any time that any Eurodollar Loan is affected by the

circumstances described in Section 3.6(a)(ii) or (iii), Borrower

may (and, in the case of a Eurodollar Loan affected by the circumstances

described in Section 3.6(a)(iii), shall) either (i) if the affected

Eurodollar Loan is then being made initially or pursuant to a conversion,

cancel the respective Borrowing by giving Agent telephonic notice (confirmed in

writing) on the same date that Borrower was notified by the affected Lender or

Agent pursuant to Section 3.6(a)(ii) or (iii), or (ii) if the

affected Eurodollar Loan is then outstanding, upon at least three Business

Days’ written notice to Agent, require the affected Lender to convert such

Eurodollar Loan into a Base Rate Loan, provided, that if more than one

Lender is affected at any time, then all affected Lenders must be treated the

same pursuant to this Section 3.6(b).

(c)           Capital Requirements.  If any Lender determines that the

introduction of or any change in any applicable law or governmental rule,

regulation, order, guideline or request (whether or not having the force of

law) concerning capital adequacy, or any change in (after the date of this

Agreement) interpretation or administration thereof by any Governmental

Authority, central bank or comparable agency, will have the effect of

increasing the amount of capital required or expected to be maintained by such

Lender or any corporation controlling such Lender based on the existence of

such Lender’s Revolving Commitment or Converted Term Loan Amount hereunder or

its obligations hereunder, then Borrower shall pay to such Lender, upon its

written demand therefor, such additional amounts as shall be required to

compensate such Lender or such other corporation for the increased cost to such

Lender or such other corporation or the reduction in the rate of return to such

Lender or such other corporation as a result of such increase of capital.  In determining such additional amounts, each

Lender will act reasonably and in good faith and will use averaging and

attribution methods which are reasonable and which will, to the extent the

increased costs or reduction in the rate of return relates to such Lender’s

commitments or obligations in general and are not specifically attributable to

the Revolving Commitments, Term Loans and obligations hereunder, cover all

commitments and obligations similar to the Revolving Commitment or Converted

Term Loan Amount and obligations of such Lender hereunder whether or not the

loan documentation for such other commitments or obligations permits the Lender

to make the determination specified in this Section 3.6(c), and such

Lender’s determination of compensation owing under this Section 3.6(c)

shall, absent demonstrable error, be final and conclusive and binding on all

the parties hereto.  Each Lender, upon

determining that any additional amounts will be payable pursuant to this Section 3.6(c),

will give prompt written notice thereof to Borrower, which notice shall show in

reasonable detail the basis for calculation of such additional amounts,

although the failure to give any such notice shall not release or diminish any

of Borrower’s obligations to pay additional amounts pursuant to this Section

3.6(c) provided that Borrower shall not be required to compensate such

Lender pursuant to this Section 3.6(c) for any increased costs or

reductions incurred more than 180 days prior to the date that such Lender

notifies Borrower of the increased costs or reductions and of such Lender’s

intention to claim compensation therefor; provided further that, if the

change in law giving rise to such increased costs or reductions is retroactive,

then the 180-day period referred to above shall be extended to include the

period of retroactive effect thereof.

(d)           Change of Lending Office.  Each Lender which is or will be owed

compensation pursuant to Section 3.6(a) or (c) will, if requested

by Borrower, use reasonable efforts (subject to overall policy considerations

of such Lender) to cause a different branch or Affiliate to make or continue a

Loan or Letter of Credit if such designation will avoid the need for, or

materially reduce the amount of, such compensation to such Lender and will not,

in the judgment of such Lender, be otherwise disadvantageous to such

Lender.  Borrower hereby agrees to pay

all reasonable expenses incurred by any Lender in utilizing a different branch

or Affiliate pursuant to this Section 3.6(d).  Nothing in this Section 3.6(d) shall

affect or postpone any of the obligations of Borrower or the right of any

Lender provided for herein.

3.7           Replacement of Affected Lenders.  (x) If any Lender becomes a Defaulting

Lender or otherwise defaults in its Obligations to make Revolving Loans or fund

Unpaid Drawings, (y) if any Lender is owed increased costs under Section

3.6(a)(ii) or (iii), Section 3.6(c) or Borrower is required

to make any payments under Section 4.6 to any Lender materially in

excess of those to the other Lenders or (z) as provided in Section 11.1(b)

in the case of certain refusals by a Lender to consent to certain proposed

amendments, changes, supplements, waivers, discharges or terminations with

respect to this Agreement which have been approved by the Majority Lenders,

Borrower shall have the right, if no Event of Default or Unmatured Event of

Default then exists, to replace such Lender (the “Replaced Lender”) with

one or more other Eligible Assignee or Eligible Assignees, none of whom shall

be a Defaulting Lender at the time of such replacement (collectively, the “Replacement

Lender”) acceptable to Agent, provided that (i) at the time of any

replacement pursuant to this Section 3.7, the Replacement Lender shall

enter into one or more assignment agreements, in the form of Exhibit 11.9

hereto, pursuant to which the Replacement Lender shall acquire all of the

Commitments and outstanding Loans of the Replaced Lender and (ii) all

obligations of Borrower owing to the Replaced Lender (including, without

limitation, any such increased costs and excluding those specifically described

in clause (i) above in respect of which the assignment purchase price has been,

or is concurrently being paid) shall be paid in full to such Replaced Lender

concurrently with such replacement. 

Upon the execution of the respective assignment documentation, the

payment of amounts referred to in clauses (i) and (ii) above and, if so

requested by the Replacement Lender, delivery to the Replacement Lender of the

appropriate Note or Notes executed by Borrower, the Replacement Lender shall

become a Lender hereunder and the Replaced Lender shall cease to constitute a

Lender hereunder, except with respect to indemnification provisions under this

Agreement, which shall survive as to such Replaced Lender.  Notwithstanding anything to the contrary

contained above, no Lender that acts as a Facing Agent may be replaced

hereunder at any time which it has Letters of Credit outstanding hereunder

unless arrangements satisfactory to such Facing Agent (including the furnishing

of a standby letter of credit in form and substance, and issued by an issuer

satisfactory to such Facing Agent or the depositing of cash collateral into the

Collateral Account in amounts and pursuant to arrangements satisfactory to such

Facing Agent) have been made with respect to such outstanding Letters of

Credit.

ARTICLE

IV

REDUCTION OF COMMITMENTS; PAYMENTS AND PREPAYMENTS

4.1           Voluntary Reduction of Commitments.  (a)  Upon at least three Business Days’ prior

written notice (or telephonic notice confirmed in writing) to Agent at the

Notice Office (which notice Agent shall promptly transmit to each Lender),

Borrower shall have the right, from time to time and without premium or

penalty, to terminate the unutilized portion of the Revolving Commitments or

the Swing Line Commitment, as the case may be, in part or in whole; provided

that (x) any such voluntary termination of the Revolving Commitments shall

apply to proportionately and permanently reduce the Revolving Commitment of

each Revolving Lender, (y) any partial voluntary reduction pursuant to this Section

4.1 shall be in the amount of at least $5,000,000 and integral multiples of

$5,000,000 in excess of that amount and (z) no such voluntary termination of

the Revolving Commitments shall be permitted if the effect thereof would be to

reduce the total of the Revolving Commitments below the aggregate principal

amount of outstanding Revolving Loans plus the aggregate LC Obligations and the

Swing Line Loan Commitment.  The parties

hereto acknowledge that the Borrower has on the Restatement Date and prior to

the Term Loan Conversion permanently reduced the Revolving Commitments by the

amount of the Revolver Commitment Reduction .

(b)           In

the event of certain refusals by a Lender to consent to certain proposed

amendments, changes, supplements, waivers, discharges or terminations with

respect to this Agreement which have been approved by the Majority Lenders as

provided in Section 11.1(b), Borrower shall have the right, upon five

(5) Business Days’ prior written notice to Agent (which notice Agent shall promptly

transmit to each of the Lenders), to terminate the entire Revolving Commitment

of such Lender, so long as all Loans, together with accrued and unpaid

interest, fees and all other amounts, due and owing to such Lender are repaid

concurrently with the effectiveness of such termination at which time Schedule

1.1(b) shall be deemed modified to reflect such changed amounts pursuant to

Section 4.1(a) and Borrower cash collateralizes such Lender’s Commitment

Percentage of the LC Obligations.  At

such time, such Lender shall no longer constitute a “Lender” for purposes of

this Agreement, except with respect to indemnifications under this Agreement

which shall survive as to such repaid Lender.

4.2           Voluntary

Prepayments.  (a)  Borrower shall

have the right to prepay any or all of the Loans in whole or in part from time

to time on the following terms and conditions: (i) Borrower shall give Agent

irrevocable written notice at its Notice Office (or telephonic notice promptly

confirmed in writing) of its intent to prepay, the amount of such prepayment

and the specific Borrowings to which such prepayment is to be applied, which

notice shall be given by Borrower to Agent by 12:00 noon (New York City time)

at least three Business Days prior to the date of such prepayment and

which notice shall (except in the case of Swing Line Loans) promptly be

transmitted by Agent to each of the applicable Lenders; (ii) each partial

prepayment of any Borrowing (other than a Borrowing of Swing Line Loans) shall

be in an aggregate principal amount of at least $1,000,000 and each partial

prepayment of a Swing Line Loan shall be in an aggregate principal amount of at

least $500,000; provided that no partial prepayment of Eurodollar Loans made

pursuant to a single Borrowing shall reduce the aggregate principal amount of

the outstanding Loans made pursuant to such Borrowing to an amount less than

the Minimum Borrowing Amount applicable thereto; (iii) Eurodollar Loans may

only be prepaid pursuant to this Section 4.2 on the last day of an

Interest Period applicable thereto or on any other day subject to Section

3.5; (iv) each prepayment in respect of any Borrowing shall be applied pro

rata among the Loans comprising such Borrowing provided, that such

prepayment shall not be applied to any Loans of a Defaulting Lender at any time

when the aggregate amount of Loans of any Non-Defaulting Lender exceeds such

Non-Defaulting Lender’s Commitment Percentage of all Loans then outstanding.  The notice provisions, the

provisions with respect to the minimum amount of any prepayment, and the

provisions requiring prepayments in integral multiples above such minimum

amount of this Section 4.2 are for the benefit of Agent and may be

waived unilaterally by Agent.

(b)           In

the event of certain refusals by a Lender to consent to certain proposed

amendments, changes, supplements, waivers, discharges or terminations with

respect to this Agreement which have been approved by the Majority Lenders as

provided in Section 11.1(b), Borrower shall have the right, upon five

(5) Business Days’ prior written notice to Agent (which notice Agent shall

promptly transmit to each of the Lenders), to repay all Loans, together with

accrued and unpaid interest, fees  and

all other amounts due and owing to such Lender in accordance with said Section

11.1(b), so long as (A) in the case of the repayment of Revolving Loans of

any Revolving Lender pursuant to this clause (b), the Revolving Commitment of

such Revolving Lender is terminated concurrently with such repayment pursuant

to Section 4.1(b) and (B) in the case of the repayment of Loans of any

Lender, the consents required by Section 11.1(b) in connection with the

repayment pursuant to this clause (b) shall have been obtained.

4.3           Mandatory Prepayments.

(a)           Prepayment Upon Overadvance.  Borrower shall prepay the outstanding

principal amount of the Revolving Loans or the Swing Line Loan on any date on

which the aggregate outstanding principal amount of such Loanstogether

with the aggregate LC Obligations (after giving effect to any other repayments

or prepayments on such day) exceeds the aggregate Revolving Commitments or the

Swing Line Loan Commitment, as the case may be, in the amount of such

excess.  If, after giving effect to the

prepayment of all outstanding Revolving Loans, the aggregate LC Obligations

exceeds the Revolving Commitments then in effect, Borrower shall cash

collateralize LC Obligations by depositing, pursuant to a cash collateral

agreement to be entered into in form and substance reasonably satisfactory to

Agent and Borrower, cash with Agent in an amount equal to the difference

between such LC Obligations and the Revolving Loan Commitments then in

effect.  Agent shall establish in its

name for the benefit of the Revolving Lenders a cash collateral account (the “Collateral

Account”) into which it shall deposit such cash to hold as collateral

security for the LC Obligations.

(b)           Payment at Termination Date.   Borrower hereby unconditionally promises to

pay to each Lender on the Termination Date, the unpaid principal amount of each

Loan (including, without limitation, each Swing Line Loan) made by such

Lender.  Borrower hereby further agrees

to pay interest in immediately available funds at the office of Agent on the

unpaid principal amount of such Loans from time to time from the date hereof

until payment in full thereof at the rates per annum, and on the dates, set

forth in Section 2.6.

(c)           Mandatory Prepayment Upon Asset

Disposition.  If Borrower or any

of its Subsidiaries receives Net Sale Proceeds from an Asset Disposition, to

the extent that such Net Sale Proceeds exceed $10,000,000 such excess shall be

applied as a mandatory prepayment of Loans in the manner set forth in Section

4.4.  Notwithstanding the foregoing,

Borrower or any Subsidiary may reinvest up to $10,000,000 of the Net Sale

Proceeds of such Asset Disposition (the “Reinvestable Proceeds”) within two

hundred seventy (270) days in productive replacement assets of a kind then used

or useable in the business of Borrower or its Subsidiaries and if so reinvested

within such period, such proceeds shall not be subject to prepayment.  If, however, Borrower does not intend to so

reinvest such Reinvestable Proceeds or if the period set forth in the

immediately preceding sentence expires without Borrower having reinvested such

Reinvestable Proceeds such Reinvestable Proceeds shall be applied as a

mandatory prepayment of Loans in the manner set forth in Section 4.4.

(d)           Mandatory Prepayment Upon

Incurrence of Indebtedness.  On

the date of receipt by Borrower and/or any of their Subsidiaries of Net

Offering Proceeds from the incurrence of Indebtedness, an amount equal to

100% of such Net Offering Proceeds shall be applied as a mandatory prepayment

of Loans in the manner set forth in Section 4.4.

(e)           Scheduled Term Repayments.  Borrower agrees to pay Scheduled Term

Repayments on the Term Loans until the Term Loans are paid in full in the

amounts and at the times specified in the definition of Scheduled Term

Repayments to the extent that prepayments have not previously been applied to

such Scheduled Term Repayments (and such Scheduled Term Repayments have not

otherwise been reduced) pursuant to the terms hereof.

(f)            Mandatory Prepayment With Excess

Cash Flow.  On each Excess Cash

Payment Date, an amount equal to 75% of Excess Cash Flow, if positive, of

Borrower and its Subsidiaries for the most recent Excess Cash Flow Period

ending prior to such Excess Cash Payment Date shall be applied as a mandatory

repayment of principal of the Loans as provided in Section 4.4.

4.4           Application

of Prepayments. Except as expressly provided in this Agreement, all

prepayments of principal made by Borrower pursuant to Section 4.3(c),(d) and

(f) shall be applied (i) first to the payment of the unpaid principal

amount of the Term Loans, after all Term Loans have been paid in full, second

to the payment of the then outstanding balance of the Revolving Loans and

third, after all Revolving Loans have been paid in full, to the cash

collateralization of LC Obligations; (ii) within each of the foregoing Loans, first

to the payment of Base Rate Loans and second to the payment  of Eurodollar Loans; and (iii) with respect

to Eurodollar Loans, in such order as Borrower shall request (and in the

absence of such request, as Agent shall determine so as to minimize breakage

costs).   If any prepayment of

Eurodollar Loans made pursuant to a single Borrowing shall reduce the

outstanding Loans made pursuant to such Borrowing to an amount less than the

Minimum Borrowing Amount, such Borrowing shall immediately be converted into

Base Rate Loans.   All prepayments shall

include payment of accrued interest on the principal amount so prepaid, shall

be applied to the payment of interest before application to principal and shall

include amounts payable, if any, under Section 3.5.

4.5           Method

and Place of Payment.

(a)           Except

as otherwise specifically provided herein, all payments under this Agreement

shall be made to Agent, for the ratable account of the Lenders entitled

thereto, not later than 12:00 Noon (New York City time) on the date when due

and shall be made in immediately available funds in lawful money of the United

States of America and in each case to the account specified therefor for Agent

or if no account has been so specified at the Payment Office, it being

understood that with respect to payments in Dollars, written telex or telecopy

notice by Borrower to Agent to make a payment from the funds in Borrower’s

account at the Payment Office shall constitute the making of such payment to

the extent of such funds held in such account. 

Agent will thereafter cause to be distributed on the same day (if

payment was actually received by Agent prior to 12:00 Noon (New York City time)

on such day) like funds relating to the payment of principal or interest or

fees ratably to the Lenders entitled to receive any such payment in accordance

with the terms of this Agreement.  If

and to the extent that any such distribution shall not be so made by Agent in

full on the same day (if payment was actually received by Agent prior to 12:00

Noon (New York City time) on such day), Agent shall pay to each Lender its

ratable amount thereof and each such Lender shall be entitled to receive from

Agent interest on such amount at the overnight Federal Funds Rate for each day

from the date such amount is paid to Agent until the date Agent pays such

amount to such Lender.

(b)           Any

payments under this Agreement which are made by Borrower later than 12:00 Noon

(New York City time) shall, for the purpose of calculation of interest, be

deemed to have been made on the next succeeding Business Day.  Whenever any payment to be made hereunder

shall be stated to be due on a day which is not a Business Day, the due date

thereof shall be extended to the next succeeding Business Day and, with respect

to payments of principal, interest shall be payable during such extension at

the applicable rate in effect immediately prior to such extension, except that

with respect to Eurodollar Loans, if such next succeeding Business Day is not

in the same month as the date on which such payment would otherwise be due

hereunder or under any Note, the due date with respect thereto shall be the

next preceding applicable Business Day.

4.6           Net

Payments.

(a)           All payments made by Borrower

hereunder or under any Loan Document will be made without setoff, counterclaim

or other defense.  Except as provided in

Section 4.7(d), all payments hereunder and under any of the Loan

Documents (including, without limitation, payments on account of principal and

interest and fees) shall be made by Borrower free and clear of and without

deduction or withholding for or on account of any present or future tax, duty,

levy, impost, assessment or other charge of whatever nature now or hereafter

imposed by any Governmental Authority, but excluding therefrom (i) a tax imposed

on or measured by the net income, net profits, net receipts or capital

(including a branch profits tax or a franchise tax based on net income, net

profits, net receipts or capital) of the Lender by the jurisdiction (or

political subdivision or taxing authority thereof) in which the Lender is

incorporated or organized, or in which it is a citizen, resident or domiciliary

or the jurisdiction (or political subdivision or taxing authority thereof) in

which any lending office that participated in the making of a loan hereunder is

located, (ii) in the case of any Lender organized under the laws of any

jurisdiction other than the United States or any state thereof (including the

District of Columbia), any taxes imposed by the United States by means of withholding

at the source unless, and to the extent that, such withholding results from a

change in applicable law, treaty or regulations or the interpretation or

administration thereof (including, without limitation, any guideline or policy

not having the force of law) by any authority charged with the administration

thereof subsequent to the date such Lender becomes a Lender with respect to the

Loan or portion thereof affected by such change and (iii) any tax imposed on or

measured by the net income, net profits, net receipts or capital (including a

branch profits tax, or a franchise tax based on net income, net profits, net

receipts or capital) of a Lender or an office or branch thereof by the United

States of America or any political subdivision or taxing authority thereof or

therein (such tax or taxes, other than a tax or taxes excluded under (i), (ii),

or (iii), being herein referred to as “Tax” or “Taxes” and tax or

taxes excluded under (i), (ii) or (iii) shall be referred to as “Excluded

Taxes”).  If Borrower is required by

law to make any deduction or withholding of any Taxes from any payment due

hereunder or under any of the Loan Documents, then the amount payable will be

increased to such amount which, after deduction from such increased amount of

all such Taxes required to be withheld or deducted therefrom, will not be less

than the amount due and payable hereunder had no such deduction or withholding

been required.  A certificate as to any

additional amounts payable to a Lender under this Section 4.6 submitted

to Borrower by such Lender

shall show in reasonable detail the amount payable and the calculations used to

determine in good faith such amount and shall, absent manifest error, be final,

conclusive and binding upon all parties hereto.

(b)           If Borrower makes any payment

hereunder or under any of the Loan Documents in respect of which it is required

by law to make any deduction or withholding of any Taxes, it shall pay the full

amount to be deducted or withheld to the relevant taxation or other authority

within the time allowed for such payment under applicable law and shall deliver

to all affected Lenders within 30 days after it has made such payment to the

applicable authority any receipt issued by such authority to the Borrower

evidencing the payment to such authority of all amounts so required to be

deducted or withheld from such payment.

(c)           Without prejudice to the other

provisions of Section 4.6, if any Lender, or Agent on its behalf, is

required by law to make any payment on account of Taxes on or in relation to

any amount received or receivable hereunder or under any of the Loan Documents

by such Lender, or Agent on its behalf, or any liability for Tax in respect of

any such payment is imposed, levied or assessed against any Lender or Agent on its

behalf, Borrower will promptly, following receipt of the certificate described

in the immediately following sentence, indemnify such person against such Tax

payment or liability, together with any interest, penalties and expenses

(including reasonable counsel fees and expenses) payable or incurred in

connection therewith, including any tax of any Lender arising by virtue of

payments under this Section 4.6(c), computed in a manner consistent with

this Section 4.6(c).  A

certificate prepared in good faith as to the amount of such payment (showing in

reasonable detail the amount payable and the calculations used to determine

such amount) by such Lender, or Agent on its behalf, absent manifest error,

shall be final, conclusive and binding upon all parties hereto for all

purposes.

(d)           Each Lender that is not a United

States person (as such term is defined in Section 7701(a)(30) of the Code)

agrees to deliver to Borrower and Agent on or prior to the Restatement Date, or

in the case of a Lender that is an Assignee of an interest under this Agreement

pursuant to Section 3.7 or 11.9 (unless the respective Lender was

already a Lender hereunder immediately prior to such assignment), on the date

of such assignment to such Lender, (i) two accurate and complete original signed

copies of IRS Form W-8BEN, W-8ECI, or W-8IMY (or successor or other applicable

forms prescribed by the IRS) certifying to such Lender’s entitlement to a

complete exemption from or reduced rate of United States withholding tax on

interest payments to be made under this Agreement and under any Note, or (ii)

if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the

Code and cannot deliver the applicable form pursuant to clause (i) above, (x) a

certificate substantially in the form of Exhibit 4.6(d) (any such

certificate, a “Section 4.6(d)(ii) Certificate”) and (y) two accurate

and complete original signed copies of IRS Form W-8BEN (or successor form),

certifying to such Lender’s entitlement to a complete exemption from United

States withholding tax on payments of interest to be made under this Agreement

and under any Note; provided, however, that no Lender shall be

required to deliver an IRS Form W-8BEN, W-8ECI, W-8IMY, or Section

4.6(d)(ii) Certificate under this Section 4.6(d) to the extent that

the delivery of such form is not

authorized by law; provided further, however,

that in the event that a Lender provides the Borrower or the Agent with an IRS

Form W-8IMY (or substitute form) indicating that it is a “flow through” entity,

as defined in Treasury Regulations promulgated under Section 1441 of the Code,

or otherwise, not a beneficial owner of interest payments under this Agreement

and under any Note, such Lender agrees, on or prior to the Restatement Date, or

the date of assignment to such Lender, as applicable, to take any actions

necessary, and to deliver to Borrower and Agent all forms necessary, to

establish such Lender’s entitlement to a complete exemption from, or a

reduction in, United States withholding tax on payments of interest to be made

under this Agreement and under any Note, including causing its partners,

members, beneficiaries, beneficial owners, and their beneficial owners, if any,

to take any actions and deliver any forms necessary to establish such

exemption.  Notwithstanding the

foregoing, (i) a fiscally transparent entity may provide an IRS Form W-8BEN to

claim a treaty exemption or

rate reduction to the extent that such entity is receiving interest and is not

treated as fiscally transparent by its own jurisdiction,  provided the satisfaction of such conditions

entitles the Lender to an exemption or reduction from withholding at the time

such Lender becomes a party to this Agreement and (ii) a withholding foreign

partnership, withholding foreign trust, and qualified intermediary shall only

provide such information as is required by Treasury Regulations promulgated

under Code Section 1441.  For purposes

of this Agreement, the term “Forms” shall include any attachments for to IRS

Forms W-8 IMY required to be filed by the Lender.  In addition, each Lender agrees that from time to time after the

Initial Borrowing Date, when a lapse in time or change in circumstances renders

the previous certification obsolete or inaccurate in any material respect, such

Lender will deliver to Borrower and Agent two new accurate and complete

original signed copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY and a Section

4.6(d)(ii) Certificate, as the case may be, and such other forms as may be

required in order to confirm or establish the entitlement of such Lender (or

its partners, members, beneficiaries, or beneficial owners) to a continued

exemption from or reduction in United States withholding Tax on interest

payments under this Agreement and any Note, or it shall immediately notify Borrower

and Agent of its inability to deliver any such form or certificate; provided,

however, that no Lender shall be required to deliver an IRS Form W8-BEN,

W-8ECI, or W-8IMY under this Section 4.6(d) to the extent that the

delivery of such form is not authorized by law; provided, further,

however, that any Lender which does not deliver the applicable form

pursuant to Section 4.6(d) shall be entitled to additional payment

pursuant to Section 4.6(a) or indemnification under Section 4.6(c)

only if and to the extent (i) such failure results solely from a change in law

or (ii) the Tax to which such additional payment or indemnification relates

would have been imposed regardless of whether such Lender provided such

forms.   Notwithstanding anything to the

contrary contained in Section 4.6, any Lender that has not provided to

Borrower the IRS Forms required to be provided to Borrower pursuant to this Section

4.6(d) shall not be entitled to any payment of additional amounts pursuant

to Section 4.6(a) or indemnification under Section 4.6(c) with

respect to any deduction or withholding which would not have been required if

such Lender had provided such forms.

