Document:

Exhibit 10.13

 

 

CREDIT AGREEMENT

 

dated as of July 22, 2003,

 

 

among

 

 

TD FUNDING CORPORATION,

 

TD ACQUISITION CORPORATION,

 

THE LENDERS NAMED HEREIN,

 

and

 

CREDIT SUISSE FIRST BOSTON,

 

as Administrative Agent and
Collateral Agent

 

 

CREDIT SUISSE FIRST BOSTON

 

and

 

BANC OF AMERICA SECURITIES LLC,

 

as Joint Bookrunners and Joint
Lead Arrangers,

 

BANK OF AMERICA, N.A.,

 

as Syndication Agent,

 

and

 

UBS SECURITIES LLC

 

and

 

GENERAL ELECTRIC CAPITAL
CORPORATION,

 

as Documentation Agents

 

 

[CS&M Ref No. 5865-195]

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I

  
	
   

  
	
  DEFINITIONS

  
	
   

  	
   

  
	
  SECTION
  1.01.

  	
  Defined
  Terms

  	
  2

  
	
  SECTION
  1.02.

  	
  Terms
  Generally

  	
  23

  
	
  SECTION
  1.03.

  	
  Pro
  Forma Calculations

  	
  24

  
	
  SECTION
  1.04.

  	
  Classification
  of Loans and Borrowings

  	
  24

  
	
   

  	
   

  
	
  ARTICLE
  II

  
	
   

  	
   

  
	
  THE
  CREDITS

  
	
   

  	
   

  
	
  SECTION
  2.01.

  	
  Commitments

  	
  24

  
	
  SECTION
  2.02.

  	
  Loans

  	
  25

  
	
  SECTION
  2.03.

  	
  Borrowing
  Procedure

  	
  26

  
	
  SECTION
  2.04.

  	
  Evidence
  of Debt; Repayment of Loans

  	
  27

  
	
  SECTION
  2.05.

  	
  Fees

  	
  28

  
	
  SECTION
  2.06.

  	
  Interest
  on Loans

  	
  29

  
	
  SECTION
  2.07.

  	
  Default
  Interest

  	
  29

  
	
  SECTION
  2.08.

  	
  Alternate
  Rate of Interest

  	
  29

  
	
  SECTION
  2.09.

  	
  Termination
  and Reduction of Commitments

  	
  30

  
	
  SECTION
  2.10.

  	
  Conversion
  and Continuation of Borrowings

  	
  30

  
	
  SECTION