(e)           Each Lender that is incorporated or

organized under the laws of the United States of America or a state thereof

shall provide two properly completed and duly executed copies of IRS Form W-9,

or any successor or other applicable form. 

Each Lender shall deliver to

Borrower and Agent (provided that such Lender remains

lawfully able to do so), two further duly executed forms and statements,

properly completed in all material respects, at or before the time any such

form or statement expires or becomes obsolete, or otherwise as reasonably

requested by Borrower.  Each Lender shall

promptly notify Borrower at any time it determines that it is no longer in a

position to provide any previously delivered certificate to Borrower (or any

other form or certification adopted by U.S. taxing authorities for such

purpose).

(f)            Each Lender agrees that, as promptly

as practicable after it becomes aware of the occurrence of any event or the

existence of any condition that would cause Borrower to make a payment in

respect of any Taxes to such Lender pursuant to Section 4.6(a) or a

payment in indemnification for any Taxes pursuant to Section 4.6(c), it

will use reasonable efforts to

make, fund or maintain the Loan (or portion thereof) of

such Lender with respect to which the aforementioned payment is or would be

made through another lending office of such Lender or take any other action

reasonably requested by Borrower if as a result thereof the additional amounts

which would otherwise be required to be paid by such Borrower in respect of

such Loans (or portions thereof) or participation in Letters of Creditpursuant

to Section 4.6(a) or Section 4.6(c) would be materially reduced,

and if, as determined by such Lender, in its reasonable discretion, the making,

funding or maintaining of such Loans or participation in Letters of Credit (or

portions thereof) through such other lending office or taking of such other

action would not otherwise materially adversely affect such Loans or such

Lender.  Borrower agrees to pay all

reasonable expenses incurred by any Lender in utilizing another lending office of

such Lender or taking of such other action pursuant to this Section 4.6(f).

ARTICLE

V

REPRESENTATIONS AND WARRANTIES

To induce Agent

and each Lender to enter into this Agreement and the Second Amendment and

Restatement Agreement and to make the Loans and issue (or participate in) the

Letters of Credit, Borrower hereby represents and warrants to Agent and each

Lender, and hereby agrees, as follows:

5.1           Corporate Existence; Compliance

with Law.  Each of Borrower and

its Subsidiaries (a) is duly organized, validly existing and in good standing

under the laws of the jurisdiction of its organization, (b) has the corporate

power and authority, and the legal right, to own and operate its property, to

lease the property it operates as lessee and to conduct the business in which

it is currently engaged, (c) is duly qualified and in good standing as a

foreign corporation, and is duly authorized to do business, in each

jurisdiction where its ownership or leasing of property or the character of its

operations makes such qualification necessary, except where the failure to so

qualify would not reasonably be expected to have a Material Adverse Effect and

(d) is in compliance with all Requirements of Law except to the extent that all

failures to comply therewith would not reasonably be expected to have a Material

Adverse Effect.

5.2           Corporate Power; Authorization;

No Violation.  The execution,

delivery and performance by each Credit Party of this Agreement and the other

Loan Documents to which it is a party (i) are within such Credit Party’s

corporate power, (ii) have been duly authorized by all necessary corporate,

shareholder and other action on the part of each Person whose authorization is

required, (iii) do not violate any Requirement of Law or any material

Contractual Obligation applicable to such Credit Party, (iv) will not result in

or require the creation or imposition of any Lien of any nature upon or with

respect to any of the properties now owned or hereafter acquired by such Person

(other than any permitted by the Loan Documents) and (v) will not require any

authorization or approval or other action by, or notice to or filing or

registration with, any Governmental Authority (other than those which have been

obtained and are in force and effect).

5.3           Binding

Effect.  This Agreement has

been, and the other Loan Documents to which any Credit Party is a party will be

when executed and delivered, duly executed and delivered on behalf of Borrower

and the other Loan Parties thereto. 

This Agreement constitutes, and the other Loan Documents to which any

Credit Party is a party when executed and delivered will constitute, a legal,

valid and binding obligation of the Loan Parties that are party thereto,

enforceable against such Loan Parties in accordance with their respective

terms, except as enforcement thereof may be subject to (i) the effect of any

applicable bankruptcy, insolvency, reorganization, moratorium or similar laws

affecting creditors’ rights generally and (ii) general principles of equity

(regardless of whether such enforcement is sought in a proceeding in equity or

at law).  The security interests created

in favor of Agent, as Pledgee for the benefit of the Lenders under the Pledge

Agreement constitute first perfected security interests in the Pledged Stock,

subject to no security interests of any other Person.  No filings or recordings are required in order to perfect the

security interests created in the Pledged Stock under the Pledge Agreement.

5.4           Purpose of

Loans.  The proceeds of the

Loans shall be used by Borrower to (i) repay existing indebtedness under the

Existing Credit Agreements and (ii) for general corporate and working capital

purposes (including without limitation the Asset Acquisition and other

Acquisitions).  No proceeds of any of

the Loans will be used for “buying,” “purchasing,” or “carrying,” any “margin

stock” within the respective meanings of each of the quoted terms under

Regulation U of the Board as now and from time to time hereafter in effect or

for any purpose which would cause any of the loans or extensions of credit

under this Agreement to be considered a “purpose credit” within the meaning of

Regulation T, U or X of the Board.

5.5           Subsidiaries.  Schedule 5.5 annexed hereto and made

a part hereof is a complete and correct list of all Subsidiaries of Borrower as

of the Restatement Date and separately identifies all Material Subsidiaries of

Borrower as of the Restatement Date. 

All of such Subsidiaries are Wholly–Owned Subsidiaries of Borrower

except as otherwise indicated on such Schedule 5.5.  There does not exist any encumbrance or

restriction on the ability of (i) any Subsidiary of Borrower to pay dividends

or make any other distributions on its capital stock or any other interest or

participation in its profits owned by Borrower or any Subsidiary of Borrower,

or to pay any Indebtedness owed to Borrower or a Subsidiary of Borrower, (ii)

any Subsidiary of Borrower to make loans or advances to Borrower or any of

Borrower’s Subsidiaries or (iii) Borrower or any of its Subsidiaries to

transfer any of its properties or assets to Borrower or any of its

Subsidiaries, except for such encumbrances or restrictions existing under or by

reason of (x) applicable law, (y) this Agreement or the other Loan Documents or

(z) customary provisions restricting subletting or assignment of any lease or

other contract governing a leasehold interest or other contract rights of

Borrower or a Subsidiary of Borrower.

5.6           Indebtedness.  Schedule 5.6 annexed hereto and made

a part hereof is a complete and correct list of all Indebtedness of Borrower

and its Subsidiaries which, in any individual instance exceeds $250,000 in

principal amount and which is outstanding as of the Restatement Date (other

than Intercompany Indebtedness).

5.7           Financial Statements;

Financial Condition; Undisclosed Liabilities; Projections, etc.

(a)           Financial Statements.  The balance sheet of Borrower at December

31, 1998, December 31, 1999, and December 31, 2000, and the related statements

of operations, cash flows and shareholders’ equity of Borrower for the Fiscal

Year or other period ended on such dates, as the case may be, copies of which

have been furnished to the Lenders prior to the date hereof which have been

examined by Ernst & Young L.L.P., independent certified public accountants,

were prepared in accordance with GAAP in effect on the date such statements

were prepared and fairly present the consolidated financial condition and

results of operations of the Borrower and its Subsidiaries at such dates and

for the periods then ended.  Since

December 31, 2000, there has been no Material Adverse Effect.

(b)           Solvency.  On

and as of the Restatement Date, after giving effect to the Transaction and to

all Indebtedness (including the Loans) being incurred, and to be incurred (and

the use or proceeds thereof), and Liens created, and to be created, by Borrower

in connection with the transactions contemplated hereby, (i) the sum of the

assets, at a fair valuation, of Borrower will exceed its Debts; (ii) Borrower

has not incurred nor intends to, nor believes that it will, incur Debts beyond its

ability to pay such Debts as such Debts mature; and (iii) Borrower will have

sufficient capital with which to conduct its business.

(c)           No Undisclosed Liabilities.  Except as fully reflected in the financial

statements and the notes thereto referred to in Section 5.7(a) or on Schedule

5.7(c), there are (after giving effect to the Transaction and the other

transactions contemplated hereby) no liabilities or obligations with respect to

Borrower of any nature whatsoever (whether absolute, accrued, contingent or

otherwise and whether or not due) which, either individually or in aggregate,

would be material to Borrower.  As of

the Restatement Date (and after giving effect to the Transaction and the other

transaction contemplated hereby), Borrower does not know of any basis for the

assertion against Borrower of any liability or obligation of any nature

whatsoever that is not reflected in such financial statements or the notes

related thereto delivered pursuant to Section 5.7(a) or on Schedule 5.6

which, either individually or in the aggregate, could reasonably be expected to

be material to Borrower.

(d)           Projections.  

On and as of the Restatement Date, the financial projections, attached

hereto as Schedule 5.7(d) (the “Projections”) have been prepared

on a basis consistent with the financial statements referred to in Section

5.7(a) and are based on good faith estimates and assumptions made by the

management of Borrower, and there are no statements or conclusions in any of

the Projections which are based upon or include information known to Borrower

to be misleading or which fail to take into account material information known

to Borrower regarding the matters reported therein; provided that for the third

quarter of Fiscal Year 2001 the individual line items set forth in the

Projections (other than Diluted Earnings Per Share) are subject to the

information and discussion set forth on the news release included with such

Projections.  On the Restatement Date,

Borrower believed that the Projections were reasonable and attainable, it being

understood that uncertainty is inherent in any forecasts or projections and

that no assurance can be given that the results set forth in the Projections

will actually be obtained.

5.8           No

Material Litigation.  There are

no actions, suits, proceedings or investigations pending or, to the knowledge

of Borrower, threatened against Borrower or any of its Subsidiaries or any of

its or their respective properties or assets before any arbitrator or

Governmental Authority (a) with respect to this Agreement or any other Loan

Document or any of the actions contemplated hereby or thereby, or (b) which

would reasonably be expected to have a Material Adverse Effect.

5.9           Performance

of Agreements.  Neither Borrower

nor any of its Subsidiaries is in default in the performance, observance or

fulfillment of any of the obligations, covenants or conditions contained in any

Contractual Obligation of Borrower or any of its Subsidiaries and no event or

condition has occurred or become known or exists which with notice or the lapse

of time or both would constitute such a default except where such default or

defaults, if any, would not reasonably be expected to have a Material Adverse

Effect.

5.10         Taxes.  Borrower and each of its Subsidiaries has

filed or caused to be filed all material tax returns and reports which are

required to be filed, and has paid all taxes shown to be due and payable on

said returns or on any assessments made against it or any of its properties or

assets and all other taxes, fees and other charges imposed on its or any of

their respective properties by any Governmental Authority other than those the

amount or validity of which are currently being contested in good faith by

appropriate proceedings diligently pursued and with respect to which reserves

in conformity with GAAP have been provided on the books of Borrower and/or its

Subsidiaries, as applicable) and no material tax Lien has been filed or

received.  There is no proposed tax

assessment against Borrower or any of its Subsidiaries which would reasonably

be expected to have a Material Adverse Effect.

5.11         Governmental

Regulation.  (i)  Neither Borrower nor any of its Subsidiaries

is an “investment company” or a company “controlled” by a company required to

be registered as an “investment company” within the meaning of the Investment

Company Act of 1940, as amended, and (ii) neither Borrower nor any of its

Subsidiaries is engaged directly or indirectly, principally, or as one of its

important activities, in the business of extending, or arranging for the

extension of, credit for the purposes of purchasing or carrying any margin

stock, within the meaning of Regulation T, U or X of the Board.

5.12         Ownership

of Property; Liens.  Each of

Borrower and its Subsidiaries has good and indefeasible title in fee simple to,

or a valid leasehold interest in, all its material real property, and good

title to, or a valid leasehold interest in, all its other material property,

and none of such property is subject to any Lien except for Permitted Liens.

5.13         Intellectual

Property.  Borrower and each of

its Subsidiaries owns, or is licensed to use, all trademarks, tradenames,

copyrights, technology, know-how, patents and processes necessary for the

conduct of its business as currently conducted, except for those the failure to

own or be licensed to use, which would not reasonably be expected to have a

Material Adverse Effect (the “Intellectual Property”).  No claim has been asserted and is pending by

any Person challenging or questioning the use of any such Intellectual Property

or the validity or effectiveness of any such Intellectual Property, nor does

Borrower know of any valid basis for any such claim except for such claims and

infringements that, in the aggregate, would not reasonably be expected to have a

Material Adverse Effect.  To Borrower’s

or any of its Subsidiaries’ knowledge, the use of such Intellectual Property by

Borrower and its Subsidiaries does not infringe on the rights of any Person, in

each case except for such claims and infringements that, in the aggregate,

would not reasonably be expected to have a Material Adverse Effect.

5.14         Disclosure.  This Agreement and any other document,

certificate or statement furnished to Agent or any Lender by or on behalf of

Borrower or any of its Subsidiaries, taken as a whole, do not contain any

untrue statement of a material fact and do not omit to state a material fact

necessary in order to make the statements contained herein and therein not

misleading when made.  There is no fact

known to Borrower or any of its Subsidiaries which now has or in the future

would reasonably be expected to have (so far as Borrower or any of its

Subsidiaries can now reasonably foresee) a Material Adverse Effect which has

not been disclosed in this Agreement, or in the other documents and

certificates furnished to Agent and each Lender specifically for use in

connection with the transactions contemplated hereby.

5.15         ERISA.  Borrower and each of its ERISA Affiliates

are in compliance in all material respects with applicable provisions of ERISA

and the Code and the regulations and published interpretations thereunder with

respect to all Plans and, to the best of Borrower’s knowledge, all

Multiemployer Plans, except where noncompliance would not reasonably be

expected to have a Material Adverse Effect. 

No Termination Event has occurred or is reasonably expected to occur

with respect to any Plan.  The sum of

the “amounts of unfunded benefit commitments” (as defined in Section

4001(a)(18) of ERISA) under all Plans (excluding each Plan with an amount of

unfunded benefit commitments of zero or less) is not more than $7,500,000.  The aggregate Withdrawal Liability under all

Multiemployer Plans is not more than $7,500,000.

5.16         Labor

Relations.  Except to the extent

that such practices, circumstances, events or questions would not, individually

or in the aggregate, reasonably be expected to have a Material Adverse Effect,

(a) neither Borrower nor any of its Subsidiaries is engaged in any unfair labor

practice and (b) no significant strike, labor dispute, slowdown or stoppage is

pending against Borrower or any of its Subsidiaries or, to the best knowledge

of Borrower, threatened against Borrower or any of its Subsidiaries.

5.17         Insurance.  Except as otherwise permitted by Section

7.8, the properties of Borrower and its Subsidiaries are insured with

financially sound and reputable insurance companies, in such amounts, with such

deductibles and covering such risks as are customarily carried by Persons

engaged in the same or similar businesses.

5.18         Public

Utility Holding Company Act. 

Neither Borrower nor any of its Subsidiaries is a “holding company,” or

a “subsidiary company” of a “holding company,” or an “affiliate” of a “holding

company” or of a “subsidiary company” of a “holding company,” within the

meaning of the Public Utility Holding Company Act of 1935, as amended.

5.19         Security

Documents.

(a)           Security Agreement Collateral.  The provisions of each Security

Agreement  are effective to create in

favor of Collateral Agent for the benefit of the Secured Creditors a legal,

valid and enforceable security interest in all right, title and interest of the

relevant Credit Party in the Collateral, and each Security Agreement, together

with the timely filings of Form UCC-1 creates a fully perfected first lien on,

and security interest in, all right, title and interest of the relevant Credit

Party in all of the Collateral described therein, subject to no other Liens

other than Permitted Liens.  Each Credit

Party has good and marketable title to, or rights in, all Collateral, free and

clear of all Liens except Permitted Liens.

(b)           Real Estate Collateral.  The Mortgage executed on the Restatement

Date creates, as security for the obligations purported to be secured thereby,

a valid and enforceable perfected security interest in and Lien on the

Mortgaged Property for the benefit of the Secured Creditors, superior to and

prior to the rights of all third Persons (except that the security interest

created in the Mortgaged Property may be subject to the Permitted Liens related

thereto and any Liens referred to in the Mortgage Policy) and subject to no

other Liens (other than Permitted Real Property Encumbrances and any Liens

referred to in the Mortgage Policy).

5.20         Matters Pertaining to Second

Amendment and Restatement Agreement.

                (a)           Representations and Warranties.  Each of the representations and warranties

given by Borrower in the Agreement are true and correct in all material

respects as of the Restatement Date, except to the extent such representations

and warranties are expressly made as of a specified date in which event such

representations and warranties shall be true and correct as of such specified

date.

                (b)           Corporate Power; Authorization; No Violation.  The execution, delivery and performance by

each Credit Party of the Second Amendment and Restatement Agreement and the

other Loan Documents to which it is a party (i) are within such Credit

Party’s corporate power, (ii) have been duly authorized by all necessary

corporate, shareholder and other action on the part of each Person whose

authorization is required, (iii) do not violate any Requirement of Law or any

material Contractual Obligation applicable to such Credit Party, (iv) will not

result in or require the creation or imposition of any Lien of any nature upon

or with respect to any of the properties now owned or hereafter acquired by

such Person (other than any permitted by the Loan Documents) and (v) will not

require any authorization or approval or other action by, or notice to or

filing or registration with, any Governmental Authority (other than those which

have been obtained and are in force and effect).

 

 

ARTICLE

VI

CONDITIONS OF CREDIT

6.1           Conditions Precedent to

Effectiveness.  The amendments

to the First Amended and Restated Credit Agreement effected hereby shall become

effective upon the satisfaction of each of the following conditions:

(a)           Loan Documents. 

Agent shall have received each of:

(i)            the Second Amendment and Restatement

Agreement, executed and delivered by a duly authorized officer of Borrower, the

Agent and the Majority Lenders;

(ii)           for the account of each Lender

requesting the same, Notes conforming to the requirements hereof and executed

by a duly authorized officer of Borrower;

(iii)          a Security Agreement executed and

delivered by a duly authorized officer of Borrower and each Subsidiary

Guarantor substantially in the form of Exhibit 6.1(a)(iii) hereto (as

amended, restated, supplemented or otherwise modified from time to time, in the

case of the Borrower the "Borrower Security Agreement" and in

the case of the Subsidiary Guarantors the "Subsidiary Guarantor

Security Agreement" collectively with the Borrower Security Agreement,

the “Security Agreements”) together with:

(a)           proper financing

statements (Form UCC-1 or such other financial statements or similar notices as

shall be required by local law) fully executed for filing under the UCC or

other appropriate filing offices of each jurisdiction as may be necessary or,

in the opinion of Agent, desirable to perfect the security interests purported

to be created by the Security Agreements;

 (b)          evidence of the completion of all other recordings and

filings of, or with respect to, the Security Agreements and all other actions

as may be necessary or, in the opinion of Agent, desirable to perfect the

security interests intended to be created by the Security Agreements;

 (c)          evidence that all other actions necessary, or in the

reasonable opinion of Agent, desirable to perfect the security interests

purported to be granted by the Security Agreement have been taken;

(iv)          the Amended and Restated Pledge

Agreement executed and delivered by a duly authorized officer of Borrower

substantially in the form of Exhibit 6.1(a)(iv) hereto (as amended,

restated, supplemented or otherwise modified from time to time, the “Pledge

Agreement”) and all the Pledged Securities referred to therein then owned,

if any, by such Credit Party, (x) endorsed in blank in the case of promissory

notes constituting Pledged Securities and (y) together with executed and undated

stock powers, in the case of capital stock constituting Pledged Securities, or

other transfer assignment instruments in form and substance satisfactory to

Agent, in the case of membership interests constituting Pledged Securities and

(z) the Pledge Agreement and such other documents shall be in full force and

effect, and each Credit Party which is a limited liability company shall have

certificated all existing membership interests and delivered to Agent, as

pledgee, such pledged certificates as Pledged Securities;

 

(v)           the Amended and Restated Guaranty

executed and delivered by a duly authorized officer of each Subsidiary

Guarantor substantially in the form of Exhibit 6.1(a)(v) (as amended,

restated, supplemented or otherwise modified from time to time, the “Subsidiary

Guaranty”); and

 

(vi)          the Mortgage in the form of Exhibit

6.1(a)(vi)(i), executed by Borrower’s Subsidiary, Vision Ease Lens, Inc.,

with respect to such Subsidiary’s real property in the city of Ramsey,

Minnesota together with a "marked up" Mortgage Title Insurance

Commitment in the form attached hereto as Exhibit 6.1(a)(vi)(ii).

 

(b)           Corporate Proceedings.  Agent shall have received (i) a copy of the

resolutions, in form and substance satisfactory to Agent, of the board of

directors of Borrower authorizing (x) the execution, delivery and performance

of the Second Amendment and Restatement Agreement, the Notes and the other Loan

Documents to which it is a party and (y) the borrowings and other extensions of

credit contemplated hereunder, certified by the Secretary or an Assistant

Secretary of Borrower as of the Restatement Date, which certificate shall state

that the resolutions thereby certified have not been amended, revoked, or

rescinded and shall be in form and substance satisfactory to Agent, (ii) a copy

of the resolutions, in form and substance satisfactory to Agent, of the board

of directors of each Subsidiary Guarantor authorizing (x) the execution,

delivery and performance of each Loan Document to which it is a party,

certified by the Secretary or an Assistant Secretary of each such Subsidiary

Guarantor as of the Restatement Date, which certificate shall state that the

resolutions thereby certified have not been amended, revoked, or rescinded and

shall be in form and substance satisfactory to Agent and (iii) copies of all

documents and papers, including records of corporate proceedings, governmental

approvals, good standing certificates, and bring down telegrams, if any, which

Agent reasonably may have requested in connection therewith, such documents and

papers where appropriate to be certified by proper corporate or governmental

authorities.

(c)           Corporate Documents.  Agent shall have received, with a

counterpart for each Lender, true and complete copies of the certificate of

incorporation and by-laws of Borrower and each Subsidiary, certified as of the

Restatement Date as complete and correct copies thereof by the Secretary or an

Assistant Secretary of such Person or a certificate of the Secretary or an

Assistance Secretary of such Person certifying that there has been no change to

such Certificate of Incorporation and By-laws since the Restatement Date.

(d)           Incumbency Certificate.  Agent shall have received a certificate of

the Secretary or an Assistant Secretary of each Credit Party, dated the

Restatement Date, as to the incumbency and signature of the officers of such

Person executing the Loan Documents to which it is a party and any certificate

or other documents to be delivered by it pursuant thereto.

(e)           Fees and Amendment Fee.  Agent and the Documentation Agent shall have

received, for their own accounts and/or the accounts of Lenders, (i) all

accrued fees and expenses due and owing hereunder or in connection herewith to

Lenders and Agents and (ii) an amendment fee in the amount of .125% of the sum

of the Commitments and Converted Term Loan Amounts of each Lender (after giving

effect to the Second Amendment and Restatement Agreement) that executes the

Second Amendment and Restatement Agreement on or before 5:00 p.m. central time,

October 12, 2001.

(f)            Legal Opinions. 

Agent shall have received, with a counterpart for each Lender, the

executed legal opinion of each of Faegre & Benson, counsel to the Credit

Parties, substantially in the form of Exhibit 6.1(f)(i) and of the

general counsel of Borrower substantially in the form of Exhibit 6.1(f)(ii).  Such legal opinions shall cover such other

matters incident to the transactions contemplated by the Second Amendment and

Restatement Agreement as Agent may reasonably require and such counsel

delivering the foregoing legal opinion is expressly instructed to deliver its

opinion for the benefit of each of Agent and the Lenders.

(g)           Approvals. 

All necessary governmental (domestic and foreign) and third party

approvals in connection with the Transaction and otherwise referred to herein

or therein shall have been obtained and remain in effect, and all applicable

waiting periods shall have expired without any action being taken by any

competent authority which restrains, prevents or imposes materially adverse

conditions upon the consummation of all or any part of the Transaction or the

other transactions contemplated by the Loan Documents and otherwise referred to

herein or therein.  Additionally, there

shall not exist any judgment, order, injunction or other restraint issued or

filed or a hearing seeking injunctive relief or other restraint pending or

notified prohibiting or imposing materially adverse conditions upon all or any

part of the Transaction, the transactions contemplated by the Documents or the

making of the Loans or the issuance of the Letters of Credit.

(h)           Litigation. 

No litigation by any entity (private or governmental) shall be pending

or, to the best knowledge of Borrower, threatened with respect to the Second

Amendment and Restatement Agreement, any of the Loan Documents or any

documentation executed in connection herewith or the transactions contemplated

hereby (including, without limitation, the Transaction), or the obligations

being refinanced in connection with the consummation of the Transaction or

which Agents or the Majority Lenders shall determine could reasonably be

expected to have a Material Adverse Effect.

(i)            Officer’s Certificate.  Agents shall have received a certificate

executed by a responsible officer on behalf of Borrower, dated the Restatement

Date and in the form of Exhibit 6.1(i) hereto, stating that the

representations and warranties set forth in Article V hereof are true

and correct as of the date of the certificate, that no Event of Default or

Unmatured Event of Default has occurred and is continuing and that the

conditions of Section 6.1 hereof have been fully satisfied (except

that no opinion need be expressed as to the Agent’s or Majority Lenders’

satisfaction with any document, instrument or other matter).

(j)            Adverse Change. 

On or prior to the Restatement Date, nothing shall have occurred (and

none of the Agents nor any Lender shall have become aware of any facts or

conditions not previously known) which Agents or the Majority Lenders shall

determine has or reasonably could be expected to have, or could have a Material

Adverse Effect.

6.2           Certain Conditions Precedent

to Each Loan or Letter of Credit. 

The agreement of each Lender to make a Loan (including, without

limitation, its initial Loans hereunder, but other than any Revolving Loan the

proceeds of which are to be used exclusively to repay Refunded Swing Line

Loans) and the obligation of any Facing Agent to issue or any Lender to

participate in any Letter of Credit is subject to the satisfaction of the

following conditions precedent:

(a)           Representations and Warranties.  All representations and warranties of

Borrower and each other Credit Party contained herein and in the other Loan

Documents shall be true and correct in all material respects with the same

effect as though such representations and warranties had been made on and as of

the date of the making of such Loan or Letter of Credit;

(b)           No Events of Default.  There shall exist no Event of Default or

Unmatured Event of Default;

(c)           Available Revolving Commitment.  After giving effect to the Loans and Letters

of Credit requested to be made, no Lender will have an Available Revolving

Commitment which is less than zero; and

(d)           Other Matters. 

Agent shall have received such other documents as required by this

Agreement in connection with such Loan, all in form and substance as required

by this Agreement including, with respect to Revolving Loans, a request for a

Borrowing in accordance with the provisions of Section 2.5 hereof; and

with respect to the issuance of a Letter of Credit, Agent and the respective

facing Agent shall have received a Letter of Credit Request meeting the

requirements of Section 2.9(b).

Each request for a

Borrowing and the acceptance by Borrower of the proceeds thereof shall constitute

a representation and warranty by Borrower, as of the date of the Loans

comprising such Borrowing, that the conditions specified in Section 6.2(a),

(b) and (c) have been satisfied.

ARTICLE

VII

AFFIRMATIVE COVENANTS

Borrower hereby agrees that, so long as any Commitment

remains in effect, or any Loan or LC Obligation remains outstanding and unpaid

or any other amount is owing to any Lender or any Agent hereunder, Borrower

shall:

7.1           Financial Statements.  Furnish to each Lender:

(a)           as

soon as available, but in any event within 120 days after the end of each

fiscal year of Borrower, a copy of the consolidated and consolidating (by

business unit) balance sheet of Borrower and its consolidated Subsidiaries as

at the end of such year and the related consolidated and consolidating (by

business unit) statements of income, retained earnings and of cash flows for

such year, setting forth in each case in comparative form the figures for the

previous year; and

(b)           as

soon as available, but in any event not later than 45 days after the end of

each of the quarterly periods of each fiscal year of Borrower, the unaudited

consolidated and consolidating (by business unit) balance sheet of Borrower and

its consolidated Subsidiaries as at the end of such quarter and the related

unaudited consolidated and consolidating (by business unit) statements of

income, retained earnings and of cash flows of Borrower and its consolidated

Subsidiaries for such quarter and the portion of the fiscal year through the

end of such quarter, setting forth in each case in comparative form the figures

for the previous year (except with respect to balance sheet figures which shall

be in comparative form for the previous audited period only);

all such financial

statements shall be complete and correct in all material respects and shall be

prepared in accordance with GAAP applied consistently throughout the periods

reflected therein and with prior periods (except as approved by the accountants

preparing such statements or Financial Officer, as the case may be, and

disclosed therein) and, in the case of the consolidated financial statements

referred to in Section 7.1(a), accompanied by a report thereon of

independent certified public accountants of recognized national standing, which

report shall contain no qualifications with respect to the continuance of

Borrower and its Subsidiaries as going concerns and shall include a statement

to the effect that such financial statements present fairly in all material

respects the consolidated financial position of Borrower and its Subsidiaries

as at the dates indicated and the consolidated results of their operations and

cash flow for the periods indicated in conformity with GAAP and that the

examination by such accountants in connection with such financial statements

has been made in accordance with generally accepted auditing standards.

7.2           Certificates;

Other Information.  Furnish to

each Lender (or, if specified below, to Agent):

(a)           Accountant’s Certificates.  Concurrently with the delivery of the

financial statements referred to in Section 7.1(a), (i) to the extent

not contrary to the then current recommendations of the American Institute of

Certified Public Accountants, a certificate from Ernst & Young L.L.P. or

other independent certified public accountants of nationally recognized

standing, stating that, in the course of their annual audit of the books and

records of Borrower, no Event of Default or Unmatured Event of Default has come

to their attention which was continuing at the end of such fiscal year or on

the date of their certificate, or if such an Event of Default or Unmatured

Event of Default has come to their attention, the certificate shall indicate

the nature of such Event of Default or Unmatured Event of Default and the

action which Borrower proposes to take with respect thereto, and (ii) a letter,

in form reasonably satisfactory to Agent from such accountants with respect to

reliance on such accountant’s certificate and report on the annual consolidated

financial statements referred to in this Section;

(b)           Officer’s Certificate.  Concurrently with the delivery of the

financial statements referred to in Sections 7.1(a) and 7.1(b), a

certificate of a Financial Officer substantially in the form of Exhibit

7.2(b) stating that, to the best of such Financial Officer’s knowledge, (i)

such financial statements present fairly, in accordance with GAAP, the

financial condition and results of operations of Borrower and its Subsidiaries

for the period referred to therein (subject, in the case of interim statements,

to normal recurring adjustments) and 

(ii) that no Event of Default or Unmatured Event of Default has

occurred, in each case except as specified in such certificates, which shall

set forth detailed computations to the extent necessary to establish whether

Borrower is in compliance with the covenants set forth in Section 8.1 of

this Agreement;

(c)           Budgets; Projections.  As soon as available and in any event within

sixty (60) days following the first day of each fiscal year of Borrower (i) an

annual budget in form substantially similar to the Projections (including

budgeted statements of operations, income, cash flows, retained earnings and

shareholders’ equity and balance sheets) prepared by Borrower for each fiscal

quarter of such fiscal year and (ii) projections in form substantially similar

to the Projections covering the period from such fiscal year through the

Termination Date, in each case prepared in reasonable detail, with appropriate

presentation and discussion of the principal assumptions upon which such

budgets and projections are based, which shall be accompanied by the statement

of the chief executive officer or Chief Financial Officer of Borrower to the

effect that, to the best of his knowledge, such budget and projections are a

reasonable estimate for the periods respectively covered thereby;

(d)           Audit Reports and Statements.  Promptly following Borrower’s receipt

thereof, copies of all consolidated financial or other consolidated reports or

statements, if any, submitted to Borrower or any of its Subsidiaries by

independent public accountants relating to any annual or interim audit of the

books of Borrower or any of its Subsidiaries;

(e)           Public Filings. 

Within 20 days after the same become public, copies of all financial

statements, filings, registrations and reports which Borrower may make to, or

file with, the United States Securities and Exchange Commission or any

successor or analogous U.S. Governmental Authority;

(f)            Status.  Within

five Business Days after the occurrence thereof, written notice to Agent of any

change in the Most Recent Ratio of Consolidated Debt to Consolidated EBITDA

which results in a change in the Applicable Margin or the Applicable Commitment

Fee, provided, however, that the failure to provide such notice

shall not delay or otherwise affect any change in the Applicable Margin or

other amount payable hereunder which is to occur upon such a change pursuant to

the terms of this Agreement; and

(g)           Other Requested Information  Such other information respecting the respective

properties, business affairs, financial condition and/or operations of Borrower

or any of its Subsidiaries as Agent or any Lender may from time to time

reasonably request.

7.3           Notices.  Promptly upon obtaining knowledge thereof,

give notice to Agent (which shall promptly provide a copy of such notice to

each Lender) of:

(a)           Event of Default or Unmatured

Event of Default.  The

occurrence of any Event of Default or Unmatured Event of Default, accompanied

by a statement of a Financial Officer setting forth details of the occurrence

referred to therein and stating what action Borrower proposes to take with

respect thereto.

(b)           Litigation and Related Matters.  The commencement of, or any material

development in any action, suit, proceeding or investigation pending or

threatened against or affecting Borrower or any of its Subsidiaries or any of

their respective properties before any arbitrator or Governmental Authority, in

which the amount involved that Borrower reasonably determines is not covered by

insurance is $7,500,000 or more, or which, if determined adversely to Borrower

or any of its Subsidiaries, would reasonably be expected to have a Material

Adverse Effect.

(c)           Notice of Change of Control.  Each occasion that there shall occur a

Change of Control, and such notice shall set forth in reasonable detail the

particulars of each such occasion.

7.4           Conduct of Business and

Maintenance of Existence. 

Continue to engage in business of the same general type as now conducted

by it and preserve, renew and keep in full force and effect its and each

Subsidiary’s corporate existence (except for any Subsidiary merged or otherwise

consolidated with or into Borrower or another Subsidiary) and take all

reasonable action to maintain all rights, privileges and franchises material to

its and those of each of its Subsidiaries’ businesses except as otherwise

permitted pursuant to Sections 8.4 and 8.7 and comply and cause

each of its Subsidiaries to comply with all Contractual Obligations and

Requirements of Law except to the extent that failure to comply therewith would

not in the aggregate reasonably be expected to have a Material Adverse Effect.

7.5           Payment

of Obligations.  Pay or

discharge or otherwise satisfy at maturity or, to the extent permitted hereby,

prior to maturity or before they become delinquent, as the case may be, and

cause each of its Subsidiaries to pay or discharge or otherwise satisfy at or

before maturity or before they become delinquent, as the case may be:

(i)            all its and their respective Indebtedness;

(ii)           all

taxes, assessments and governmental charges or levies imposed upon any of them

or upon any of their income or profits or any of their respective properties or

assets prior to the date on which penalties attach thereto; and

(iii)          all

lawful claims prior to the time they become a Lien (other than Permitted Liens)

upon any of their respective properties or assets;

provided, however, that neither Borrower

nor any of its Subsidiaries shall be required to pay or discharge any such

Indebtedness, tax, assessment, charge, levy or claim while the same is being

contested by it in good faith and by appropriate proceedings diligently pursued

so long as Borrower or such Subsidiary, as the case may be, shall have set

aside on its books adequate reserves in accordance with GAAP (segregated to the

extent required by GAAP) with respect thereto and title to any material

properties or assets is not jeopardized in any material respect.

7.6           Inspection of Property, Books and

Records.  Keep, or cause to be

kept, and cause each of its Subsidiaries to keep or cause to be kept, adequate

records and books of account, in which complete entries are to be made

reflecting its and their business and financial transactions, such entries to

be made in accordance with sound accounting principles consistently applied and

will permit, and cause each of its Subsidiaries to permit, any Lender or its

respective representatives, at any reasonable time, and from time to time at

the reasonable request of such Lender made to Borrower and upon reasonable

notice, to visit and inspect its and their respective properties, to examine

and make copies of and take abstracts from its and their records and books of

account, and to discuss its and their respective affairs, finances and accounts

with its and their principal officers, directors and independent public

accountants (and by this provision Borrower authorizes such accountants to

discuss with the Lenders and such representatives the affairs, finances and

accounts of Borrower and its Subsidiaries; provided, however,

that prior to the occurrence and continuance of an Event of Default, all such

discussions shall take place in the presence of a Financial Officer of

Borrower).

7.7           ERISA.  (i) 

As soon as practicable and in any event within thirty days after

Borrower or any of its Subsidiaries or ERISA Affiliates knows or has reason to

know that a Reportable Event has occurred with respect to any Plan which would

have a Material Adverse Effect, deliver, or cause such Subsidiary or ERISA

Affiliate to deliver, to Agent a certificate of a responsible officer of

Borrower or such Subsidiary or ERISA Affiliate, as the case may be, setting

forth the details of such Reportable Event and the action, if any, which

Borrower or such Subsidiary or ERISA Affiliate is required or proposes to take,

together with any notices required or proposed to be given; (ii) upon the

request of any Lender made from time to time, deliver, or cause each Subsidiary

or ERISA Affiliate to deliver, to each Lender a copy of the most recent actuarial

report completed and annual report filed with respect to any Plan; (iii) as

soon as possible and in any event within ten (10) days after Borrower or any of

its Subsidiaries or ERISA Affiliates knows or has reason to know that any of

the following have occurred or is reasonably likely to occur with respect to

any Plan and could reasonably be expected to have a Material Adverse Effect:

(A) the Plan Sponsor intends to terminate such Plan, (B) the PBGC has

instituted or will institute proceedings under Section 4042 of ERISA to

terminate such Plan, (C) that an accumulated funding deficiency (as defined in

Section 3.02(a) of ERISA and Section 412(a) of the Code) has been incurred or

that on application may be or has been made to the Secretary of the Treasury

for a waiver or modification of the minimum funding standard (including any

required installment payments) or on extension of any amortization period under

Section 412 of the Code, or (D) that Borrower, or any Subsidiary of Borrower or

any ERISA Affiliate will or is reasonably likely to incur any liability

(including, but not limited to, contingent or secondary liability) to or on

account of the termination of or withdrawal from a Plan under Section

401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(1) of ERISA,

deliver, or cause such Subsidiary or ERISA Affiliate to deliver, to Agent a

written notice thereof; and (iv) as soon as possible and in any event within

thirty days after Borrower or any of its Subsidiaries or ERISA Affiliates knows

or has reason to know that any of them has caused a complete withdrawal or

partial withdrawal (within the meaning of Sections 4203 and 4205, respectively,

of ERISA) from any Multiemployer Plan and that such withdrawal could reasonably

be expected to have a Material Adverse Effect, deliver, or cause such

Subsidiary or ERISA Affiliate to deliver, to Agent a written notice

thereof.  For purposes of this Section

7.7, Borrower shall be deemed to have knowledge of all facts known by the

Plan Administrator of any Plan of which Borrower is the Plan Sponsor, and each

Subsidiary and ERISA Affiliate of Borrower shall be deemed to have knowledge of

all facts known by the Plan Administrator of any Plan of which such Subsidiary

or ERISA Affiliate, respectively, is a Plan Sponsor.  In addition to its other obligations set forth in this Section

7.7, Borrower shall, and shall cause each of its Subsidiaries and ERISA

Affiliates to,

(A)          furnish to Agent, promptly after

delivery of the same to the PBGC by Borrower or any of its Subsidiaries, a copy

of any delinquency notice pursuant to Section 412(n) (4) of the Code,

(B)           correct any such failure to satisfy

funding requirements or delinquency referred to in the foregoing clauses

(iii)(C) of the first sentence of this Section 7.7 and clause (A)

above within ninety (90) days after the occurrence thereof, except where the

failure to so satisfy would not reasonably be expected to have a Material

Adverse Effect, and

(C)           comply in good faith with the

requirements set forth in Section 4980B of the Code and with Sections

601(a) and 606 of ERISA, except where the failure to so comply could not

reasonably be expected to have a Material Adverse Effect.

7.8           Insurance.  Borrower shall maintain, and shall cause

each of its Subsidiaries to maintain, with financially sound and reputable

insurers, insurance with respect to its properties and business against loss or

damage of the kinds customarily insured against by Persons engaged in the same

or similar business, or such types and in such amounts as are customarily

carried under similar circumstances by such other Persons.  Such insurance shall be maintained with

financially sound and reputable insurers, except that a portion of such

insurance program (not to exceed that which is customary in the case of

companies engaged in the same or similar business or having similar properties

similarly situated) may be effected through self-insurance, provided adequate

reserves therefor, in accordance with GAAP, are maintained.

7.9           Environmental

Laws.

(a)           Comply

with in all material respects, and cause its Subsidiaries to comply with in all

material respects, and, in each case take reasonable steps to ensure compliance

in all material respects by all tenants and subtenants, if any, with, all

applicable Environmental Laws and obtain and comply in all material respects

with and maintain, and take reasonable steps to ensure that all tenants and

subtenants obtain and comply in all material respects with and maintain, any

and all licenses, approvals, notifications, registrations or permits required

by applicable Environmental Laws except to the extent that failure to do so

would not reasonably be expected to have a Material Adverse Effect;

(b)           Conduct

and complete all investigations, studies, sampling and testing, and all

remedial, removal and other actions required under Environmental Laws and

promptly comply in all material respects with all lawful orders, directives and

information requests of all Governmental Authorities regarding Environmental

Laws except to the extent that the same are being contested in good faith by

appropriate proceedings and the pendency of such proceedings would not  reasonably be expected to have a Material

Adverse Effect; and

(c)           Defend,

indemnify and hold harmless Agent and the Lenders, and their respective

employees, agents, officers and directors, from and against any and all claims,

demands, penalties, fines, liabilities, settlements, damages, costs and

expenses of whatever kind or nature known or unknown, contingent or otherwise,

arising out of, or in any way relating to the violation of, noncompliance with

or liability under, any Environmental Law applicable to the operations of

Borrower, any of its Subsidiaries or their respective properties, or any

orders, requirements or demands of Governmental Authorities related thereto,

including, without limitation, reasonable attorneys’ and consultants’ fees,

investigation and laboratory fees, costs arising from any Remedial Actions,

court costs and litigation expenses, except to the extent that any of the

foregoing arise out of the gross negligence or willful misconduct of the party

seeking indemnification therefor.  The

agreements in this clause (c) shall survive repayment of the Notes and all

other Obligations.

7.10         Intentionally

Omitted.

7.11         Intentionally

Omitted.

7.12         Additional

Security; Further Assurances.

(a)           Additional Subsidiary Guarantors.  Borrower agrees to cause each new Domestic

Subsidiary established or created in accordance with Sections 8.4 and 8.8

(a “New Domestic Subsidiary”) to execute and deliver the Subsidiary

Guaranty or such other guaranty of all Obligations and all obligations under

Interest Rate Protection Agreements entered into with a Lender or any Affiliate

thereof in form and substance reasonably satisfactory to Agent.

(b)           Pledge of New Subsidiary Stock.  Borrower agrees to pledge, or to cause its

Subsidiaries to pledge, (i) all of the Capital Stock of each New Domestic

Subsidiary and (ii) 65% of all Capital Stock of each new Foreign Subsidiary

owned directly by Borrower or any Domestic Subsidiary established or created to

Collateral Agent for the benefit of the Secured Creditors pursuant to the

Pledge Agreement.

(c)           Grant of Security by New

Domestic Subsidiaries.  Borrower

will cause each New Domestic Subsidiary which is required to execute and

deliver the Subsidiary Guarantee Agreement pursuant to Section 7.12(a)

to grant to Collateral Agent a first priority Lien (subject to Permitted Liens)

on all property of such Subsidiary that would have constituted Collateral on the

Restatement Date upon terms substantially similar to those set forth in the

Security Documents as appropriate, and reasonably satisfactory in form and

substance to Agent.  Borrower shall

cause each Subsidiary, at its own expense, to execute, acknowledge and deliver,

or cause the execution, acknowledgment and delivery of, any document or

instrument necessary or desirable for the creation and perfection of the

foregoing Liens.  Borrower will cause

each of its newly established Subsidiaries to take all actions requested by

Agent (including, without limitation, the filing of UCC-1’s) in connection with

the granting and perfecting of such security interests.

(d)           Documentation for Additional

Security.  The security

interests required to be granted pursuant to this Section 7.12 shall be

granted pursuant to such security documentation (which shall  be substantially similar to the Security

Documents already executed and delivered by the Credit Parties on the

Restatement Date) reasonably satisfactory in form and substance to Agent and

shall constitute valid and enforceable perfected security interests prior to

the rights of all third Persons (subject to Permitted Liens) and subject to no

other Liens except Permitted Liens.  The

Additional Security Documents and other instruments related thereto shall be

duly recorded or filed in such manner and in such places and at such times as

are required by law to establish, perfect, preserve and protect the Liens, in

favor of Collateral Agent for the benefit of the Secured Creditors, required to

be granted pursuant to the Additional Security Document and, all taxes, fees

and other charges payable in connection therewith shall be paid in full by

Borrower.  At the time of the execution

and delivery of the Additional Security Documents, Borrower shall cause to be

delivered to the Collateral Agent such agreements, certificates, opinions of

counsel and other related documents as may be reasonably requested by Agent to

assure Agent that this Section 7.12 has been complied with.

(e)           Foreign Subsidiaries Security.  If following a change in applicable law,

including the relevant sections of the Code or the regulations promulgated

thereunder, counsel for Borrower reasonably acceptable to Agent does not within

45 days after a request from Agent or the Lenders deliver evidence, in form and

substance reasonably satisfactory to Agent, with respect to any Foreign

Subsidiary which has not already had all of its stock pledged pursuant to the

Pledge Agreement that a pledge of 66-2/3% or more of the total combined voting

power of all classes of capital stock of such Foreign Subsidiary entitled to

vote would cause the undistributed earnings of such Foreign Subsidiary as

determined for Federal income tax purposes to be treated as a deemed dividend

to such Foreign Subsidiary’s United States parent for Federal income tax

purposes, then that portion of such Foreign Subsidiary’s outstanding capital

stock not theretofore pledged pursuant to the Pledge Agreement shall be pledge

to the Collateral Agent for the benefit of the Secured Creditors pursuant to

the Pledge Agreement (or another pledge agreement in substantially similar

form, if needed), to the extent that entering into such Pledge Agreement is

permitted by the laws of the respective foreign jurisdiction and with all

documents delivered pursuant to this Section 7.12 to be in form and

substance reasonably satisfactory to Agent.

7.13  Pledge of BV1.             Borrower shall, as soon as practicable, but in any event

not later than January 31, 2000 (subject to extension in the reasonable

discretion of the Agent), pledge 65% of the issued and outstanding Capital

Stock of Buckbee-Mears Holding Company B.V., to the Collateral Agent for the

benefit of the Secured Creditors pursuant to documentation reasonably

satisfactory to the Agent, including, without limitation, an opinion of counsel

(if requested by Agent).

ARTICLE

VIII

NEGATIVE COVENANTS

Borrower hereby

agrees that, so long as the Revolving Commitments remain in effect or any

Obligation is owing to any Lender or any Agent hereunder, Borrower shall not,

nor shall it permit any of its Subsidiaries to, directly or indirectly:

8.1           Financial Condition Covenants.

(a)           Maintenance of Consolidated Net Worth.  Permit Consolidated Net Worth on the last

day of any fiscal quarter to be less than the sum of (i)  $150,000,000 plus

(ii) the amount equal to 50% of the aggregate Consolidated Net Income of

Borrower and its consolidated Subsidiaries since December 31, 1997; provided,

however, that in the event that Borrower and its consolidated

Subsidiaries have a consolidated net loss for any fiscal quarter, Consolidated

Net Income for purposes only of clause (ii) of this Section 8.1(a) shall

be deemed to be zero for such fiscal quarter plus (iii) 75% of the Net

Offering Proceeds from the issuance of Capital Stock.

(b)           Leverage Ratio. 

Permit the ratio of (a) Consolidated Debt on the last day of any

fiscal quarter of Borrower (after giving effect to all payments and prepayments

made on or prior to such last day) to (b) (i) Consolidated EBITDA for the

period of four consecutive fiscal quarters ending on such last day plus (ii)

1997 Expansion Charge as of such day to be greater than the respective ratio

set forth below opposite such fiscal quarter:

	

  Fiscal Quarter Ending

  	

  Ratio

  
	

  September 30, 2001

  	

  3.75:1.0

  
	

  December 31, 2001

  through June 30, 2002

  	

  4.00:1.0

  
	

  September 30, 2002

  	

  3.75:1.0

  
	

  December 31, 2002

  	

  3.50:1.0

  
	

  March  31, 2003 and thereafter

  	

  3.00:1.0

  

 

(c)           Interest Coverage Ratio.  Permit the ratio of (a) (i)

Consolidated EBITDA for the period of four consecutive fiscal quarters

ending on the last day of any fiscal quarter of Borrower plus (ii) 1997

Expansion Charge as of such day to (ii) Consolidated Interest Expense for

such period to be less than the respective ratio set forth below opposite such

fiscal quarter:

	

  Fiscal Quarter Ending

  	

  Ratio

  
	

  September 30, 2001

  	

  3.00:1.0

  
	

  December 31, 2001

  through March 31, 2002

  	

  2.75:1.0

  
	

  June 30, 2002 through

  September 30, 2002

  	

  2.50:1.0

  
	

  December 31, 2002 and

  thereafter

  	

  2.75:1.0

  

 

(d)           Capital Expenditures. (i) Borrower will

not, and will not permit any of its Subsidiaries to, make any Capital

Expenditures, except that during any fiscal year Borrower and its Subsidiaries

may make Capital Expenditures so long as the aggregate amount so made by

Borrower and its Subsidiaries (on a consolidated basis) during such fiscal year

does not exceed $20,000,000.

(ii)           Notwithstanding the foregoing, in the

event that the amount of Capital Expenditures permitted to be made by Borrower

and its Subsidiaries pursuant to clause (i) above in any fiscal year (before

giving effect to any increase in such permitted expenditure amount pursuant to

this clause (ii)) is greater than the amount of such Capital Expenditures made

by Borrower and its Subsidiaries during such fiscal year, such excess (the

“Rollover Amount”) may be carried forward and utilized to make Capital

Expenditures in the next succeeding fiscal year, provided that in no event

shall the aggregate amount of Capital Expenditures made by Borrower and its

Subsidiaries during any fiscal year pursuant to Section 8.1(d)(i) exceed

125% of the amount set forth in such Section 8.1(d)(i).

(iii)          Notwithstanding the foregoing,

Borrower and its Subsidiaries may make Capital Expenditures (which Capital

Expenditures will not be included in any determination under the foregoing

clause (i)) with the insurance proceeds received by Borrower or any of its

Subsidiaries from any Recovery Event so long as such Capital Expenditures are

to replace or restore any properties or assets in respect to which such

proceeds are received.

8.2           Indebtedness.  Incur, directly or indirectly, or suffer to

exist any Indebtedness except:

(a)           Indebtedness

incurred pursuant to this Agreement and the other Loan Documents;

(b)           Intercompany

Indebtedness to the extent such Indebtedness constitutes a Permitted

Investment; provided, however, that in the event of any

subsequent issuance or transfer of any Capital Stock which results in the

holder of such Indebtedness ceasing to be a Credit Party of Borrower or any

subsequent transfer of such Indebtedness (other than to Borrower or any other

Credit Party) such Indebtedness shall be required to be permitted under another

clause of this Section 8.2; provided, further, however,

that in the case of Intercompany Indebtedness consisting of a loan or advance

to Borrower, each such loan or advance shall be subordinated to the

indefeasible payment in full of all of Borrower’s obligations pursuant to this

Agreement and the other Loan Documents, and each such loan or advance shall be

on open account and shall not be evidenced by a promissory note or other

instrument;

(c)           Indebtedness

outstanding on the Closing Date and listed on Schedule 8.2(c) hereto,

provided that the Indebtedness under Existing Credit Agreements have been paid

in full with the proceeds of the Initial Loans under the Original Agreement;

(d)           Indebtedness

under Interest Rate Protection Agreements entered into to protect Borrower or

any of its Subsidiaries against fluctuations in interest rates in respect of

the Obligations;

(e)           Indebtedness

under Currency Protection Agreements so long as management of Borrower or such

Subsidiary, as the case may be, has determined that entering into of such

Currency Protection Agreements are bona fide hedging activities;

(f)            Permitted Subordinated Indebtedness;

(g)           Indebtedness

of the Borrower pursuant to the Domestic Overdraft Facility in a principal

amount not to exceed $10,000,000 at any time outstanding;

(h)           Permitted IDB/Community Development Indebtedness; and

(i)            other Indebtedness in addition to

that described in clauses (a) through (h) of this Section 8.2; provided,

however, that the aggregate principal amount of the Indebtedness

permitted under this Section 8.2(i), when added to all Permitted

IDB/Community Development Indebtedness then outstanding does not exceed

$10,000,000.

8.3           Liens.

Create, incur, assume or suffer to exist or agree to create, incur or assume

any Lien (except for Permitted Liens) in, upon or with respect to any of its

properties or assets (including, without limitation, any securities or debt

instruments of any of its Subsidiaries), whether now owned or hereafter

acquired, or assign or otherwise convey any right to receive income to secure

any obligation.

8.4           Fundamental

Changes.  Enter into any merger,

consolidation or amalgamation, or liquidate, wind-up or dissolve itself (or

suffer any liquidation or dissolution); make any Material Asset Disposition;

make any Acquisition; or make any material change in its present method of

conducting business; provided, however, that as long as

immediately after giving effect to such transaction, the resulting, surviving

or transferee Person shall have Consolidated Net Worth in an amount which is

not less than the Consolidated Net Worth of such Person prior to such

transaction:

(a)           any

Subsidiary of Borrower may be merged or consolidated with or into Borrower (provided,

however, that Borrower shall be the continuing or surviving corporation)

or with or into any one or more Wholly-Owned Subsidiaries of Borrower (provided,

however, that (i) at least one Wholly-Owned Subsidiary shall be the

continuing or surviving corporation and (ii) in the case of any merger or

consolidation between Subsidiaries at least one of that is a Subsidiary

Guarantor, a Subsidiary Guarantor shall be the surviving Person);

(b)           any

Wholly-Owned Subsidiary may sell, lease, transfer or otherwise dispose of any

or all of its assets (upon voluntary liquidation or otherwise) to Borrower or

any other Wholly-Owned Subsidiary of Borrower;

(c)           Borrower

may make any Permitted Acquisition (which may be effected through a merger of a

Subsidiary with or into an acquired Person); and

(d)           Borrower may carry out the European

Reorganization.

8.5           Restricted

Payments.  Either:  (i) declare or pay any dividend or make any

distribution on or in respect of its Capital Stock or to the direct or indirect

holders of its Capital Stock (except dividends or distributions payable solely

in its Non-Convertible Capital Stock or in options, warrants or other rights to

purchase its Non-Convertible Capital Stock and except dividends or

distributions payable to Borrower or a Subsidiary of Borrower) or (ii)

purchase, redeem or otherwise acquire or retire for value any Capital Stock of

Borrower (any such dividend, distribution, purchase, redemption, repurchase,

defeasance, other acquisition, retirement or Investment being hereinafter

referred to as a “Restricted Payment”); provided, however, that

during such time as no Event of Default or Unmatured Event of Default has

occurred and is continuing or would result therefrom:

(a)           Borrower

or any Wholly-Owned Subsidiary of Borrower may make any Restricted Payment

which, together with all other Restricted Payments made since the Closing Date

would not exceed:

(i)            25% of the Consolidated Net Income

accrued during the period (treated as one accounting period) from December 31,

1997 to the end of the most recent Fiscal Quarter ending at least 45 days prior

to the date of such Restricted Payment (or, in case such Consolidated Net

Income shall be a deficit, minus 100% of such deficit), excluding, for all

purposes of this clause (i) items treated as balance sheet adjustments in

respect of foreign currency translations; plus

(ii)           $12,000,000; and

(b)           Borrower

may pay dividends within 60 days after the date of declaration thereof if at

such date of declaration such dividend would have complied with this Section

8.5; provided, however, that such dividend shall be included

(without duplication) in the calculation of the amount of Restricted Payment

for purpose of Section 8.5(a).

8.6           Distributions from Subsidiaries.  Create or otherwise cause or permit to exist

or become effective any consensual encumbrance or restriction on the ability of

any Subsidiary of Borrower to (i) pay dividends or make any other distributions

on its Capital Stock or pay any Indebtedness or other obligation owed to

Borrower or any of its other Subsidiaries, (ii) make any loans or advances to

Borrower or any of its other Subsidiaries, or (iii) transfer any of its

property or assets to Borrower or any of its other Subsidiaries, except:

(a)           any

encumbrance or restriction pursuant to an agreement in effect at or entered

into on the Closing Date and reflected on Schedule 8.6(a) hereto;

(b)           any

encumbrance or restriction with respect to a Subsidiary of Borrower pursuant to

an agreement relating to any Indebtedness issued by such Subsidiary on or prior

to the date on which such Subsidiary became a Subsidiary of Borrower or was

acquired by Borrower (other than Indebtedness issued as consideration in, or to

provide all or any portion of the funds utilized to consummate, the transaction

or series of related transactions in contemplation of or pursuant to which such

Subsidiary became a Subsidiary or was acquired by Borrower) and outstanding on

such date;

(c)           any

such encumbrance or restriction consisting of customary non-assignment

provisions in leases or other contracts governing leasehold interests or other

contract rights to the extent such provisions restrict the transfer of the

lease, contract or rights; and

(d)           in

the case of clause (iii) above, restrictions contained in security agreements

securing Indebtedness of a Subsidiary of Borrower to the extent such

restrictions restrict the transfer of the property subject to such security

agreements.

8.7           Sales of Assets and Subsidiary Stock.  Convey, sell, lease or otherwise dispose of

(or agree to do any of the foregoing without the Agent’s prior written consent)

all or any part of the property or assets of a Subsidiary of Borrower with a

value in excess of $1,000,000 unless Borrower or such Subsidiary receives

consideration at the time of such disposition at least equal to the fair market

value, as determined in good faith by the board of directors of such Person

(including a determination as to the value of all noncash consideration), of

the shares and assets subject to such disposition.  The Net Sale Proceeds of any disposition shall be applied in the

manner set forth in Section 4.3.

8.8           Investments. 

Make any Investments except for Permitted Investments.

8.9           Transactions

with Affiliates.  Conduct any

business or enter into any transaction or series of similar transactions

(including the purchase, sale, lease or exchange of any property or the

rendering of any service) with any Affiliate of Borrower or any legal or beneficial

owner of 5% or more of any class of Capital Stock of Borrower or with any

Affiliate of such owner (other than a Wholly-Owned Subsidiary of Borrower or an

employee stock ownership plan for the benefit of Borrower’s or any of its

Subsidiaries’ employees) unless the terms of such business, transaction or

series of transactions are (i) as favorable to Borrower or such Subsidiary as

terms that would be obtainable at the time for a comparable transaction or

series of similar transactions in arm’s–length dealings with an unrelated

third person or, if such transaction is not one which by its nature could be

obtained from such person, is on fair and reasonable terms and (ii) are in the

ordinary course of business or, if not in the ordinary course of business, are

set forth in writing and the board of directors of Borrower or such Subsidiary,

as the case may be, has determined in good faith that such business or

transaction or series of transactions meets the applicable criteria set forth

in clause (i) above.

8.10         Sale-Leasebacks.  Lease any property as lessee in connection

with a Sale and Leaseback Transaction entered into after the Closing Date if,

at the time of such entering into and after giving effect thereto, Attributable

Debt for such Sale and Leaseback Transaction and for all Sale and Leaseback

Transactions so entered into by Borrower and its Subsidiaries from and after

the Closing Date shall exceed $5,000,000.

8.11         Fiscal Year. 

Change the fiscal year of Borrower.

8.12         Amendments to Organizational Documents.  Amend, modify or waive, or permit any

amendment, modification or waiver as to any material provision of its articles

of incorporation, by-laws or other similar governing documents if such

amendment, modification or waiver would adversely affect the interests of Agent

or the Lenders.

8.13         Accounting

Changes.  Make or permit to be

made any change in accounting policies affecting the presentation of financial

statements or reporting practices from those employed by it on the date hereof,

unless (i) such change is required by GAAP, (ii) such change is disclosed to

the Lenders through Agent or otherwise and (iii) relevant prior financial

statements that are affected by such change are restated (in form and detail

reasonably satisfactory to Agent) as may be required by GAAP to show

comparative results.

8.14         Lines of

Business.  Enter into or acquire

any line of business which is not reasonably related to the business engaged in

as of the date hereof.

8.15         Limitation on Voluntary Payments.  Make any voluntary prepayment of, or redeem,

repurchase or defease, any Indebtedness except (i) prepayments of the

Obligations and (ii) mandatory prepayments required pursuant to the instrument

evidencing such Indebtedness or pursuant to which any such Indebtedness was

issued.

ARTICLE

IX

EVENTS OF DEFAULT

9.1           Events of

Default.  If any of the events,

acts, conditions or occurrences (each, an “Event of Default”) hereinafter set

forth shall occur or exist (for any reason whatsoever, and whether such

happening shall be voluntary or involuntary or come about or be effected by

operation of law or pursuant to or in accordance with any judgment, decree or

order of any court or any order, rule or regulation of any administrative or

governmental body):

(a)           Failure to Make Payments When Due.  (i) Borrower shall default in the payment

when due of principal on any Loan in accordance with the terms hereof or any

reimbursement obligation with respect to any Letter of Credit; or (ii) Borrower

shall default in the payment when due of interest on any Loan in accordance

with the terms hereof and such default shall continue for five (5) days after

the date when due; or (iii) Borrower shall default in the payment when due of

any other amount owing hereunder or any other Loan Document and such default

shall continue for ten (10) days after the date when due; or

(b)           Representations.  Any representation or warranty made or deemed to be made by

Borrower or any Credit Party herein or in any document, instrument or

certificate delivered by a Credit Party pursuant hereto shall prove to have

been incorrect or misleading in any material respect on or as of the date made

or deemed made; or

(c)           Breach of Certain Covenants.  Borrower shall fail to perform or comply

with any term or condition contained in Sections 7.1, 7.2, 7.3

or 7.12, Article VIII; or

(d)           Other Defaults Under Agreement

or Loan Documents.  Borrower or

any of its Subsidiaries shall default in the performance or observance of any

term, covenant, condition or agreement contained in this Agreement (other than

as provided in clauses (a), (b) or (c) of this Section 9.1), or any

other Loan Document and such default shall continue unremedied for a period of

30 days after written notice thereof shall have been given to Borrower by Agent

or the Majority Lenders; or

(e)           Default Under Other Agreements.  Borrower or any of its Subsidiaries (i)

shall default in the payment when due (after giving effect to any applicable

grace period), whether at stated maturity or otherwise, of principal or

interest in respect of Indebtedness having an aggregate principal amount of

$5,000,000 or more; or (ii) shall fail to perform or observe any other

condition or covenant, or any other event shall occur or condition exist, under

any agreement or instrument relating to any such Indebtedness having an

aggregate principal amount of $5,000,000, if the effect of any such failure,

event or condition is to cause, or to permit the holder or holders of such

Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a trustee

or agent on behalf of such holder or holders or beneficiary or beneficiaries)

to cause (determined without regard to whether any notice of acceleration or

similar notice is required), such Indebtedness to be declared to be due and

payable prior to its stated maturity, or cash collateral in respect thereof to

be demanded; or

(f)            Judgments. 

One or more judgments or decrees shall be entered against Borrower or

any of its Subsidiaries involving, individually or in the aggregate, a

liability of $7,500,000 or more and all such judgments or decrees shall not

have been vacated, discharged or stayed pending appeal within sixty (60) days

from the entry thereof but in any event prior to the commencement of

enforcement proceedings; or

(g)           Voluntary Insolvency, Etc.  Borrower or any of its Material Subsidiaries

shall become insolvent, generally fail to pay, or state in writing or publicly

its inability or unwillingness to pay, its debts as they become due or call a

meeting of creditors for the purpose of adjusting its debts; or Borrower or any

of its Material Subsidiaries shall become insolvent or shall voluntarily

commence any proceeding or file any petition under any bankruptcy, insolvency

or similar law seeking dissolution or reorganization or the appointment of a

receiver, trustee, custodian or liquidator for it or a substantial portion of

its property, assets or business, or to effect a plan or other arrangement with

its creditors, or shall file any answer admitting the jurisdiction of the court

and the material allegations of an involuntary petition filed against it in any

bankruptcy, insolvency or similar proceeding, or shall be adjudicated bankrupt,

or shall make a general assignment for the benefit of creditors, or shall

consent to, or acquiesce in the appointment of, a receiver, trustee, custodian

or liquidator for a substantial portion of its property, assets or business; or

(h)           Involuntary Insolvency, Etc.  Involuntary proceedings or an involuntary

petition shall be commenced or filed against Borrower or any of its Material

Subsidiaries under any bankruptcy, insolvency or similar law or seeking the

dissolution or reorganization of it or the appointment of a receiver, trustee,

custodian or liquidator for it or of a substantial part of its property, assets

or business, or any writ, judgment, warrant of attachment, execution or similar

process shall be issued or levied against a substantial part of its property,

assets or business, and such proceedings or petition shall not be dismissed, or

such writ, judgment, warrant of attachment, execution or similar process shall

not be released, vacated or fully bonded, within sixty (60) days after

commencement, filing or levy, as the case may be, or any order for relief shall

be entered in any such proceeding; or

(i)            Unenforceability.  This Agreement or any other Loan Document shall cease for any

reason to be in full force and effect (other than by reason of any action by

Agent or any Lender or the satisfaction of all Borrower’s or any of its Subsidiaries’

obligations thereunder) or Borrower or any of its Subsidiaries or any other

Person (other than the Lenders or Agent) shall disavow its obligations under

any provision hereof or thereof, or shall deny that it has any or further

obligations under any provision thereof, or shall contest the validity or

enforceability of any provision thereof; or

(j)            ERISA.

(i)  A Reportable Event or Reportable Events, or a failure to make a

required installment or other payment (within the meaning of Section 412(n)(l)

of the Code), shall have occurred with respect to any Plan or Plans that would

reasonably be expected to result in liability of Borrower to the PBGC or to a

Plan in each case in an aggregate amount exceeding $7,500,000 and the Agent

shall have notified Borrower in writing that (x) the Majority Lenders have made

a determination that, on the basis of such Reportable Event or Reportable

Events or such failure to make a required payment, there are reasonable grounds

(A) for the termination of such Plan or Plans by the PBGC, (B) for the appointment

by the appropriate United States District Court of a trustee to administer such

Plan or Plans or (C) for the imposition of a lien in favor of a Plan and (y) as

a result thereof an Event of Default exists hereunder; or a Termination Event

shall have occurred; or

(ii)           The Borrower or any ERISA Affiliate shall have been

notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal

Liability to such Multiemployer Plan and the amount of the Withdrawal Liability

specified in such notice, when aggregated with all other Withdrawal Liabilities

(determined as of the date or dates of such notification), exceeds $7,500,000;

or

(iii)          Borrower or any ERISA Affiliate shall have been notified by

the sponsor of a Multiemployer Plan that such Multiemployer Plan is in

reorganization or is being terminated, within the meaning of Title IV of ERISA,

if solely as a result of such reorganization or termination the aggregate

annual contributions of Borrower and its ERISA Affiliates to all Multiemployer

Plans that are then in reorganization or have been or are being terminated have

been or will be increased over the amounts required to be contributed to such

Multiemployer Plans for their most recently completed plan years by an amount

exceeding $7,500,000; or

(k)           Change of Control.  A Change of Control shall occur; or

(l)            Environmental Default.  The Borrower or any of its Subsidiaries

shall be the subject of any proceeding or investigation pertaining to the

release by Borrower or any of its Subsidiaries, or any other Person of any

toxic or hazardous waste or substance into the environment, or any violation of

any Environmental Law, which, in either case, would reasonably be expected to

have a Material Adverse Effect; or

(m)          Security Documents.  At any time after the execution and delivery

thereof, any of the Security Documents shall cease to be in full force and

effect in accordance with the terms thereof or shall cease to give Agent for

the benefit of the Lenders the Liens, rights, powers and privileges purported

to be created thereby (including, without limitation, a first priority

perfected security interest (subject to Permitted Liens) in, and Lien on, all

of the Collateral for which Agent or Collateral Agent has taken necessary

actions to perfect its security interest), in favor of Agent, superior to and

prior to the rights of all third Persons and subject to no other Liens (except

to the extent expressly permitted herein or therein); or any Credit Party shall

default in the due performance or observance of any term, covenant or agreement

on its part to be performed or observed pursuant to any of the Security

Documents and such default shall continue beyond any grace period specifically

applicable thereto pursuant to the terms of such Security Document.

THEN, and in any

such event (except an Event of Default specified in paragraph (g) or (h) of

this Section) and at any time thereafter while an Event of Default is

continuing, Agent may with the consent of Majority Lenders, and at the

direction of the Majority Lenders shall, take one or more of the following

actions: (A) declare the Revolving Commitments terminated, whereupon the

Revolving Commitment(s) of each Lender hereunder shall terminate immediately

and all fees and other amounts accrued in accordance with this Agreement shall

forthwith become due and payable without any other notice of any kind; (B)

declare all sums then owing by Borrower hereunder and under the Notes to be

forthwith due and payable, whereupon all such sums shall become and be

immediately due and payable without presentment, demand, protest or notice of

any kind, all of which are hereby expressly waived by Borrower; (C) exercise on

behalf of itself and the Lenders all rights and remedies available to it and

the Lenders under the Loan Documents or applicable law and (D) terminate any

Letter of Credit which may be terminated in accordance with its terms, (iv)

direct Borrower to pay (and Borrower agrees that upon receipt of such notice,

or upon the occurrence of any Event of Default specified in Section 9.1(g)

or Section 9.1(h) with respect to Borrower it will pay) to Agent such

additional amount of cash, to be held as security by Agent, as is equal to the

aggregate Stated Amount of all Letters of Credit issued for the account of

Borrower and its subsidiaries and then outstanding, provided, however,

that if an Event of Default specified in paragraph (g) or (h) of this Section

shall occur, the result which would occur upon the giving of notice by Agent to

Borrower, as specified in clauses (A) or (B) above, shall occur automatically

without the giving of any such notice. 

Promptly following the making of any such declaration, Agent shall give

notice thereof to Borrower and each Lender, but failure to notify any Person

shall not impair the effect of such declaration.

9.2           Rescission

of Acceleration.  Anything in Section

9.1 to the contrary notwithstanding, Agent shall, at the request of the

Majority Lenders, rescind and annul any acceleration of the Notes under this

Agreement by written instrument filed with Borrower; provided, however,

that at the time such acceleration is so rescinded and annulled:

(i)            all

past due interest and principal, if any, on the Notes and all other sums

payable under this Agreement (except any principal and interest on any Notes which

has become due and payable solely by reason of such acceleration) shall have

been duly paid, and

(ii)           no

other Event of Default or Unmatured Event of Default shall have occurred and be

continuing which shall not have been waived in accordance with this Agreement.

9.3           Rights

Not Exclusive.  The rights

provided for in this Agreement and the other Loan Documents are cumulative and

are not exclusive of any other rights, powers, privileges or remedies provided

by law or in equity, or under any other instrument, document or agreement now

existing or hereafter arising.

ARTICLE

X

AGENT

10.1         Appointment

and Authorization.  Each Lender

hereby irrevocably appoints, designates and authorizes BT as Agent (for

purposes of this Article X the term “Agent” shall include BT in its capacity as

Collateral Agent pursuant to the Security Documents) and each holder of any

Note by the acceptance of such Note shall be deemed irrevocably to have

authorized Agent to take such action on its behalf under the provisions of this

Agreement and each other Loan Document and to exercise such powers and perform

such duties as are expressly delegated to it by the terms of this Agreement or

any other Loan Document, together with such powers as are reasonably incidental

thereto (including, without limitation, to give notices and take such actions

on behalf of the Majority Lenders as are consented to in writing by the

Majority Lenders).  Agent may perform

any of its duties hereunder, or under the other Loan Documents, by or through

its agents or employees.

10.2         Nature of

Duties.  Agent shall have no

duties or responsibilities except those expressly set forth in this

Agreement.  The duties of Agent shall be

mechanical and administrative in nature. 

EACH LENDER HEREBY ACKNOWLEDGES AND AGREES THAT AGENT SHALL NOT HAVE, BY

REASON OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, A FIDUCIARY RELATIONSHIP

TO OR IN RESPECT OF ANY LENDER.  Nothing

in any of the Loan Documents, expressed or implied, is intended to or shall be

so construed as to impose upon Agent any obligations in respect of any of the

Loan Documents except as expressly set forth herein or therein.  Each Lender shall make its own independent

investigation of the financial condition and affairs of Borrower in connection

with the making and the continuance of the Loans hereunder and shall make its

own appraisal of the credit worthiness of Borrower, and Agent shall have no

duty or responsibility, either initially or on a continuing basis, to provide

any lender with any credit or other information with respect thereto, whether

coming into its possession before making of the Loans or at any time or times

thereafter.  Agent will promptly notify

each Lender at any time that the Majority Lenders have instructed it to act or

refrain from acting pursuant to Article IX.

10.3         Liability

of Agent.  Agent, its

Affiliates, or any of their respective officers, directors, employees, agents,

affiliates or attorneys–in–fact (collectively, the “Agent–Related

Persons”) shall not (i) be liable to any of the Lenders for any action taken or

omitted to be taken by any of them under or in connection with this Agreement

or any other Loan Document (except for their own gross negligence or willful

misconduct), or (ii) be responsible in any manner to any of the Lenders for any

recital, statement, representation or warranty made by Borrower or Affiliate of

Borrower, or any officer thereof, contained in this Agreement or in any other

Loan Document, or in any certificate, report, statement or other document

referred to or provided for in, or received by Agent, or the Documentation

Agent under or in connection with, this Agreement or any other Loan Document,

or the execution, validity, effectiveness, genuineness, enforceability,

collectibility or sufficiency of this Agreement or any other Loan Document, or

for any failure of Borrower to perform its obligations hereunder or

thereunder.  No Agent–Related

Person shall be under any obligation to any Lender to ascertain or to inquire

as to the observance or performance of any of the terms or provisions contained

in, or conditions of, this Agreement or any other Loan Document, or the

financial condition of Borrower, or the existence or possible existence of any

Unmatured Event of Default or Event of Default unless requested to do so by the

Majority Lenders, or to inspect the properties, books or records of Borrower or

any of its Subsidiaries or Affiliates.

10.4         Reliance by Agent.

(a)           The

Lenders agree that Agent shall be entitled to rely, and shall be fully

protected in relying, upon any writing, resolution, notice, consent,

certificate, affidavit, letter, telegram, facsimile, telex or telephone

message, statement or other document or conversation believed by it to be

genuine and correct and to have been signed, sent or made by the proper Person

or Persons, and upon advice and statements of legal counsel (including counsel

to Borrower), independent accountants and other experts selected by Agent.  Agent may at any time request instructions

from the Lenders with respect to actions or approvals (including the failure to

act or approve) which by the terms of any of the Loan Documents Agent is

permitted or required to take or to grant. 

The Lenders agree that Agent shall be fully justified in failing or refusing

to take any action under this Agreement or any other Loan Document unless it

shall first receive such advice or concurrence of the Majority Lenders as it

deems appropriate and, if it so requests, it shall first be indemnified to its

satisfaction by the Lenders against any and all liability and expense which may

be incurred by it by reason of taking or continuing to take any such

action.  The Lenders agree that Agent

shall in all cases be fully protected in acting, or in refraining from acting,

under this Agreement or any other Loan Document in accordance with a request or

consent of the Majority Lenders and such request or consent and any action

taken or failure to act pursuant thereto shall be binding upon all of the

Lenders.

(b)           For

purposes of determining compliance with the conditions specified in Sections

6.1 and 6.2, each Lender that has executed this Agreement shall be

deemed to have consented to, approved or accepted or to be satisfied with each

document or other matter required thereunder to be consented to or approved by

or acceptable or satisfactory to the Lender, unless an officer of Agent,

responsible for the transactions contemplated by the Loan Documents shall have

received notice from the Lender prior to the initial Borrowing specifying in

reasonable detail its objection thereto and either such objection shall not

have been withdrawn by notice to Agent to that effect, or the Lender shall not

have made available to Agent the Lender’s ratable portion of such Borrowing.

10.5         Notice of

Default.  Agent shall not be

deemed to have knowledge or notice of the occurrence of any Event of Default or

Unmatured Event of Default, except with respect to defaults in the payment of

principal, interest and fees required to be paid to Agent for the account of

the Lenders, unless Agent shall have received written notice from a Lender or

Borrower referring to this Agreement, describing such Event or Default or

Unmatured Event of Default and stating that such notice is a “notice of

default”.  In the event that Agent

receives such a notice, Agent shall give notice thereof to the Lenders.  Agent shall take such action with respect to

such Event of Default or Unmatured Event of Default as shall be requested by

the Majority Lenders in accordance with Article IX; provided, however,

that unless and until Agent shall have received any such request, Agent may

(but shall not be obligated to) take such action, or refrain from taking such

action, with respect to such Event of Default or Unmatured Event of Default as

it shall deem advisable or in the best interest of the Lenders.

10.6         Credit

Decision.  Each Lender expressly

acknowledges that none of the Agent–Related Persons has made any

representation or warranty to it and that no act by any Agent, hereinafter

taken, including any review of the affairs of Borrower and its Subsidiaries

shall be deemed to constitute any representation or warranty by such Agent to

any Lender.  Each Lender represents to

Agent that it has, independently and without reliance upon Agent and based on such

documents and information as it has deemed appropriate, made its own appraisal

of and investigation into the business, prospects, operations, property,

financial and other condition and creditworthiness of Borrower and its

Subsidiaries, and all applicable bank regulatory laws relating to the transactions

contemplated thereby, and made its own decision to enter into this Agreement

and extend credit to Borrower hereunder. 

Each Lender also represents that it will, independently and without

reliance upon Agent, and based on such documents and information as it shall

deem appropriate at the time, continue to make its own credit analysis,

appraisals and decisions in taking or not taking action under this Agreement

and the other Loan Documents, and to make such investigations as it deems

necessary to inform itself as to the business, prospects, operations, property,

financial and other condition and creditworthiness of Borrower or its

Subsidiaries.  Except for notices,

reports and other documents expressly herein required to be furnished to the

Lenders by Agent, Agent shall not have any duty or responsibility to provide

any Lender with any credit or other information concerning the business,

prospects, operations, property, financial and other condition or

creditworthiness of Borrower which may come into the possession of any of the

Agent–Related Persons.

10.7         Indemnification.  The Lenders shall indemnify upon demand the

Agent–Related Persons (to the extent not reimbursed by or on behalf of

Borrower and without limiting the obligation of Borrower to do so), ratably

according to each Lender’s Commitment Percentage from and against any and all

liabilities, obligations, losses, damages, claims, penalties, actions,

judgments, suits, costs, and reasonable expenses and disbursements of any kind

whatsoever which may at any time (including at any time following the repayment

of the Loans) be imposed on, incurred by or asserted against any such Person

any way relating to or arising out of this Agreement or any document

contemplated by or referred to herein or therein or the transactions

contemplated hereby or thereby or any action taken or omitted by any such

Person under or in connection with any of the foregoing; provided, however,

that no Lender shall be liable for the payment to the Agent–Related

Persons of any portion of such liabilities, obligations, losses, damages,

claims, penalties, actions, judgments, suits, costs, expenses or disbursements

resulting from such Person’s gross negligence or willful misconduct.  Without limitation of the foregoing, each

Lender shall reimburse Agent upon demand for its ratable share of any

reasonable costs or out–of–pocket expenses (including Attorney

Costs) incurred by Agent in connection with the preparation, execution,

delivery, administration, modification, amendment or enforcement (whether

through negotiations, legal proceedings or otherwise) of, or legal advice in

respect of rights or responsibilities under, this Agreement, any other Loan

Document, or any document contemplated by or referred to herein to the extent

that Agent is not reimbursed for such expenses by or on behalf of

Borrower.  Without limiting the

generality of the foregoing, if the IRS or any authority of the U.S. or other

jurisdiction asserts a claim that Agent did not properly withhold tax from

amounts paid to or for the account of any Lender (because the appropriate form

was not delivered, was not properly executed, or because such Lender failed to

notify Agent of a change in circumstances which rendered the exemption from, or

reduction of, withholding tax ineffective, or for any other reason) such Lender

shall indemnify Agent fully for all amounts paid, directly or indirectly, by

Agent as tax or otherwise, including penalties and interest, and including any

taxes imposed by any jurisdiction on the amounts payable to Agent under this Section

10.7, together with all Attorney Costs. 

The obligation of the Lenders in this Section 10.7 shall survive

the payment of all Obligations hereunder and termination of the Agreement.

10.8         Agent

in Individual Capacity.  Agent

and its Affiliates may make loans to, issue letters of credit for the account

of, accept deposits from, acquire equity interests in and generally engage in

any kind of banking, trust, financial advisory or other business with Borrower

and its Subsidiaries and Affiliates as though Agent were not Agent hereunder

and without notice to the Lenders.  With

respect to its Loans, Agent shall have the same rights and powers under this

Agreement as any other Lender and may exercise the same as though it were not Agent

hereunder or under any other Loan Document, including, without limitation, the

acceptance of fees or other consideration for services without having to

account for the same to any of the Lenders. 

The terms “Lender” and “Lenders” shall include BT in its individual

capacity.

10.9         Resignation by Agent.

(a)           Agent

may resign from the performance of all its functions and duties hereunder at

any time by giving fifteen (15) Business Days’ prior written notice to Borrower

and the Lenders.  Such resignation shall

take effect upon the acceptance by a successor Agent of appointment pursuant to

clauses (b) and (c) below or as otherwise provided below.

(b)           Upon

any such notice of resignation, the Majority Lenders shall appoint a successor

Agent who shall (unless an Event of Default has occurred and is continuing) be

satisfactory to Borrower and shall be an incorporated bank or trust company.

(c)           If

a successor Agent shall not have been so appointed within said 15 Business Day

period, Agent, with the consent of Borrower, shall then appoint a successor

Agent who shall serve as Agent until such time, if any, as the Majority

Lenders, with the consent of Borrower, appoint a successor Agent as provided

above.

(d)           If

no successor Agent has been appointed pursuant to clause (b) or (c) by the 20th

Business Day after the date such notice of resignation was given by Agent,

Agent’s resignation shall become effective and the Majority Lenders shall

thereafter perform all the duties of Agent hereunder until such time, if any,

as the Majority Lenders, with the consent of Borrower, appoint a successor

Agent as provided above.

(e)           Upon

the effective date of such resignation, only such successor Agent shall succeed

to all the rights, powers and duties of the retiring Agent and the term “Agent”

shall mean such successor agent and the retiring Agent’s rights, powers and

duties in such capacity shall be terminated. 

After any retiring Agent resigns hereunder as Agent the provisions of

this Article X and Section 11.4 shall inure to their respective benefit

as to any actions taken or omitted to be taken by it while it was Agent under

this Agreement; except with respect to indemnification provisions under this

Agreement which shall survive as to such resigning Agent.

10.10       Documentation

Agent.  The designation of Bank

One, NA as Documentation Agent shall not impose upon it any obligation or

liability to the Borrower or any Lender.

ARTICLE

XI

MISCELLANEOUS

11.1         No Waiver; Modifications in Writing.  (a) No failure or delay

on the part of Agent or any Lender in exercising any right, power or remedy

under this Agreement shall operate as a waiver thereof, nor shall any single or

partial exercise of any such right, power or remedy preclude any other or

further exercise thereof or the exercise of any other right, power or

remedy.  The remedies provided for in

this Agreement are cumulative and are not exclusive of any remedies that may be

available to Agent or any Lender at law or in equity or otherwise.  No amendment, modification, supplement,

termination or waiver of or to any provision of this Agreement or any Note, nor

consent to any departure by Borrower therefrom, shall be effective unless the

same shall be consented to by or on behalf of Borrower and the Majority

Lenders; provided, however, that the consent of each Lender

(other than a Defaulting Lender) affected thereby shall be required to effect

any amendment, modification, supplement, termination, waiver or consent, as the

case may be (any of the foregoing, a “Modification”), which has the effect of

(i)            reducing the aggregate principal

amount of, or interest rate on, any of the Revolving Notes or Term Notes or

releasing any Subsidiary Guarantor (other than as a result of a transaction

permitted by Section 8.4 or an Asset Disposition made in accordance with

the terms of this Agreement) or reducing the aggregate amount of any fees

provided for in this Agreement, except that any Modification that has the

effect of reducing the aggregate amount of any fees payable to Agent for its

own account shall require only the consent of Agent;

(ii)           extending the stated final maturity

of any of the Revolving Commitments, Term Loans or the Notes or the date of any

portion of any payment of principal of, or interest or fees in respect of, any

of the Revolving Commitments, Term Loans or the Notes (other than by way of (a)

Modification of any provision for, or having the effect of requiring, any

mandatory prepayment of any portion of any Loan, or (b) Modification or waiver

of any Event of Default (other than an Event of Default described in Section

9.1(a)(i), 9.1(g) or 9.1(h)) or Unmatured Event of Default);

or

(iii)         changing this proviso or the

first sentence of Section 11.9(a), reducing the percentage specified in

the definition of the term “Majority Lenders”, or (except in connection with a

permitted assignment by any Lender under this Agreement) the definition of the

terms “Revolving Commitment”, "Term Loans" or “Commitment Percentage”

(it being understood with respect to all of the foregoing that, with the

consent of the Majority Lenders, additional extensions of credit pursuant to

this Agreement may be included in the determination of the Majority Lenders on

substantially the same basis as the extensions of Revolving Commitments are

included in such determination on the date hereof);

(iv)          releasing any of the Pledged Stock

(except as expressly provided in the applicable Security Documents) under all

of the Security Documents; or

(v)          releasing any of the Collateral

(except as expressly provided in Section 11.20(b));

provided, further, that the consent of

Agent shall be required to effect any Modification that has the effect of (x)

increasing the duties or obligations of Agent, (y) increasing the standard of

care or performance required on the part of Agent, or (z) reducing or

eliminating the indemnities, exculpations or immunities to which Agent is

entitled.

Any Modification

of or to any provision of this Agreement shall be effective only in the

specific instance and for the specific purpose for which made or given and only

if in writing.  Except where notice is

specifically required by this Agreement, no notice to or demand on Borrower or

any other Person in any case shall entitle Borrower or such other Person to any

other or further notice or demand in similar or other circumstances.

 (b)  If, in connection with any proposed

amendment, change, supplement, waiver, discharge or termination of any of the

provisions of this Agreement as contemplated by clauses (a)(i) through (v),

inclusive, of the first proviso to the third sentence of Section 11.1(a),

the consent of the Majority Lenders is obtained but the consent of one or more

of such other Lenders whose consent is required is not obtained, then Borrower

shall have the right, so long as all non–consenting Lenders whose individual

consent is required are treated as described in either clauses (A) or (B)

below, to either (A) replace each such non–consenting Lender or Lenders

(or, at the option of the Borrower if the respective Lender’s consent is

required with respect to less than all Loans, to replace only the respective

Loans of the respective non-consenting Lender which gave rise to the need to

obtain such Lender’s individual consent) with one or more Replacement Lenders

pursuant to Section 3.7 so long as at the time of such replacement, each

such Replacement Lender consents to the proposed amendment, modification,

supplement, waiver, discharge, termination or other change or (B) terminate

such non–consenting Lender’s Revolving Commitment and repay all

outstanding Loans of such Lender which gave rise to the need to obtain such

Lender’s consent, in accordance with Section 4.l(b) and/or 4.2;

provided that, unless the Revolving Commitment is terminated and Loans

repaid pursuant to the preceding clause (B) are immediately replaced in full at

such time through the addition of new Lenders or the increase of the

Commitments and/or outstanding Loans of existing Lenders (who in each case must

specifically consent thereto), then in the case of any action pursuant to

preceding clause (B) the Majority Lenders (determined before giving effect to

the proposed action) shall specifically consent thereto, provided, further,

that in any event Borrower shall not have the right to replace a Lender,

terminate its Revolving Commitment or repay its Loans solely as a result of the

exercise of such Lender’s rights (and the withholding of any required consent

by such Lender) contemplated by the second proviso to the third sentence of Section

11.1(a).

11.2         Intentionally omitted.

11.3         Notices, Etc.  Except where telephonic instructions or

notices are authorized herein to be given, all notices, demands, instructions

and other communications required or permitted to be given to or made upon any

party hereto or any other Person shall be in writing and shall be personally

delivered or sent by registered or certified mail, postage prepaid, return

receipt requested, or by a reputable courier delivery service, or by prepaid

telex, TWX or telegram (with messenger delivery specified in the case of a

telegram), or by telecopier, and shall be deemed to be given for purposes of

this Agreement on the day received if deposited in registered or certified

mail, postage prepaid, and otherwise on the day that such writing is delivered

or sent to the intended recipient thereof, or in the case of notice delivered

by telecopy, upon completion of transmission with a copy of such notice also

being delivered under any of the methods provided above, all in accordance with

the provisions of this Section provided that any notice, request or demand to

or upon any Agent or the Lenders pursuant to Sections 2.1, 2.2, 3.4

or 4.1 shall not be effective until received.  Unless otherwise specified in a notice sent or delivered in

accordance with the foregoing provisions of this Section, notices, demands,

instructions and other communications in writing shall be given to or made upon

the respective parties hereto at their respective addresses (or to their

respective telex, TWX or telecopier numbers) indicated on Schedule 11.3

hereto or in any applicable Assignment and Assumption Agreement and, in the

case of telephonic instructions or notices, by calling the telephone number or

numbers indicated for such party on Schedule 11.3 hereto or in any

applicable Assignment and Assumption Agreement (in each case as such may be

modified from time to time by notice hereunder).

11.4         Costs,

Expenses and Taxes; Indemnity.

(a)           Generally. 

Borrower agrees (without duplication) to pay promptly upon written

request by Agent, which shall include reasonable detail (i) all reasonable

costs and expenses in connection with the negotiation, preparation, printing,

typing, reproduction, execution and delivery of this Agreement and the other

Loan Documents and the documents and instruments referred to herein and therein

and any amendment, waiver, consent relating hereto or thereto or other

modifications of (or supplements to) any of the foregoing and any and all other

documents and instruments furnished pursuant hereto or thereto or in connection

herewith or therewith, including without limitation, the reasonable fees and

out-of-pocket expenses of Winston & Strawn, special counsel to Agent, and

any local counsel retained by Agent relative thereto, other Attorney Costs,

independent public accountants and other outside experts retained by Agent in

connection with the administration of this Agreement and the other Loan

Documents, and (ii) all reasonable costs and expenses (including, without

limitation, Attorney Costs), if any, paid by Agent or any Lender in connection

with the enforcement of this Agreement, any of the Loan Documents or any other

agreement furnished by Borrower or any of its Subsidiaries pursuant hereto or

thereto or in connection herewith or therewith.  In addition, Borrower shall pay any and all present and future

stamp, transfer excise and other similar taxes payable or determined to be

payable in connection with the execution and delivery of this Agreement, any

Loan Document, or the making of any Loan, and each agrees to save and hold

Agent and each Lender harmless from and against any and all liabilities with

respect to or resulting from any delay by Borrower in paying, or omission by

Borrower to pay, such taxes.  Any

portion of the foregoing fees,  costs

and expenses which remains unpaid more than thirty (30) days following Agent’s

or any Lender’s statement and request for payment thereof shall bear interest

from the date of such statement and request to the date of payment at the

Default Rate.

(b)           Indemnification.  Borrower will indemnify and hold harmless Agent and each Lender

and each director, officer, employee, agent and Affiliate of each Agent and

each Lender (collectively, the “Indemnified Persons”) from and against all

losses, claims, damages, penalties, causes of action, obligations, costs,

expenses or liabilities (including, without limitation, Attorney Costs and

reasonable expenses, consultant fees and investigation fees) (collectively,

“Expenses”) to which such Indemnified Person shall become subject, insofar as

such Expenses (or actions, suits or proceedings, including, without limitation,

any inquiry or investigation or claim in respect thereof, whether or not any

Indemnified Person is named as a party) arise out of, in any way relate to, or

result from the transactions contemplated by this Agreement and to reimburse

each Indemnified Person upon its written demand showing reasonable detail, for

any legal or other expenses incurred in connection with investigating,

preparing to defend or defending any such loss, claim, damage, liability,

action or claim; provided, however, that Borrower shall have no

obligation to an Indemnified Person hereunder with respect to indemnified

liabilities arising from the gross negligence or willful misconduct of any such

Indemnified Person or for any loss, claim, damage, liability, action or claim

incurred by any Lender hereunder resulting solely from the gross negligence or

willful misconduct of another Lender; and provided, further, however,

that no Indemnified Person may settle any such action, suit or proceeding

without the consent of Borrower which consent shall not be unreasonably

withheld or delayed.  If an action, suit

or proceeding arising from any of the foregoing is brought against any

Indemnified Person, Borrower shall, if requested by such Indemnified Person, resist

and defend at its own expense such action, suit or proceeding or cause the same

to be resisted and defended by counsel reasonably satisfactory to such

Indemnified Person.  Each Indemnified

Person shall have the right to employ its own counsel to investigate and

control the defense of any matter covered by such indemnity and the reasonable

fees and expenses of such counsel shall be at the expense of the indemnifying

party, provided, however, that in any one action or separate but

similar or related actions in the same jurisdiction arising out of the same

general allegations or circumstances, Borrower shall not be liable for fees and

expenses of more than one counsel (in addition to any local counsel), which

counsel shall be designated by the Agent provided, further, however,

each Indemnified Person shall have the right to employ separate counsel in any

such inquiry, action, claim or proceeding and to control the defense thereof,

and the reasonable fees and expenses of such counsel shall be at the expense of

the Borrower if (i) Borrower shall have agreed in writing to pay such fees and

expenses or (ii) such Indemnified Person shall have notified Borrower that

it has been advised by counsel that there may be one or more legal defenses

available to such Indemnified Person that are different from or additional to

those available to the other Indemnified Persons and that such common

representation would adversely impact the adequacy of the proposed

representation.  If Borrower shall fail

to do, or cause to be done, any act or thing which it has covenanted to do or

cause to be done under this Agreement or any representation or warranty on the

part of Borrower contained in any Loan Document shall be breached, Agent may

(but shall not be obligated to) do the same or cause it to be done or remedy

any such breach, and may expend its own funds for such purpose, and will use

its best efforts to give prompt written notice to Borrower that it proposes to

take such action; provided, however, that any failure by Agent to

do any such act or thing or give any such notice shall not relieve Borrower of

any such obligations and shall not impose or result in the imposition of any

liability on Agent or any Lender.  Any

and all amounts so expended by Agent shall be due and payable by Borrower

promptly upon Agent’s written demand therefor, together with interest thereon

at a rate per annum equal to the Default Rate during the period from and

including the date so demanded by Agent to the date of repayment.  To the extent that the undertaking to

indemnify, pay or hold harmless Agent or Lender as set forth in this Section

11.4 may be unenforceable because it is violative of any law or public

policy, Borrower shall make the maximum contribution to the payment and

satisfaction of each of the indemnified liabilities which is permissible under

applicable law.

(c)           If

any sum due from Borrower under this Agreement or any order or judgment given

or made in relation hereto has to be converted from the currency (the “first

currency”) in which the same is payable hereunder or under such order or

judgment into another currency (the “second currency”) for the purpose

of (i) making or filing a claim or proof against Borrower with any Governmental

Authority or in any court or tribunal, or (ii) enforcing any order or judgment

given or made in relation hereto, Borrower shall indemnify and hold harmless

each of the Persons to whom such sum is due from and against any loss actually

suffered as a result of any discrepancy between (a) the rate of exchange used

to convert the amount in question from the first currency into the second

currency, and (b) the rate or rates of exchange at which such Person, acting in

good faith in a commercially reasonable and prompt manner, purchased the first

currency with the second currency after receipt of a sum paid to it in the

second currency in satisfaction, in whole or in part, of any such order,

judgment, claim or proof.  The foregoing

indemnity shall constitute a separate obligation of Borrower distinct from its

other obligations hereunder and shall survive the giving or making of any

judgment or order in relation to all or any of such other obligations.

(d)           The

obligations of Borrower under this Section and the other indemnification

obligations of the Borrower under this Agreement shall be effective and binding

on Borrower irrespective of whether any Loans are made and shall survive (i)

the termination of this Agreement and the discharge of Borrower’s other

obligations hereunder and under the Notes and (ii) the assignment by any Lender

of any of its interests herein pursuant to Section 11.9(c) with respect

to any acts, omissions and/or events occurring or arising prior to the

Effective Date of such assignment.

(e)           Nothing

contained in this Section shall be deemed to limit or reduce any indemnity in

favor of any Agent or any Lender contained in any other Loan Document or

agreement.

11.5         Confirmations.  Each of Borrower and each holder of a Note

agrees, from time to time, upon written request received by it from the other,

to confirm to the other in writing (with a copy of each such confirmation to

Agent) the aggregate unpaid principal amount of the Loans then outstanding

under such Note.

11.6         Transfer of

Notes.  In the event that the

holder of any Note (including any Lender) shall transfer such Note, it shall

immediately advise Agent and Borrower of such transfer, and Agent and Borrower

shall be entitled conclusively to assume that no transfer of any Note has been

made by any holder (including any Lender) unless and until Agent and Borrower

shall have received written notice to the contrary.  Each transferee of any Note shall take such Note subject to the

provisions of this Agreement and to any Modification or other action taken

under this Agreement prior to the receipt by Agent and Borrower of written

notice of such transfer by each previous holder of such Note and, except as

expressly otherwise provided in such notice, Agent and Borrower shall be

entitled conclusively to assume that the transferee named in such notice shall

thereafter be vested with all rights and powers under this Agreement with

respect to the Loans of the Lender named as the payee of the Note which is the

subject of such transfer.

11.7         Adjustments; Setoff.

(a)           If,

other than as expressly set forth elsewhere herein, any Lender shall obtain on

account of the Committed Loans made by it any payment (whether voluntary,

involuntary, through the exercise of any right of setoff, or otherwise) in

excess of its Commitment Percentage of payments on account of the Committed

Loans obtained by all the Lenders, such Lender shall forthwith (x) notify Agent

of such fact, and (y) purchase from the other Lenders such participations in

the Committed Loans made by them as shall be necessary to cause such purchasing

Lender to share the excess payment ratably with each of them; provided, however,

that if all or any portion of such excess payment is thereafter recovered from

the purchasing Lender, such purchase shall to that extent be rescinded and each

other Lender shall repay to the purchasing Lender the purchase price paid

thereto together with an amount equal to such paying Lender’s Commitment

Percentage (according to the proportion of (i) the amount of such paying

Lender’s required repayment to (ii) the total amount so recovered from the

purchasing Lender, of any interest or other amount paid or payable by the

purchasing Lender in respect of the total amount so recovered.  Agent will keep records (which shall be

conclusive and binding in the absence of demonstrable error), of participations

purchased pursuant to this Section 11.7 and will in each case promptly

notify the Lenders and Borrower following any such purchases.  Any payments received after the Lenders have

taken action pursuant to this Section 11.7 shall be allocated ratably

among the Revolving Loans and the Swing Line Loans of all the Lenders.

(b)           Borrower

agrees that any Lender so purchasing a participation from another Lender

pursuant to this Section 11.7 may, to the fullest extent permitted by

law, exercise all its rights of payment (including the right of setoff, but

subject to Section 11.7(d)) with respect to such participation as fully

as if such Lender were the direct creditor of Borrower in the amount of such

participation.

(c)           Nothing

herein shall require any Lender to exercise any right of setoff or similar

rights or shall affect the right of any Lender to exercise, and retain the

benefits of exercising, any such right with respect to any other Indebtedness

or obligation of Borrower.

(d)           In

addition to any rights and remedies of the Lenders provided by law, each Lender

shall have the right, without prior notice to Borrower or any other Person, any

such notice being expressly waived by Borrower, upon the occurrence of an Event

of Default to setoff and apply against any Obligations any and all deposits

(general or special, time or demand, provisional or final), in any currency,

and any other credits, indebtedness or claims, in any currency, in each case

whether direct or indirect, absolute or contingent, whether matured or

unmatured, of Borrower to such Lender, any amount owing from such Lender or any

branch or agency thereof to or for the credit or account of Borrower, at or at

any time after, the happening of  any of

the above-mentioned events, and the aforesaid right of setoff may be exercised

by such Lender against Borrower or against any trustee in bankruptcy, debtor in

possession, assignee for the benefit of creditors, receivers, or execution,

judgment or attachment creditor of Borrower, or against anyone else claiming

through or against, Borrower or such trustee in bankruptcy, debtor in

possession, assignee for the benefit of creditors, receivers, or execution,

judgment or attachment creditor, notwithstanding the fact that such right of

setoff shall not have been exercised by such Lender prior to the making, filing

or issuance, or service upon such Lender of, or of notice of, any such

petition, assignment for the benefit of creditors, appointment or application

for the appointment of a receiver, or issuance of execution, subpoena, order or

warrant.  Each Lender agrees promptly to

notify Borrower and Agent after any such setoff and application made by such

Lender; provided, however, that the failure to give such notice

shall not affect the validity of such setoff and application.

(e)           Borrower

expressly agrees that to the extent Borrower makes a payment or payments and

such payment or payments, or any part thereof, are subsequently invalidated,

declared to be fraudulent or preferential, set aside or are required to be repaid

to a trustee, receiver, or any other party under any bankruptcy act, state or

federal law, common law or equitable cause, then to the extent of such payment

or repayment, the Indebtedness to the Lenders or part thereof intended to be

satisfied shall be revived and continued in full force and effect as if said

payment or payments had not been made.

11.8         Execution

in Counterparts.  This Agreement

may be executed in any number of counterparts and by the different parties

hereto on separate counterparts, each of which counterparts, when so executed

and delivered, shall be deemed to be an original and all of which counterparts,

taken together, shall constitute but one and the same Agreement and it shall

not be necessary in making proof of this Agreement to produce more than one

such counterpart or counterparts bearing the signatures of all of the parties

thereto.

11.9         Binding Effect; Assignment;

Addition and Substitution of Lenders.

(a)           This

Agreement shall be binding upon, and inure to the benefit of, Borrower, Agent,

the Lenders, all future holders of the Notes and their respective successors

and assigns; provided, however, that Borrower may not assign its

rights or obligations hereunder or in connection herewith or any interest

herein (voluntarily, by operation of law or otherwise) without the prior

written consent of Agent and all of the Lenders.

(b)           Each

Lender may at any time sell to one or more banks or other entities (“Participants”)

participating interests in all or any portion of its Revolving Commitment and

Loans or participation in Letters of Credit or any other interest of such

Lender hereunder (in respect of any Lender, its “Credit Exposure”).  In the event of any such sale by a Lender of

participating interests to a Participant, such Lender’s obligations under this

Agreement shall remain unchanged, such Lender shall remain solely responsible

for the performance thereof, and Borrower and Agent shall continue to deal

solely and directly with such Lender in connection with such Lender’s rights

and obligations under this Agreement. 

Borrower agrees that if amounts outstanding under this Agreement or any

of the Loan Documents are due or unpaid, or shall have been declared or shall

have become due and payable upon the occurrence of an Event of Default, each

Participant shall be deemed to have the right of setoff in respect of its

participating interest in amounts owing under this Agreement and the Loan

Documents to the same extent as if the amount of its participating interest

were owing directly to it as a Lender under this Agreement or any other Loan

Document, provided, however, 

that such right of setoff shall be subject to the obligation of such

Participant to share with the Lenders, and the Lenders agree to share with such

Participant, as provided in Section 11.7.  Borrower also agrees that each Participant shall be entitled to

the benefits of Sections 3.5, 3.6 and 4.6 with respect to

its participation in the Loans outstanding from time to time.  Each Lender agrees that any agreement

between such Lender and any such Participant in respect of such participating

interest shall not restrict such Lender’s right to approve or agree to any

amendment, change, supplement waiver of, discharge or termination to any of the

provisions of this Agreement or any of the Loan Documents except to the extent

that any of the forgoing would (i) extend the final scheduled maturity of any

Loan or Note in which such Participant is participating beyond the Termination

Date, or reduce the rate or extend the time of payment of interest or fees on

any such Loan or Note (except in connection with a waiver of applicability of

any post–default increase in interest rates) or reduce the principal

amount thereof, or increase the amount of the participant’s participation over

the amount thereof then in effect (it being understood that waivers or

modifications of conditions precedent, covenants, Events of Default or

Unmatured Events of Default or of a mandatory reduction in Commitments shall

not constitute a change in the terms of such participation, and that an

increase in any Revolving Commitment or Loan shall be permitted without the

consent of any Participant if the Participant’s participation is not increased

as a result thereof), (ii) consent to the assignment or transfer by Borrower of

any of its rights and obligations under this Agreement or (iii) release all or

substantially all of the Collateral under all of the Security Documents (except

as expressly provided in the Loan Documents) supporting the Loans and/or

Letters of Credit hereunder in which such Participant is participating.

(c)           Any

Lender may at any time assign to one or more Eligible Assignees, including an

Affiliate thereof (each an “Assignee”), all or any part of its Credit

Exposure pursuant to an Assignment and Assumption Agreement, provided

that (i) it assigns its Credit Exposure in an amount not less than

$5,000,000 (or if less the entire amount of Lender’s Credit Exposure) and

(ii) any assignment of all or any portion of any Lender’s Credit Exposure to an

Assignee other than another Lender shall require the prior written consent of

Agent and, so long as no Unmatured Event of Default or Event of Default has

occurred and is continuing, Borrower (the consent of Borrower and Agent not to

be unreasonably withheld or delayed), and provided further, that

notwithstanding the foregoing limitations, any Lender may at any time assign

all or any part of its Credit Exposure to any Affiliate of such Lender or to

any other Lender.  Upon execution of an

Assignment and Assumption Agreement and the payment of a nonrefundable

assignment fee of $3,500 in immediately available funds to Agent at its Payment

Office in connection with each such assignment, written notice thereof by such

transferor Lender to Agent and the recording by Agent of such assignment and

the resulting effect upon the Loans and Revolving Commitment of the assigning

Lender and the Assignee, the Assignee shall have, to the extent of such

assignment, the same rights and benefits as it would have if it were a Lender

hereunder and the holder of the Obligations (provided that Borrower and Agent

shall be entitled to continue to deal solely and directly with the assignor

Lender in connection with the interests so assigned to the Assignee until

written notice of such assignment, together with payment instructions,

addresses and related information with respect to the Assignee, shall have been

given to Borrower and Agent by the assignor Lender and the Assignee) and, if

the Assignee has expressly assumed, for the benefit of Borrower, some or all of

the transferor Lender’s obligations hereunder, such transferor Lender shall be

relieved of its obligations hereunder to the extent of such assignment and

assumption, and except as described above, no further consent or action by

Borrower, the Lenders or Agent shall be required.  At the time of each assignment pursuant to this Section

11.9(c) to a Person which is not already a Lender hereunder and which is

not a United States person (as such term is defined in Section 7701(a)(30)

of the Code) United States Federal income tax purposes, the respective Assignee

shall provide to Borrower and Agent the appropriate IRS Forms (and, if

applicable a Section 4.6(d)(ii) Certificate) described in Section

4.6(d).  Each Assignee shall take

such Credit Exposure subject to the provisions of this Agreement and to any

request made, waiver or consent given or other action taken hereunder, prior to

the receipt by Agent and Borrower of written notice of such transfer, by each

previous holder of such Credit Exposure. 

Such Assignment and Assumption Agreement shall be deemed to amend this

Agreement and Schedule 1.1(a) hereto, to  the extent, and only to the extent, necessary to reflect the

addition of such Assignee as a Lender and the resulting adjustment of all or a

portion of the rights and obligations of such transferor Lender under this

Agreement, the Revolving Commitment, the determination of its Commitment

Percentage (rounded to twelve decimal places), the Loans and any new Notes to

be issued, at Borrower’s expense, to 

such Assignee, and no further consent or action by Borrower or the

Lenders shall be required to effect such amendments.

(d)           Borrower

authorizes each Lender to disclose to any Participant or Assignee (each, a “Transferee”)

and any prospective Transferee any and all financial information in such

Lender’s possession concerning Borrower and any Subsidiary of Borrower which

has been delivered to such Lender by Borrower pursuant to this Agreement or

which has been delivered to such Lender by Borrower in connection with such

Lender’s credit evaluation of Borrower prior to entering into this Agreement; provided

that such Transferee or prospective Transferee agrees in writing to treat any

such information which is not public as confidential.

(e)           Notwithstanding

any other provision set forth in this Agreement, any Lender may at any time

pledge or assign all or any portion of its rights under this Agreement and the

other Loan Documents (including, without limitation, the Notes held by it) to

any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve

Board without notice to, or the consent of, Borrower.  No such pledge or assignment shall release the transferor Lender

from its obligations hereunder.

11.10       CONSENT TO JURISDICTION;

MUTUAL WAIVER OR JURY TRIAL.

(A)          ANY LEGAL ACTION OR PROCEEDING WITH

RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE

COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN

DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH

PARTY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,

GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  EACH PARTY HEREBY IRREVOCABLY DESIGNATES,

APPOINTS AND EMPOWERS CT CORPORATION SYSTEM WITH OFFICES ON THE DATE HEREOF AT

1633 BROADWAY, NEW YORK, NEW YORK 10019 AS ITS DESIGNEE, APPOINTEE AND AGENT TO

RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS

PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS

WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING.  IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE

TO BE AVAILABLE TO ACT AS SUCH, THEN SUCH PARTY SHALL DESIGNATE A NEW DESIGNEE,

APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS

PROVISION SATISFACTORY TO AGENT UNDER THIS AGREEMENT.  EACH PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS

OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE

MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO

SUCH PARTY, AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW.   NOTHING HEREIN SHALL AFFECT THE RIGHT OF

ANY PARTY UNDER THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED

BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY

IN ANY OTHER JURISDICTION.

(B)          EACH PARTY

HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO

THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT

OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT IN

THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY

WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION

OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT

FORUM.

(C)          EACH OF THE

PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO

TRIAL BY JURY IN ANY COURT OR JURISDICTION, INCLUDING WITHOUT LIMITATION THOSE

REFERRED TO IN CLAUSE (A) ABOVE, IN RESPECT TO ANY MATTER ARISING OUT OF OR

RELATING TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS

CONTEMPLATED HEREBY OR THEREBY.

11.11       Governing Law.  THIS AGREEMENT AND EACH NOTE SHALL BE DEEMED

TO BE A CONTRACT MADE UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK, AND FOR

ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH

SUCH LAWS OF SAID STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

11.12       Registry.  Borrower hereby designates Agent to serve as

Borrower’s agent, solely for purposes of this Section 11.12 to maintain

a register (the “Register”) on which it will record the Commitment from

time to time of each of the Lenders, the Loans made by each of the Lenders and

each repayment in respect of the principal amount of the Loans of each

Lender.  Failure to make any such

recordation, or any error in such recordation shall not affect Borrower’s

obligations in respect of such Loans. 

With respect to any Lender, the transfer of the Commitments of such

Lender and the rights to the principal of, and interest on, any Loan made

pursuant to such Commitment shall not be effective until such transfer is

recorded on the Register maintained by Agent with respect to ownership of such Commitment

and Loans and prior to such recordation all amounts owing to the transferor

with respect to such Commitments and Loans shall remain owing to the

transferor.  The registration of

assignment or transfer of all or part of any Commitment and Loans shall be

recorded by Agent on the Register only upon the acceptance by Agent of a

properly executed and delivered Assignment and Assumption Agreement pursuant to

Section 11.9.  Coincident with

the delivery of such an Assignment and Assumption Agreement to Agent for

acceptance and registration of assignment or transfer of all or part of a Loan,

or as soon thereafter as practicable, the assigning or transferor Lender shall

surrender the Note evidencing such Loan, and thereupon one or more new Notes in

the same aggregate principal amount then owing to such assignor or transferor

Lender shall be issued to the assigning or transferor Lender and/or the new

Lender. Borrower agrees to indemnify Agent from and against any and all losses,

claims, damages and liabilities of whatsoever nature which may be imposed on,

asserted against or incurred by Agent in performing its duties under this Section 11.12

except for those resulting solely from Agent’s willful misconduct and/or gross

negligence in the performance of such duties.

11.13       Severability

of Provisions.  Any provision of

this Agreement that is prohibited or unenforceable in any jurisdiction shall,

as to such jurisdiction, be ineffective to the extent of such prohibition or

unenforceability without invalidating the remaining provisions hereof or

affecting the validity or enforceability of such provision in any other

jurisdiction.

11.14       Headings.  The Table of Contents and article and

section headings used in this Agreement are for convenience of reference only

and shall not affect the construction of this Agreement.

11.15       Independent

Nature of Lenders’ Rights.  The

amounts payable at any time under this Agreement to each Agent and each Lender

shall be separate and independent debts; each Lender shall be entitled to protect

and enforce its rights arising out of this Agreement; and it shall not be

necessary for any Agent or any other Lender to be joined as an additional party

in any proceeding for such purpose.

11.16       Survival

of Representations.  Unless a

longer period is provided herein, all covenants, agreements and representations

in this Agreement shall survive the making by the Lenders of the Loans and the

execution and delivery to Agent for the account of the Lenders of the Notes

evidencing the Loans, regardless of any investigation made by any Agent or the

Lenders and of the Agent’s and the Lenders’ access to any information, and

shall continue in full force and effect until the final and indefeasible

payment in full of the Notes and all of Borrower’s obligations under this

Agreement and the termination of the Revolving Commitments in their entirety.

11.17       Confidentiality.  Each of the Lenders severally agrees to keep

confidential all non-public information pertaining to Borrower and its

Subsidiaries which is provided to it by any such parties in accordance with

such Lender’s customary procedures for handling confidential information of

this nature and in a prudent fashion, and shall not disclose such information

to any Person except (i) to the extent such information is public when received

by such Lender or becomes public thereafter due to the act or omission of any

party other than a Lender, (ii) to the extent such information is independently

obtained from a source other than Borrower or its Subsidiaries and such information

from such source is not, to such Lender’s knowledge, subject to an obligation

of confidentiality or, if such information is subject to an obligation of

confidentiality, that disclosure of such information is permitted, (iii) to an

Affiliate of such Lender, counsel, auditors, examiners of any regulatory

authority having jurisdiction over such Lender, accountants and other

consultants retained by Agent or any Lender, (iv) in connection with any

litigation or the enforcement of the rights of any Lender or Agent under this

Agreement or any other Loan Document, (v) to the extent required by any

applicable statute, rule or regulation or court order (including, without

limitation, by way of subpoena) or pursuant to the request of any Governmental

Authority having jurisdiction over any Lender or Agent; provided, however, that

in such event, if the Lender(s) are able to do so, the Lender shall provide

Borrower with prompt notice of such requested disclosure so that Borrower may

seek a protective order or other appropriate remedy, and, in any event, the

Lenders will endeavor in good faith to provide only that portion of such

information which, in the reasonable judgment of the Lender(s), is relevant and

legally required to be provided, or (vi) to the extent disclosure to other

entities is appropriate in connection with any proposed or actual assignment or

grant of a participation by any of the Lenders of interests in this Agreement

and/or any of the other Loan Documents to such other financial institutions (who

will in turn be required to maintain confidentiality as if they were Lenders

parties to this Agreement).  In no event

shall Agent or any Lender be obligated or required to return any such

information or other materials furnished by Borrower.

11.18       Effectiveness.  This Agreement shall become effective on the

date (the “Effective Date”) on which Borrower and each of the Lenders

shall have signed a counterpart of this Agreement (whether the same or

different counterparts) and shall have delivered the same to the Agent at the

Notice Office (or to Agent’s counsel as directed by such counsel) or, in the

case of the Lenders, shall have given to Agent or telephonic (confirmed in

writing), written, telex or facsimile notice (actually received) at such office

or the office of Agent’s counsel that the same has been signed and mailed to

it.  Agent will give Borrower and each

Lender prompt written notice of the occurrence of the Effective Date.

11.19       Waiver of

Immunities.  Subject to Section

11.10 of this Agreement, each Lender waives, in relation to any action or

proceeding arising out of or relating to this Agreement or any Note, any

sovereign immunity or other immunity to suit or to execution or attachment to

which such Lender or any of its property may be or become entitled.

11.20       Concerning

the Collateral and the Loan Documents.

(a)           Authority. 

Each Lender (on its own behalf and on behalf of any Affiliate of such

Lender which is a Secured Creditor) authorizes and directs BT to act as

collateral agent and to enter into the Loan Documents relating to the

Collateral for the benefit of the Lenders and the other Secured Creditors.  Each Lender (on its own behalf and on behalf

of any Affiliate of such Lender which is a Secured Creditor) agrees that any

action taken by the Agent, the Collateral Agent or the Majority Lenders (or,

where required by the express terms, hereof, a different proportion of the

Lenders) in accordance with the provisions hereof or of the other Loan

Documents, and the exercise by the Agent, the Collateral Agent or the Majority

Lenders (or, where so required, such different proportion) of the powers set

forth herein or therein, together with such other powers as are reasonably

incidental thereto, shall be authorized and binding upon all of the Lenders and

the other Secured Creditors. Without limiting the generality of the foregoing,

the Agent and the Collateral Agent shall have the sole and exclusive right and

authority to (i) act as the disbursing and collecting agent for the Lenders and

the other Secured Creditors with respect to all payments and collections

arising in connection herewith and with the Loan Documents relating to the

Collateral; (ii) execute and deliver each Loan Document relating to the

Collateral and accept delivery of each such agreement delivered by any Credit

Party, (iii) act as collateral agent for the Lenders and the other Secured

Creditors for purposes stated in the Loan Documents to the extent such

perfection is required under the Loan Documents, provided, however, the Agent

and the Collateral Agent hereby appoints, authorizes and directs each Lender

and the other Secured Creditors to act as collateral sub-agent for the Agent,

the Collateral Agent and the Lenders for purposes of the perfection of all

security interests and Liens with respect to each Credit Party’s respective

deposit accounts maintained with, and cash and Cash Equivalents held by, such

Lender or such other Secured Creditor; (iv) manage, supervise and otherwise

deal with the Collateral; (v) take such action as is necessary or desirable to

maintain the perfection and priority of the security interests and liens

created or purported to be created by the Loan Documents, and (vi) except as

may be otherwise specifically restricted by the terms hereof or of any other

Loan Document, exercise all remedies given to the Agent or the Lenders with

respect to the Collateral under the Loan Documents relating thereto, applicable

law or otherwise.

(b)           Release of Collateral.

(i)            The

Agent and each Lender (on its own behalf and on behalf of any Affiliate of such

Lender that is a Secured Creditor) hereby directs the Agent and the Collateral

Agent to release, in accordance with the terms hereof, any Lien held by the

Agent or the Collateral Agent, under the Security Documents:

(A)          against

all of the Collateral, upon final and indefeasible payment in full in cash of

the Loans and Obligations and termination of all Commitments and Letters of

Credit and termination hereof;

(B)           against

any part of the Collateral sold or disposed of by Borrower or any of its

Subsidiaries to the extent such sale or disposition is permitted hereby (or

permitted pursuant to a waiver or consent of a transaction otherwise prohibited

hereby);

(C)           against

any Collateral acquired by Borrower or any of its Subsidiaries after the

Restatement Date and at least 80% of the purchase price therefor is within 120

days of the acquisition thereof financed with Purchase Money Indebtedness

secured by a Lien permitted by clause (ix) of the definition of Permitted

Liens.

(D)          so

long as no Unmatured Event of Default or Event of Default has occurred and is

continuing, in the sole discretion of the Agent upon the request of Borrower,

against any part of the Collateral with a fair market value of less than

$1,000,000 in the aggregate during the term of this Agreement as such fair

market value may be certified to the Agent by Borrower in an officer’s

certificate acceptable in form and substance to the Agent; and

(E)           against

a part of the Collateral which release does not require the consent of all of

the Lenders as set forth in Section 11.1(a), if such release is

consented to by the Majority Lenders;

provided, however, that (y) the Agent and

the Collateral Agent shall not be required to execute any such document on

terms which, in its opinion, would expose it to liability or create any

obligation or entail any consequence other than the release of such Liens

without recourse or warranty, and (z) such release shall not in any manner

discharge, affect or impair the Obligations or any Liens upon (or obligations

of Borrower or any of its Subsidiaries in respect of) all interests retained by

Borrower and/or any of its Subsidiaries, including (without limitation) the

proceeds of any sale, all of which shall continue to constitute part of the

Collateral.

(ii)           Each

Lender (on its own behalf and on behalf of any Affiliate of such Lender that is

a Secured Creditor) hereby directs the Agent and the Collateral Agent (and the

Agent and the Collateral Agent agree) to execute and deliver or file such

termination and partial release statements and such other things as are

necessary to release Liens to be released pursuant to this Section 11.20

promptly upon the effectiveness of any such release or enter into intercreditor

agreements contemplated or permitted herein.

(c)           No Obligation. 

Neither the Agent nor the Collateral Agent shall have any obligation

whatsoever to any Lender or any other Secured Creditor or to any other Person

to assure that the Collateral exists or is owned by any Credit Party or is

cared for, protected or insured or has been encumbered or that the Liens

granted to the Agent and the Collateral Agent herein or pursuant to the Loan

Documents have been properly or sufficiently or lawfully created, perfected,

protected or enforced or are entitled to any particular priority, or to

exercise at all or in any particular manner or under any duty of care,

disclosure or fidelity, or to continue exercising, any of the rights,

authorities and powers granted or available to the Agent or the Collateral

Agent in any of the Loan Documents, it being understood and agreed that in

respect of the Collateral, or any act, omission or event related thereto, Agent

and the Collateral Agent may act in any manner it may deem appropriate, in its

sole discretion, given the Agent’s and the Collateral Agent’s own interests in

the Collateral as one of the Lenders and that the Agent and the Collateral

Agent shall not have any duty or liability whatsoever to any Lender, provided,

that, notwithstanding the foregoing, the Agent and the Collateral Agent shall

be responsible for its grossly negligent actions or actions constituting

intentional misconduct.

                11.21       Matters Relating to the Second

Amendment and Restatement Agreement.

                                (a)           References to and Effect on the

Agreement.

On and after the

date hereof each reference in the Agreement to "this Agreement,"

"hereunder," "hereof," "herein," or words of like

import, and each reference to the Agreement, as the case may be, in the Loan

Documents and all other documents (the "Ancillary Documents")

delivered in connection with the Agreement shall mean and be a reference to the

Agreement as amended by the Second Amendment and Restatement Agreement.

Except as

specifically amended above, the Agreement, and the other Loan Documents and all

other Ancillary Documents shall remain in full force and effect and are hereby

ratified and confirmed.

The execution,

delivery and effectiveness of the Second Amendment and Restatement Agreement

shall not, except as expressly provided herein, operate as a waiver of any

right, power or remedy of the Lenders or Agent under the Agreement, the Loan

Documents or the Ancillary Documents.

                                (b)           Execution

in Counterparts.  The Second

Amendment and Restatement Agreement may be executed in counterparts, each of

which when so executed and delivered shall be deemed to be an original and all

of which taken together shall constitute but one and the same instrument.

                (c) Governing Law.  THE SECOND AMENDMENT AND RESTATEMENT

AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE INTERNAL LAWS OF THE

STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED AND

ENFORCED IN ACCORDANCE WITH SUCH LAWS OF SAID STATE, WITHOUT REGARD TO

PRINCIPLES OF CONFLICTS OF LAWS.

 

IN

WITNESS WHEREOF, the parties hereto have caused this Second Amendment and

Restatement Agreement to be executed by their respective officers thereunto

duly authorized, as of the date first above written.

	

   

  	

  BMC INDUSTRIES, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Kathleen P. Pepski

  
	

   

  	

  Name:

  	

  Kathleen P. Pepski

  
	

   

  	

  Title:

  	

  Senior Vice President

  and

  
	

   

  	

   

  	

  Chief Financial Officer

  

 

	

   

  	

  BANKERS TRUST COMPANY,

  
	

   

  	

   

  
	

   

  	

  individually as a

  Lender and as Agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Robert Telescai

  
	

   

  	

  Name:

  	

  Robert Telesca

  
	

   

  	

  Title:

  	

  Vice President

  
	

   

  	

   

  	

   

  

 

 

	

   

  	

  BANK ONE, NA (Main Office Chicago)

  
	

   

  	

   

  
	

   

  	

  individually as a

  Lender and as documentation agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Jenny A. Gilpin

  
	

   

  	

  Name:

  	

  Jenny A. Gilpin

  
	

   

  	

  Title:

  	

  Director, Capital

  Markets

  
	

   

  	

   

  	

   

  

 

 

	

   

  	

  WELLS FARGO BANK MINNESOTA,

  
	

   

  	

  NATIONAL ASSOCIATION (f/k/a Norwest 

  
	

   

  	

  Bank Minnesota, National Association)

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Calvin R. Emerson

  
	

   

  	

  Name:

  	

  Calvin R. Emerson

  
	

   

  	

  Title:

  	

  Vice President

  

 

 

	

   

  	

  HARRIS TRUST AND SAVINGS BANK

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ John Quigley

  
	

   

  	

  Name:

  	

  John Quigley

  
	

   

  	

  Title:

  	

  Vice President

  

 

 

	

   

  	

  CREDIT AGRICOLE INDOSUEZ

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  

 

 

	

   

  	

  WACHOVIA BANK, N.A.

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Susan Holmes

  
	

   

  	

  Name:

  	

  Susan Holmes

  
	

   

  	

  Title:

  	

  Senior Vice President

  

 

 

	

   

  	

  UNION BANK OF CALIFORNIA, N.A.

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Ching Lim

  
	

   

  	

  Name:

  	

  Ching Lim

  
	

   

  	

  Title:

  	

  Vice President

  

 

 

	

   

  	

  U.S. BANK NATIONAL ASSOCIATION

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ William J. Umscheid

  
	

   

  	

  Name:

  	

  William J. Umscheid

  
	

   

  	

  Title:

  	

  Vice PresidentPrepared by MERRILL CORPORATION

	

  EXHIBIT 10.47

  
	

   

  
	

   

  
	

   

  
	

  TABLE OF CONTENTS

  
	

   

  
	

  ARTICLE I SECURITY

  INTERESTS

  
	

   

  
	

  1.1  GRANT OF SECURITY INTERESTS

  
	

  1.2  POWER OF ATTORNEY

  
	

   

  
	

  ARTICLE

  II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

  
	

   

  
	

  2.1  CHIEF EXECUTIVE OFFICE/INVENTORY AND

  EQUIPMENT LOCATIONS

  
	

  2.2  STATE OF INCORPORATION

  
	

  2.3  TRADE NAMES; CHANGE OF NAME

  
	

   

  
	

  ARTICLE

  III PROVISIONS CONCERNING ALL COLLATERAL

  
	

   

  
	

  3.1  PROTECTION OF ADMINISTRATIVE AGENT’S

  SECURITY

  
	

  3.2  WAREHOUSE RECEIPTS NON-NEGOTIABLE;

  THIRD-PARTY ACKNOWLEDGMENTS

  
	

  3.3  FURTHER ACTIONS

  
	

  3.4  FINANCING STATEMENTS

  
	

   

  
	

  ARTICLE IV REMEDIES UPON OCCURRENCE OF EVENT

  OF DEFAULT

  
	

   

  
	

  4.1  REMEDIES; OBTAINING THE COLLATERAL UPON

  DEFAULT

  
	

  4.2  REMEDIES; DISPOSITION OF THE COLLATERAL

  
	

  4.3  WAIVER OF CLAIMS

  
	

  4.4  APPLICATION OF PROCEEDS

  
	

  4.5  REMEDIES CUMULATIVE

  
	

  4.6  DISCONTINUANCE OF PROCEEDINGS

  
	

   

  
	

  ARTICLE V INDEMNITY

  
	

   

  
	

  5.1  INDEMNITY

  
	

  5.2  INDEMNITY OBLIGATIONS SECURED BY

  COLLATERAL; SURVIVAL

  
	

   

  
	

  ARTICLE VI DEFINITIONS

  
	

   

  
	

  ARTICLE VII

  MISCELLANEOUS

  
	

   

  
	

  7.1  NOTICES

  
	

  7.2  WAIVER; AMENDMENT

  
	

  7.3  OBLIGATIONS ABSOLUTE

  
	

  7.4  SUCCESSORS AND ASSIGNS

  
	

  7.5  HEADINGS DESCRIPTIVE

  
	

  7.6  SEVERABILITY

  
	

  7.7  GOVERNING LAW

  
	

  7.8  BORROWER’S DUTIES

  
	

  7.9  TERMINATION; RELEASE

  
	

  7.10  COUNTERPARTS

  
	

  7.11  THE ADMINISTRATIVE AGENT

  
	

   

  
	

  ARTICLE VIII

  
	

   

  

ANNEX A             Schedule

of Chief Executive Offices

ANNEX B              Schedule of Inventory and

Equipment Locations

ANNEX C              Schedule of Trade, Fictitious and

Other Names

 

SECURITY

AGREEMENT

THIS

SECURITY AGREEMENT, dated as of October 12, 2001, is between BMC

INDUSTRIES, INC., a Minnesota corporation (“Borrower”), BANKERS TRUST

COMPANY, as administrative agent (the “Administrative Agent”) and U.S.

BANK NATIONAL ASSOCIATION (“US Bank”) for the benefit of (i) the Lenders

and the Agent under the Credit Agreement hereinafter referred to (such Lenders

and the Agent are hereinafter called the “Bank Creditors”), (ii) if one

or more Lenders (or any Affiliate thereof) enter into one or more (A) interest

rate protection agreements (including, without limitation, interest rate swaps,

caps, floors, collars and similar agreements), (B) foreign exchange

contracts, currency swap agreements or other similar agreements or arrangements

designed to protect against the fluctuations in currency values and/or

(C) other types of hedging agreements from time to time (collectively, the

“Interest Rate Protection or Other Hedging Agreements”) with, or

guaranteed by, Borrower, any such Lender or Lenders or any Affiliate of such

Lender or Lenders (even if the respective Lender subsequently ceases to be a

Lender under the Credit Agreement for any reason) so long as any such Lender or

Affiliate participates in the extension of such Interest Rate Protection or

Other Hedging Agreements and their subsequent assigns, if any (collectively,

the “Other Creditors”) and (iii) US Bank as lender under the US Bank

Letter of Credit Facility (as defined below) (the “LC Creditor” and,

together with the Other Creditors and the Bank Creditors, hereinafter called

the “Secured Creditors”).  Except

as otherwise defined herein, terms used herein and defined in the Credit

Agreement (as hereinafter defined) shall be used herein as so defined.

W I T N E S S E T H

:

WHEREAS,

Borrower, the financial institutions (the “Lenders”) from time to time

party thereto and Bankers Trust Company, as Administrative Agent (together with

any successor agent, the “Agent”), have entered into an Amended and

Restated Credit Agreement, dated as of June 25, 1998, providing for the making

of Loans and the issuance of, and participation in, Letters of Credit as

contemplated therein (as used herein, the term “Credit Agreement” means

the Credit Agreement described above in this paragraph, as in effect on the

date hereof and as amended by that certain Second Amendment and Restatement

Agreement dated as of the date hereof, as the same may be amended, modified,

extended, renewed, replaced, restated or supplemented from time to time, and

including any agreement extending the maturity of or restructuring of all or

any portion of the Indebtedness under such agreement or any successor

agreements);

WHEREAS,

Borrower may at any time and from time to time enter into, or guarantee, one or

more Interest Rate Protection or Other Hedging Agreements with one or more

Other Creditors;

WHEREAS,

it is a condition precedent to each of the above-described extensions of credit

that Borrower shall have executed and delivered this Agreement; and

WHEREAS,

Borrower desires to enter into this Agreement in order to satisfy the condition

described in the preceding paragraph;

NOW,

THEREFORE, in consideration of the extensions of credit to be made to Borrower

and other benefits accruing to Borrower, the receipt and sufficiency of which

are hereby acknowledged, Borrower hereby makes the following representations

and warranties to the Administrative Agent for the benefit of the Secured

Creditors and hereby covenants and agrees with the Administrative Agent for the

benefit of the Secured Creditors as follows:

ARTICLE

I

SECURITY

INTERESTS

 

1.1           Grant

of Security Interests. 

(a)  As security for the prompt and complete payment and

performance when due of all of the Obligations, Borrower does hereby pledge and

grant to the Administrative Agent for the benefit of the Secured Creditors, a

continuing security interest of first priority (subject to Liens evidenced by

Permitted Filings and other Permitted Liens) in, all of the right, title and

interest of Borrower in, to and under all of the following, whether now

existing or hereafter from time to time acquired:  (i) each and every Account, (ii) all Contracts, together with all

Contract Rights arising thereunder, (iii) all Inventory, (iv) all Equipment,

(v) all other Goods, General Intangibles, Chattel Paper, Documents, Investment

Property and Instruments, and (vi) all Proceeds and products of any and all of

the foregoing (all of the above, collectively, the “Collateral”).

 

(b)  The

security interests of the Administrative Agent under this Agreement extend to

all Collateral of the kind which is the subject of this Agreement which

Borrower may acquire at any time during the continuation of this Agreement.

1.2           Power

of Attorney.  Borrower hereby constitutes and appoints the

Administrative Agent its true and lawful attorney, with full power after the

occurrence of and during the continuance of an Event of Default (in the name of

Borrower or otherwise), in the Administrative Agent’s reasonable discretion, to

take any action and to execute any instrument required by this Agreement if

Borrower has failed to do so after demand by the Administrative Agent.

 

ARTICLE

II

GENERAL

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Borrower

represents, warrants and covenants, which representations, warranties and

covenants shall survive execution and delivery of this Agreement, as follows:

2.1           Chief Executive

Office/Inventory and Equipment Locations.  The chief executive office of Borrower is

located at the address indicated on Annex A hereto.  All Inventory and Equipment held on the date

hereof by Borrower is located at one of the locations shown on Annex B

hereto (other than (i) immaterial portions of Inventory or Equipment or (ii)

Equipment out for repair).    Prior to

January 1, 2002, the Borrower shall not (x) move its chief executive office to

any of the States of Mississippi, Alabama or Florida, or (y) move any Inventory

or Equipment to any of the States of Mississippi, Alabama or Florida until (i)

it shall have given to the Administrative Agent not less than 30 days’ prior

written notice of its intention to do so, (ii) with respect to such move, it

shall have taken all action, reasonably satisfactory to the Administrative

Agent, to maintain the security interest of the Administrative Agent in the

Collateral intended to be granted and perfected under the Uniform Commercial

Code hereby at all times fully perfected and in full force and effect, (iii) at

the reasonable request of the Administrative Agent, it shall have furnished a

customary opinion of counsel reasonably acceptable to the Administrative Agent

to the effect that all financing or continuation statements and amendments or

supplements thereto have been filed in the appropriate filing office or

offices, and all other actions (including, without limitation, the payment of

all filing fees and taxes, if any, payable in connection with such filings)

have been taken, in order to perfect (and maintain the perfection and priority

of) the security interest granted hereby and (iv) the Administrative Agent

shall have received evidence that all other actions (including, without

limitation, the payment of all filing fees and taxes, if any, payable in

connection with such filings) have been taken, in order to perfect (and

maintain the perfection and priority of) the security interest granted hereby.

 

2.2           State of Incorporation.  The state of incorporation of Borrower is

indicated on Annex A hereto. 

Borrower will not change its state of incorporation except as in

accordance with the last sentence of this Section 2.2.  Borrower shall not establish a new state of

incorporation until (i) it shall have given to the Administrative Agent not

less than 30 days’ prior written notice of its intention to do so, clearly

describing such new state of incorporation and providing such other information

in connection therewith as the Administrative Agent may reasonably request,

(ii) with respect to such new state of incorporation, it shall have taken all

action, reasonably satisfactory to the Administrative Agent, to maintain the

security interest of the Administrative Agent in the Collateral intended to be

granted and perfected under the Uniform Commerical Code hereby at all times

fully perfected and in full force and effect, (iii) at the reasonable request

of the Administrative Agent, it shall have furnished a customary opinion of counsel

reasonably acceptable to the Administrative Agent to the effect that all

financing or continuation statements and amendments or supplements thereto have

been filed in the appropriate filing office or offices, and all other actions

(including, without limitation, the payment of all filing fees and taxes, if

any, payable in connection with such filings) have been taken, in order to

perfect (and maintain the perfection and priority of) the security interest

granted hereby and (iv) the Administrative Agent shall have received evidence

that all other actions (including, without limitation, the payment of all

filing fees and taxes, if any, payable in connection with such filings have

been taken, in order to perfect (and maintain the perfection and priority of)

the security interest granted hereby.

 

2.3           Trade Names; Change of

Name.  Borrower does not have and has not operated

in any jurisdiction under, or in the preceding 12 months has not had nor has

operated in any jurisdiction under, any trade names, fictitious names or other

names (including, without limitation, any names of divisions or operations)

except its legal name and such other trade, fictitious or other names as are

listed on Annex C hereto. 

The corporation identification number or other applicable formation

identification number shall be set forth across from the exact legal name of

Borrower identified in Annex C. 

Borrower shall not change its legal name or assume or operate in any

jurisdiction under any trade, fictitious or other name in any manner which

might make any financing statement or continuation statement filed in

connection therewith seriously misleading except those names listed on Annex

C hereto and new names (including, without limitation, any names of

divisions or operations) established in accordance with the last sentence of

this Section 2.3.  Borrower shall

not assume or operate in any jurisdiction under any new trade, fictitious or

other name that would make any financing statement or continuation statement

filed in connection therewith, seriously misleading until (i) it shall have

given to the Administrative Agent not less than 30 days’ prior written notice

of its intention so to do, clearly describing such new name and the

jurisdictions in which such new name shall be used and providing such other

information in connection therewith as the Administrative Agent may reasonably

request, (ii) with respect to such new name, it shall have taken all action to

maintain the security interest of the Administrative Agent in the Collateral intended

to be granted hereby at all times fully perfected and in full force and effect,

(iii) at the reasonable request of the Administrative Agent, it shall have

furnished a customary opinion of counsel reasonablyacceptable to the

Administrative Agent to the effect that all financing or continuation

statements and amendments or supplements thereto have been filed in the

appropriate filing office or offices, and (iv) the Administrative Agent shall

have received evidence that all other actions (including, without limitation,

the payment of all filing fees and taxes, if any, payable in connection with

such filings) have been taken, in order to perfect (and maintain the perfection

and priority of) the security interest granted hereby.

 

 

ARTICLE

III

PROVISIONS

CONCERNING ALL COLLATERAL

 

3.1           Protection of

Administrative Agent’s Security.  Borrower will do nothing to impair the

rights of the Administrative Agent in the Collateral other than dispositions,

the creation of Liens and other encumbrances and other actions permitted

hereunder and under the Credit Agreement and other Loan Documents.

 

3.2           Warehouse Receipts

Non-Negotiable; Third-Party Acknowledgments.  Borrower agrees that if any warehouse

receipt or receipt in the nature of a warehouse receipt is issued with respect

to any of its Inventory, such warehouse receipt or receipt in the nature

thereof shall not be “negotiable” (as such term is used in Section 7-104

of the Uniform Commercial Code as in effect in any relevant jurisdiction or

under other relevant law).  Where

Collateral with a fair market value of greater than $100,000 is in the

possession of a third party, Borrower will join with the Administrative Agent

in notifying the third party of the Administrative Agent’s security interest

and obtaining an acknowledgment from the third party that it is holding the

Collateral for the benefit of the Administrative Agent.

 

3.3           Further Actions.  Borrower will, at its own expense, make,

execute, endorse, acknowledge, file and/or deliver to the Administrative Agent from

time to time such lists, descriptions and designations of its Collateral,

warehouse receipts, receipts in the nature of warehouse receipts, bills of

lading, documents of title, vouchers, invoices, schedules, confirmatory

assignments, conveyances, financing statements, transfer endorsements, powers

of attorney, certificates, reports and other assurances or instruments and take

such further steps relating to the Collateral and other property or rights

covered by the security interest hereby granted, which the Administrative Agent

deems reasonably appropriate or advisable to perfect, preserve or protect its

security interest in the Collateral.  Notwithstanding any other provision of this

Agreement, so long as no Unmatured Event of Default or Event of Default shall

have occurred and be continuing, the only obligation of the Borrower arising

hereunder in connection with the perfection of the security interests granted

in the Collateral listed in Sections 1.1(a)(ii) and (v) above (and Section

1.1(a)(vi), but solely to the extent it relates to Sections 1.1(a)(ii)

and (v)) shall be to deliver financing statements pursuant to Section

3.4 below.

 

3.4           Financing Statements.  Borrower agrees to deliver to the

Administrative Agent such financing statements, in form reasonably acceptable

to the Administrative Agent, as the Administrative Agent may from time to time

reasonably request or as are reasonably 

necessary (or desirable in the reasonable opinion of the Administrative

Agent) to establish and maintain a valid, enforceable, first priority perfected

security interest (subject only to Permitted Liens) in the Collateral as

provided herein and the other rights and security contemplated hereby all in

accordance with the Uniform Commercial Code as enacted in any and all relevant

jurisdictions or any other relevant law. 

Borrower will pay any applicable filing fees, recordation taxes and

related expenses relating to its Collateral. 

Borrower hereby authorizes the Administrative Agent to file any such

Uniform Commerical Code financing statements without the signature of Borrower

where permitted by law.

 

ARTICLE

IV

REMEDIES

UPON OCCURRENCE OF EVENT OF DEFAULT

 

4.1           Remedies; Obtaining the

Collateral Upon Default.  Borrower agrees that, if any Event of

Default shall have occurred and be continuing, then and in every such case,

subject to any mandatory requirements of applicable law then in effect, the

Administrative Agent, in addition to any rights now or hereafter existing under

applicable law, shall have all rights as a secured creditor under the Uniform

Commercial Code in all relevant jurisdictions and may:

 

(a)           personally, or by agents or

attorneys, immediately take possession of the Collateral or any part thereof,

from Borrower or any other Person who then has possession of any part thereof

with or without notice or process of law, and for that purpose may enter upon

Borrower’s premises where any of the Collateral is located and remove the same

and use in connection with such removal any and all services, supplies, aids

and other facilities of Borrower; and

(b)           instruct the obligor or obligors on

any agreement, instrument or other obligation (including, without limitation,

the Accounts and the Contracts) constituting the Collateral to make any payment

required by the terms of such agreement, instrument or other obligation

directly to the Administrative Agent and may exercise any and all remedies of

Borrower in respect of such Collateral; and

(c)           sell, assign or otherwise liquidate,

or direct Borrower to sell, assign or otherwise liquidate, any or all of the

Collateral or any part thereof, and take possession of the proceeds of any such

sale or liquidation; and

(d)           take possession of the Collateral or

any part thereof, by directing Borrower in writing to deliver the same to the Administrative

Agent at any place or places reasonably designated by the Administrative Agent,

in which event Borrower shall at its own expense:

(i)            forthwith cause the same to be moved

to the place or places so designated by the Administrative Agent and there

delivered to the Administrative Agent, and

(ii)           store and keep any Collateral so

delivered to the Administrative Agent at such place or places pending further

action by the Administrative Agent as provided in Section 6.2 hereof,

and

(iii)          while the Collateral shall be so

stored and kept, provide such guards and maintenance services as shall be

necessary to protect the same and to preserve and maintain them in good

condition; and

it

being understood that Borrower’s obligation so to deliver the Collateral is of

the essence of this Agreement and that, accordingly, upon application to a

court of equity having jurisdiction, the Administrative Agent shall be entitled

to seek a decree requiring specific performance by Borrower of said obligation.

4.2           Remedies; Disposition of

the Collateral.  If an Event of Default shall have occurred

and be continuing, then any Collateral repossessed by the Administrative Agent

under or pursuant to Section 4.1 hereof and any other Collateral whether

or not so repossessed by the Administrative Agent, may be sold, assigned,

leased or otherwise disposed of under one or more contracts or as an entirety,

and without the necessity of gathering at the place of sale the property to be

sold, and in general in such manner, at such time or times, at such place or

places and on such terms as the Administrative Agent may, in compliance with

any mandatory requirements of applicable law, determine to be commercially

reasonable.  Any of the Collateral may

be so sold, leased or otherwise disposed of, in the condition in which the same

existed when taken by the Administrative Agent or after any overhaul or repair

at the expense of Borrower which the Administrative Agent shall determine to be

commercially reasonable.  Any such

disposition which shall be a private sale or other private proceedings

permitted by such requirements shall be made upon not less than 10 days’

written notice to Borrower specifying the time at which such disposition is to

be made and the intended sale price or other consideration therefor, and shall

be subject, for the 10 days after the giving of such notice, to the right of

Borrower or any nominee of Borrower to acquire the Collateral involved at a

price or for such other consideration at least equal to the intended sale price

or other consideration so specified. 

Any such disposition which shall be a public sale permitted by such

requirements shall be made upon not less than 10 days’ written notice to

Borrower specifying the time and place of such sale and, in the absence of applicable

requirements of law, shall be by public auction (which may, at the

Administrative Agent’s option, be subject to reserve), after publication of

notice of such auction not less than 10 days prior thereto in two newspapers in

general circulation in the City of New York or in such other locations as may

be necessary in order for the sale to be “commercially reasonable” (as such

term is used in Article 9 Part V of the New York Uniform Commercial Code).  To the extent permitted by any such

requirement of law, the Administrative Agent and the Secured Creditors may bid

for and become the purchaser of the Collateral or any item thereof, offered for

sale in accordance with this Section without accountability to Borrower.  If, under mandatory requirements of applicable

law, the Administrative Agent shall be required to make disposition of the

Collateral within a period of time which does not permit the giving of notice

to Borrower as hereinabove specified, the Administrative Agent need give

Borrower only such notice of disposition as shall be reasonably practicable in

view of such mandatory requirements of applicable law.  Borrower agrees to do or cause to be done

all such other acts and things as may be reasonably necessary to make such sale

or sales of all or any portion of the Collateral valid and binding and in

compliance with any and all applicable laws, regulations, orders, writs,

injunctions, decrees or awards of any and all courts, arbitrators or

governmental instrumentalities, domestic or foreign, having jurisdiction over

any such sale or sales, all at Borrower’s expense.

 

4.3           Waiver of Claims.  Except as otherwise provided in this

Agreement, BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,

NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE ADMINISTRATIVE AGENT’S

TAKING POSSESSION OR THE ADMINISTRATIVE AGENT’S DISPOSITION OF ANY OF THE

COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING

FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH BORROWER WOULD

OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF

ANY STATE, and Borrower hereby further waives, to the extent permitted by law:

 

(a)           all damages occasioned by such taking

of possession except any damages which are the direct result of the

Administrative Agent’s gross negligence or willful misconduct;

(b)           all other requirements as to the

time, place and terms of sale or other requirements with respect to the

enforcement of the Administrative Agent’s rights hereunder; and

(c)           all rights of redemption,

appraisement, valuation, stay, extension or moratorium now or hereafter in

force under any applicable law in order to prevent or delay the enforcement of

this Agreement or the absolute sale of the Collateral or any portion thereof,

and Borrower, for itself and all who may claim under it, insofar as it or they

now or hereafter lawfully may, hereby waives the benefit of all such laws.

Any

sale of, or the grant of options to purchase, or any other realization upon,

any Collateral shall operate to divest all right, title, interest, claim and

demand, either at law or in equity, of Borrower therein and thereto, and shall

be a perpetual bar both at law and in equity against Borrower and against any

and all Persons claiming or attempting to claim the Collateral so sold,

optioned or realized upon, or any part thereof, from, through and under

Borrower.

4.4           Application of Proceeds.  (a) 

All moneys collected by the Administrative Agent (or, to the extent the

Pledge Agreement or any Mortgage to which Borrower is a party requires proceeds

of Collateral under such agreement to be applied in accordance with the

provisions of this Agreement, the Pledgee or Mortgagee under such other

agreement) upon any sale or other disposition of the Collateral, together with

all other moneys received by the Administrative Agent hereunder, shall be

applied as follows:  (i)          first, to the payment of all amounts

owing the Administrative Agent of the type described in clauses (iii) and (iv)

of the definition of “Obligations”;

(ii)           second, to the extent proceeds remain

after the application pursuant to the preceding clause (i), an amount equal to

the outstanding Primary Obligations shall be paid to the Secured Creditors as

provided in Section 4.4(e) hereof, with each Secured Creditor receiving

an amount equal to such outstanding Primary Obligations or, if the proceeds are

insufficient to pay in full all such Primary Obligations, its Pro Rata Share of

the amount remaining to be distributed;

(iii)          third, to the extent proceeds remain

after the application pursuant to the preceding clauses (i) and (ii), an amount

equal to the outstanding Secondary Obligations shall be paid to the Secured

Creditors as provided in Section 4.4(e), with each Secured Creditor

receiving an amount equal to its outstanding Secondary Obligations or, if the

proceeds are insufficient to pay in full all such Secondary Obligations, its

Pro Rata Share of the amount remaining to be distributed; and

(iv)          fourth, to the extent proceeds remain

after the application pursuant to the preceding clauses (i) through (iii),

inclusive, and following the termination of this Agreement pursuant to Section

7.9(a) hereof, to Borrower or to whomever may be lawfully entitled to

receive such surplus.

(b)           For purposes of this Agreement (i) “Pro

Rata Share” shall mean, when calculating a Secured Creditor’s portion of

any distribution or amount, that amount (expressed as a percentage) equal to a

fraction the numerator of which is the then unpaid amount of such Secured

Creditor’s Primary Obligations or Secondary Obligations, as the case may be,

and the denominator of which is the then outstanding amount of all Primary

Obligations or Secondary Obligations, as the case may be, (ii) “Primary

Obligations” shall mean (A) in the case of the Credit Agreement

Obligations, all principal of, and interest on, all Loans, all Unpaid Drawings

theretofore made (together with all interest accrued thereon), and the

aggregate Stated Amounts of all Letters of Credit issued (or deemed issued)

under the Credit Agreement, and all Fees and (B) in the case of the Other

Obligations, all amounts due under the Interest Rate Protection or Other

Hedging Agreements (other than indemnities, fees (including, without

limitation, attorneys’ fees) and similar obligations and liabilities) and (iii)

“Secondary Obligations” shall mean all Obligations other than Primary

Obligations.

(c)           When payments to Secured Creditors

are based upon their respective Pro Rata Shares, the amounts received by such

Secured Creditors hereunder shall be applied (for purposes of making

determinations under this Section 4.4 only) (i) first, to their Primary

Obligations and (ii) second, to their Secondary Obligations.  If any payment to any Secured Creditor of

its Pro Rata Share of any distribution would result in overpayment to such

Secured Creditor, such excess amount shall instead be distributed in respect of

the unpaid Primary Obligations or Secondary Obligations, as the case may be, of

the other Secured Creditors, with each Secured Creditor whose Primary

Obligations or Secondary Obligations, as the case may be, have not been paid in

full to receive an amount equal to such excess amount multiplied by a fraction

the numerator of which is the unpaid Primary Obligations or Secondary

Obligations, as the case may be, of such Secured Creditor and the denominator

of which is the unpaid Primary Obligations or Secondary Obligations, as the

case may be, of all Secured Creditors entitled to such distribution.

(d)           Each of the Secured Creditors agrees

and acknowledges that if the Bank Creditors are to receive a distribution on

account of undrawn amounts with respect to Letters of Credit issued (or deemed

issued) under the Credit Agreement (which shall only occur after all

outstanding Loans and Unpaid Drawings with respect to such Letters of Credit

have been paid in full), such amounts shall be paid to the Agent under the

Credit Agreement and held by it, for the equal and ratable benefit of the Bank

Creditors, as cash security for the repayment of Obligations owing to the Bank

Creditors as such.  If any amounts are

held as cash security pursuant to the immediately preceding sentence, then upon

the termination of all outstanding Letters of Credit, and after the application

of all such cash security to the repayment of all Obligations owing to the Bank

Creditors after giving effect to the termination of all such Letters of Credit,

if there remains any excess cash, such excess cash shall be returned by the

Agent to the Administrative Agent for distribution in accordance with Section

4.4(a) hereof.

(e)           Except as set forth in Section

4.4(d) hereof, all payments required to be made hereunder shall be made (i)

if to the Bank Creditors, to the Agent under the Credit Agreement for the

account of the Bank Creditors, and (ii) if to the Other Creditors, to the

trustee, paying agent or other similar representative (each a “Representative”)

for the Other Creditors or, in the absence of such a Representative, directly

to the Other Creditors.

(f)            For purposes of applying payments

received in accordance with this Section 4.4, the Administrative Agent

shall be entitled to rely upon (i) the Agent under the Credit Agreement and

(ii) the Representative for the Other Creditors or, in the absence of such a

Representative, upon the Other Creditors for a determination (which the Agent,

each Representative for any Secured Creditors and the Secured Creditors agree

(or shall agree) to provide upon request of the Administrative Agent) of the

outstanding Primary Obligations and Secondary Obligations owed to the Bank

Creditors or the Other Creditors, as the case may be.  Unless it has actual knowledge (including by way of written

notice from a Bank Creditor or an Other Creditor) to the contrary, the Agent and

each Representative, in furnishing information pursuant to the preceding

sentence, and the Administrative Agent, in acting hereunder, shall be entitled

to assume that no Secondary Obligations are outstanding.  Unless it has actual knowledge (including by

way of written notice from an Other Creditor) to the contrary, the

Administrative Agent, in acting hereunder, shall be entitled to assume that no

Interest Rate Protection or Other Hedging Agreements are in existence.

(g)           It is understood and agreed that

Borrower shall remain jointly and severally liable to the extent of any

deficiency between the amount of the proceeds of the Collateral hereunder and

the aggregate amount of the sums referred to in clauses (i) through (iii),

inclusive, of Section 4.4(a) hereof.

4.5           Remedies Cumulative.  Each and every right, power and remedy

hereby specifically given to the Administrative Agent shall be in addition to

every other right, power and remedy specifically given under this Agreement,

the Interest Rate Protection or Other Hedging Agreements, the other Loan

Documents or now or hereafter existing at law or in equity, or by statute and

each and every right, power and remedy whether specifically herein given or

otherwise existing may be exercised from time to time or simultaneously and as

often and in such order as may be deemed expedient by the Administrative

Agent.  All such rights, powers and

remedies shall be cumulative and the exercise or the beginning of the exercise

of one shall not be deemed a waiver of the right to exercise any other or

others.  No delay or omission of the

Administrative Agent in the exercise of any such right, power or remedy and no

renewal or extension of any of the Obligations and no course of dealing between

Borrower and the Administrative Agent or any holder of any of the Obligations

shall impair any such right, power or remedy or shall be construed to be a

waiver of any Default or Event of Default or an acquiescence therein.  No notice to or demand on Borrower in any

case shall entitle it to any other or further notice or demand in similar or

other circumstances or constitute a waiver of any of the rights of the

Administrative Agent to any other or further action in any circumstances

without notice or demand.  In the event

that the Administrative Agent shall bring any suit to enforce any of its rights

hereunder and shall be entitled to judgment, then in such suit the

Administrative Agent may recover reasonable expenses, including reasonable

attorneys’ fees, and the amounts thereof shall be included in such judgment.

 

4.6           Discontinuance of

Proceedings.  In case the Administrative Agent shall have

instituted any proceeding to enforce any right, power or remedy under this

Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall

have been discontinued or abandoned for any reason or shall have been

determined adversely to the Administrative Agent, then and in every such case

Borrower, the Administrative Agent and each holder of any of the Obligations

shall be restored to their former positions and rights hereunder with respect

to the Collateral subject to the security interest created under this Agreement

(except to the extent of any such adverse determination), and all rights,

remedies and powers of the Administrative Agent shall continue (a) as if no

such proceeding had been instituted, in the case of any such proceeding so

discontinued or abandoned, or (b) as if no proceeding had been instituted,

except to the extent of the determination, in the case of any such proceeding

so adversely determined.

ARTICLE

V

INDEMNITY

 

5.1           Indemnity.  (a)  Borrower

agrees to indemnify and hold harmless the Administrative Agent and each Secured

Creditor and their respective successors, assigns, employees, agents and

servants (individually an “Indemnitee,” and collectively the “Indemnitees”)

from and against any and all claims, demands, losses, judgments and liabilities

(including liabilities for penalties) of whatsoever kind or nature, and to

reimburse each Indemnitee for all costs and expenses, including reasonable

attorneys’ fees, growing out of or resulting from this Agreement or the

exercise by any Indemnitee of any right or remedy granted to it hereunder or

under any Interest Rate Hedging Agreement or under any other Loan Document (but

excluding any claims, demands, losses, judgments and liabilities or expenses to

the extent incurred by reason of gross negligence or willful misconduct of such

Indemnitee).  If and to the extent that

the obligations of the Borrower under this Section 5.1(a) are

unenforceable for any reason, the Borrower hereby agrees to make the maximum

contribution to the payment and satisfaction of such obligations which is

permissible under applicable law.

 

(b)           Without limiting the application of Section

5.1(a) hereof, Borrower agrees to pay, or reimburse the Administrative

Agent for any and all reasonable fees, costs and expenses of whatever kind or

nature incurred in connection with the creation, preservation or protection of

the Administrative Agent’s Liens on, and security interest in, the Collateral,

including, without limitation, all reasonable fees and taxes in connection with

the recording or filing of instruments and documents in public offices, payment

or discharge of any taxes or Liens upon or in respect of the Collateral,

premiums for insurance with respect to the Collateral and all other reasonable

fees, costs and expenses in connection with protecting, maintaining or

preserving the Collateral and the Administrative Agent’s interest therein,

whether through judicial proceedings or otherwise, or in defending or

prosecuting any actions, suits or proceedings arising out of or relating to the

Collateral.

(c)           Without limiting the application of Section

5.1(a) or (b) hereof, Borrower agrees to pay, indemnify and hold each

Indemnitee harmless from and against any loss, costs, damages and expenses

which such Indemnitee may suffer, expend or incur in consequence of or growing

out of any misrepresentation by Borrower in this Agreement, any Interest Rate

Protection or Other Hedging Agreement, any other Loan Document or in any

writing contemplated by or made or delivered pursuant to or in connection with

this Agreement, any Interest Rate Protection or Other Hedging Agreement or any

other Loan Document.

(d)           If and to the extent that the

obligations of Borrower under this Section 5.1 are unenforceable for any

reason, Borrower hereby agrees to make the maximum contribution to the payment

and satisfaction of such obligations which is permissible under applicable law.

5.2           Indemnity Obligations

Secured by Collateral; Survival.  Any amounts paid by any Indemnitee as to

which such Indemnitee has the right to reimbursement shall constitute

Obligations secured by the Collateral prior to the release of the Collateral

pursuant to the terms hereof.  The

indemnity obligations of Borrower contained in this Article V shall

continue in full force and effect notwithstanding the full payment of all the

Notes issued under the Credit Agreement, the termination of all Interest Rate

Protection or Other Hedging Agreements and the payment of all other Obligations

(but excluding any unasserted contingent and indemnification obligations which

survive the termination hereof) and notwithstanding the discharge thereof.

 

ARTICLE

VI

DEFINITIONS

 

The

following terms shall have the meanings herein specified.  Such definitions shall be equally applicable

to the singular and plural forms of the terms defined.

“Account”

shall have the meaning provided in the Uniform Commercial Code.

“Administrative

Agent” shall have the meaning provided in the first paragraph of this

Agreement.

“Agent”

shall have the meaning provided in the first WHEREAS clause of this Agreement.

“Agreement”

shall mean this Security Agreement as the same may be modified, supplemented,

extended, renewed, replaced, restated or amended from time to time in

accordance with its terms.

“Bank

Creditor” shall have the meaning provided in the first paragraph of this

Agreement.

“Borrower”

shall have the meaning provided in the first paragraph of this Agreement.

 “Chattel Paper” shall have the meaning

provided in the Uniform Commercial Code.

“Class”

shall have the meaning provided in Section 7.2 of this Agreement.

“Collateral”

shall have the meaning provided in Section 1.1(a) of this Agreement.

“Contract

Rights” shall mean all rights of Borrower (including, without limitation,

all rights to payment) under each Contract.

“Contracts”

shall mean all contracts between Borrower and one or more additional parties

(including, without limitation, (i) each partnership agreement to which

Borrower is a party and (ii) any Interest Rate Protection or Other Hedging

Agreements), but excluding licenses, agreements and leases, which are

immaterial to the operations of Borrower, to the extent that the terms thereof

prohibit the assignment of, or granting of a security interest in, such

licenses, agreements or leases.

 “Credit Agreement” shall have the

meaning provided in the first WHEREAS clause of this Agreement.

“Credit

Agreement Obligations” shall have the meaning provided in the definition of

“Obligations” in this Article VI.

“Default”

shall mean any event which, with notice or lapse of time, or both, would

constitute an Event of Default.

“Documents”

shall have the meaning provided in the Uniform Commercial Code.

“Equipment”

shall mean any “equipment,” as such term is defined in the Uniform Commercial

Code, now or hereafter owned by Borrower.

“Event

of Default” shall mean any Event of Default under, and as defined in, the

Credit Agreement and shall in any event, without limitation, include any

payment default on any of the Obligations after the expiration of any

applicable grace period.

“General

Intangibles” shall have the meaning provided in the Uniform Commercial

Code.

“Goods”

shall have the meaning provided in the Uniform Commercial Code.

 “Indemnitee” shall have the meaning provided

in Section 5.1 of this Agreement.

“Instrument”

shall have the meaning provided in Article 9 of the Uniform Commercial

Code.

“Interest

Rate Protection or Other Hedging Agreements” shall have the meaning

provided in the first paragraph of this Agreement.

“Inventory”

shall mean all “inventory” as such term is defined in the Uniform Commercial

Code, now or hereafter owned by Borrower.

“Investment

Property” shall have the meaning ascribed thereto in Article 9 of the UCC.

“LC

Creditor” shall have the meaning provided in the first WHEREAS clause of

this Agreement.

“Lenders”

shall have the meaning provided in the first WHEREAS clause of this Agreement.

 “Obligations” shall mean (i) the full

and prompt payment when due (whether at the stated maturity, by acceleration or

otherwise) of all obligations (including, without limitation, all “Obligations”

as such term is defined in the Credit Agreement and all obligations which, but

for the automatic stay under Section 362(a) of the Bankruptcy Code,

would become due) and liabilities of Borrower now existing or hereafter

incurred under, arising out of or in connection with the Credit Agreement or

any other Loan Document to which Borrower is a Party and the due performance

and compliance by Borrower with all of the terms, conditions and agreements

contained in each such Loan Document (all such obligations and liabilities

being herein collectively called the “Credit Agreement Obligations”);

(ii) the full and prompt payment when due (whether at the stated maturity, by

acceleration or otherwise) of all obligations (including obligations which, but

for the automatic stay under Section 362(a) of the Bankruptcy Code,

would become due) and liabilities of Borrower now existing or hereafter

incurred under, arising out of or in connection with (x) any Interest Rate

Protection or Other Hedging Agreement, whether such Interest Rate Protection or

Other Hedging Agreement is now in existence or hereafter arising and the due

performance and compliance by Borrower with all of the terms, conditions and

agreements contained therein and (y) the US Bank Letter of Credit Facility up

to a maximum amount of $2,000,000 (provided that at no time shall there be more

than $2,000,000 under the US Bank Letter of Credit Facility secured by the

Security Documents) (all such obligations and liabilities described in this

clause (ii) being herein collectively called the “Other Obligations”);

(iii) any and all sums advanced by the Administrative Agent in order to

preserve the Collateral or preserve its security interest in the Collateral;

(iv) in the event of any proceeding for the collection or enforcement of

any indebtedness, obligations, or liabilities of Borrower referred to in

clauses (i) and (ii), after an Event of Default shall have occurred and be continuing,

the reasonable expenses of taking, holding, preparing for sale or lease,

selling or otherwise disposing of or realizing on the Collateral, or of any

exercise by the Administrative Agent of its rights hereunder, together with

reasonable attorneys’ fees and court costs; and (v) all amounts paid by any

Indemnitee as to which such Indemnitee has the right to reimbursement under Section

6.1 of this Agreement.  It is

acknowledged and agreed that the “Obligations” shall include extensions of

credit of the types described above, whether outstanding on the date of this

Agreement or extended from time to time after the date of this Agreement.

“Other

Creditors” shall have the meaning provided in the first paragraph of this

Agreement.

“Other

Obligations” shall have the meaning provided in the definition of

“Obligations” in this Article VI.

 “Permitted Filings” shall mean any

filing or similar item that is a matter of public record on the date of this

Agreement.

“Primary

Obligations” shall have the meaning provided in Section 4.4(b) of

this Agreement.

“Pro

Rata Share” shall have the meaning provided in Section 4.4(b) of

this Agreement.

“Proceeds”

shall have the meaning provided in the Uniform Commercial Code.

 “Representative” shall have the

meaning provided in Section 5.4(e) of this Agreement.

“Required

Secured Creditors” shall mean (i) the Required Lenders (or, to the extent

required by Article XI of the Credit Agreement, all of the Lenders)

under the Credit Agreement so long as any Credit Agreement Obligations remain

outstanding and (ii) in any situation not covered by preceding clause (i),

the holders of a majority of the outstanding principal amount of the Other

Obligations.

“Requisite

Creditors” shall have the meaning provided in Section 7.2 of this

Agreement.

“Secondary

Obligations” shall have the meaning provided in Section 4.4(b) of

this Agreement.

“Secured

Creditors” shall have the meaning provided in the first paragraph of this

Agreement.

 “Termination Date” shall have the

meaning provided in Section 7.9 of this Agreement.

“Uniform

Commercial Code” or “UCC” shall mean the Uniform Commercial Code as

now or hereafter in effect from time to time in the State of New York or any

other applicable jurisdiction.

“US

Bank Letter of Credit Facility” means that certain revolving letter of

credit facility in effect on the date hereof pursuant to that certain

Continuing Reimbursement Agreement for Commercial Letters of Credit, dated as

of July 14, 2000 by and among the LC Creditor and the Borrower providing for

commercial letters of credit; provided, however, that at no time

shall there be more than a maximum amount of $2,000,000 under the US Bank

Letter of Credit Facility secured by the Security Documents.

ARTICLE

VII

MISCELLANEOUS

 

7.1           Notices.  All such notices and communications

hereunder shall be sent or delivered in accordance with the terms of the Credit

Agreement.

 

7.2           Waiver; Amendment.  None of the terms and conditions of this

Agreement may be changed, waived, modified or varied in any manner whatsoever

unless in writing duly signed by Borrower and the Administrative Agent (with

the written consent of the Required Lenders, or to the extent required by Section

11.1 of the Credit Agreement, all the Lenders); provided, however,

that any change, waiver, modification or variance affecting the rights and

benefits of a single Class of Secured Creditors (and not all Secured Creditors

in a like or similar manner) shall require the written consent of the Requisite

Creditors of such affected Class.  For

the purpose of this Agreement, the term “Class” shall mean each class of

Secured Creditors, i.e., whether (i) the Bank Creditors as holders

of the Credit Agreement Obligations or (ii) the Other Creditors as the holders

of the Other Obligations; and the term “Requisite Creditors” of any

Class shall mean each of (A) with respect to the Credit Agreement Obligations,

the Required Lenders and (B) with respect to the Other Obligations, the holders

of at least a majority of all obligations outstanding from time to time under

the Interest Rate Protection Agreements or Other Hedging Agreements.

 

7.3           Obligations Absolute.  The obligations of Borrower hereunder shall

remain in full force and effect without regard to, and shall not be impaired

by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment,

composition, liquidation or the like of Borrower; (b) any exercise or

non-exercise, or any waiver of, any right, remedy, power or privilege under or

in respect of this Agreement, any other Loan Document or any Interest Rate

Protection or Other Hedging Agreement except as specifically set forth in a

waiver granted pursuant to Section 7.2 hereof; or (c) any amendment to

or modification of any Loan Document or any Interest Rate Protection or Other

Hedging Agreement or any security for any of the Obligations; whether or not

Borrower shall have notice or knowledge of any of the foregoing.

 

7.4           Successors and Assigns.  This Agreement shall be binding upon the

parties hereto and their respective successors and assigns and shall inure to

the benefit of the Administrative Agent, each Secured Creditor and Borrower and

their respective successors and assigns, provided that Borrower may not

transfer or assign any or all of its rights or obligations hereunder without

the written consent of the Required Secured Creditors.  All agreements, statements, representations

and warranties made by Borrower herein or in any certificate or other

instrument delivered by Borrower or on its behalf under this Agreement shall be

considered to have been relied upon by the Secured Creditors and shall survive

the execution and delivery of this Agreement, the other Loan Documents and the

Interest Rate Protection or Other Hedging Agreements regardless of any

investigation made by the Secured Creditors or on their behalf.

 

7.5           Headings Descriptive.  The headings of the several sections of this

Agreement are inserted for convenience only and shall not in any way affect the

meaning or construction of any provision of this Agreement.

 

7.6           Severability.  Any provision of this Agreement which is

prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,

be ineffective to the extent of such prohibition or unenforceability without

invalidating the remaining provisions hereof, and any such prohibition or

unenforceability in any jurisdiction shall not invalidate or render

unenforceable such provision in any other jurisdiction.

 

7.7           GOVERNING LAW.  THIS AGREEMENT SHALL BE DEEMED TO BE A

CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES

SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF SAID

STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

7.8           Borrower’s Duties.  It is expressly agreed, anything herein

contained to the contrary notwithstanding, that Borrower shall remain liable to

perform all of the obligations, if any, assumed by it with respect to the

Collateral and the Administrative Agent shall not have any obligations or

liabilities with respect to any Collateral by reason of or arising out of this

Agreement, nor shall the Administrative Agent be required or obligated in any

manner to perform or fulfill any of the obligations of Borrower under or with

respect to any Collateral.

 

7.9           Termination; Release.  (a)  After the Termination Date,

this Agreement shall automatically terminate (provided that all indemnities set

forth herein including, without limitation, in Section 5.1 hereof shall

survive such termination) and the Administrative Agent, at the request and

expense of Borrower, will execute and deliver to Borrower a proper instrument

or instruments (including Uniform Commercial Code termination statements on

form UCC-3) acknowledging the satisfaction and termination of this Agreement,

and will duly assign, transfer and deliver to Borrower (without recourse and

without any representation or warranty) such of the Collateral of Borrower and

as has not theretofore been sold or otherwise applied or released pursuant to

this Agreement.  As used in this

Agreement, “Termination Date” shall mean the date upon which the Total

Commitment and all Interest Rate Protection or Other Hedging Agreements have

been terminated, no Note under the Credit Agreement is outstanding (and all

Loans have been repaid in full), all Letters of Credit have been terminated and

all Obligations (as defined in the Credit Agreement) then outstanding (other

than any indemnities described in Section 5.1 hereof and in Section

11.4 of the Credit Agreement with respect to which no claim has been

asserted) have been paid in full in cash.

 

(b)           In the event that any part of the

Collateral is sold or otherwise disposed of in connection with a sale or other

disposition permitted by Section 8.7 of the Credit Agreement or is

otherwise released at the direction of the Required Lenders (or all the Lenders

if required by Section 11.1 of the Credit Agreement) and the proceeds of

such sale or sales or from such release are applied in accordance with the

provisions of Section 4.4 of the Credit Agreement, to the extent

required to be so applied, such Collateral will be sold free and clear of the

Liens created by this Agreement and the Administrative Agent, at the request

and expense of Borrower, will duly assign, transfer and deliver to Borrower

(without recourse and without any representation or warranty) such of the

Collateral as is then being (or has been) so sold or released and has not

theretofore been released pursuant to this Agreement.  The Administrative Agent shall also be entitled to and is hereby

authorized and directed to duly assign, transfer and deliver such of the

Collateral as provided in Section 11.20(b) of the Credit Agreement.

(c)           At any time that Borrower desires

that the Administrative Agent take any action to acknowledge or give effect to

any release of Collateral pursuant to the foregoing Section 7.9(a) or (b),

as the case may be, it shall deliver to the Administrative Agent a certificate

signed by an Authorized Officer stating that the release of the respective

Collateral is permitted pursuant to Section 7.9(a) or (b), as the case

may be.

(d)           The Administrative Agent shall have

no liability whatsoever to any Secured Creditor as a result of any release of

Collateral by it in accordance with this Section 7.9.

7.10         Counterparts.  This

Agreement may be executed in any number of counterparts and by the different

parties hereto on separate counterparts, each of which when so executed and

delivered shall be an original, but all of which shall together constitute one

and the same instrument.  A set of counterparts

executed by all the parties hereto shall be lodged with Borrower and the

Administrative Agent.

 

7.11         The Administrative Agent.  The Administrative Agent will hold in

accordance with this Agreement all items of the Collateral at any time received

under this Agreement.  It is expressly

understood and agreed by the parties hereto and each Secured Creditor, by

accepting the benefits of this Agreement, acknowledges and agrees that the

obligations of the Administrative Agent as holder of the Collateral and

interests therein and with respect to the disposition thereof, and otherwise

under this Agreement, are only those expressly set forth in this Agreement and

as provided in the Uniform Commercial Code in the State of New York.  The Administrative Agent shall act hereunder

on the terms and conditions set forth in Article IX and Section 11.18

of the Credit Agreement.

 

                7.12         US Bank.  (a) US Bank as LC Creditor under the US Bank Letter of Credit

Facility and in its capacity as a Secured Party hereunder hereby irrevocably

designates and appoints Bankers Trust Company as Administrative Agent under

this Agreement and irrevocably authorizes Bankers Trust Company to act as its

Administrative Agent and to take such action on its behalf under the provisions

of this Agreement and to exercise such powers and perform such duties as are

expressly delegated to the Administrative Agent under this Agreement and the

Loan Documents, together with such other powers as are reasonably incidental

thereto.  Notwithstanding any provision

to the contrary in this Agreement, the Administrative Agent shall not have any

duties or responsibilities with respect to US Bank in its capacity LC Creditor

under the US Bank Letter of Credit Facility or any fiduciary relationship with

US Bank, and no implied covenants, functions, responsibilities, duties,

obligations or liabilities shall be read into this Agreement or otherwise exist

against the Administrative Agent.

 

                (b)           For avoidance of doubt, US Bank

expressly acknowledges that all rights and remedies of the Administrative Agent

hereunder shall be exercised by the Administrative Agent in accordance with the

applicable provisions of the Credit Agreement, and no consent of, or notice to,

US Bank shall be required with respect thereto and US Bank shall not undertake

any separate action with respect to the Collateral.  The sole right of US Bank hereunder shall be to receive its

proportionate share of any proceeds received by the Administrative Agent

hereunder in accordance with the terms hereof.

 

 

 

[Signature Page Follows]

.                               IN WITNESS WHEREOF,

the parties hereto have caused this Agreement to be executed and delivered by

their duly authorized officers as of the date first above written.

 

 

	

   

  	

  BMC

  INDUSTRIES, INC.,

  
	

   

  	

  as

  Borrower

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  Kathleen P. Pepski

  
	

   

  	

  Name:

  

  	

  Kathleen

  P. Pepski

  
	

   

  	

  Title:   

  	

  Senior

  Vice President and

  
	

   

  	

   

  	

     Chief

  Financial Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BANKERS

  TRUST COMPANY,

  
	

   

  	

  as

  Administrative Agent

  
	

   

  	

   

  
	

   

  	

  By:   

  	

  /s/

  Robert Telesca

  
	

   

  	

  Name:

  	

  Robert

  Telesca

  
	

   

  	

  Title:    

  	

  Vice

  President

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  U.S.

  BANK NATIONAL ASSOCIATION

  
	

   

  	

   

  	

   

  
	

   

  	

  By:   

  	

  /s/

  William J. Umscheid

  
	

   

  	

  Name:  

  	

  William

  J. Umscheid

  
	

   

  	

  Title:    

  	

  Vice

  President

  

 

 

ANNEX A

to

Security

Agreement

SCHEDULE OF CHIEF

EXECUTIVE OFFICES

 

 

(a)

Chief Executive Office

                One Meridian Crossings, Suite

850

                Minneapolis, Minnesota 55423

 

(b)

State of Incorporation

Minnesota

 

 

 

 

 

ANNEX

B

to

Security

Agreement

SCHEDULE OF INVENTORY

 

AND EQUIPMENT LOCATIONS

 

ARTICLE VIII

 

Hennepin County, Minnesota

Ramsey County, Minnesota

Cortland County, New York

Onondaga County, New York

 

 

 

ANNEX

C

to

Security

Agreement

SCHEDULE OF TRADE,

FICTITIOUS AND OTHER NAMES

 

BMC Industries, Inc.                                                                           ID#:  41-0169210

BMC Industries

BMC

Vision-Ease Lens

Vision-Ease

Buckbee-Mears

Buckbee-Mears Cortland

Buckbee-Mears St. Paul

BMSP

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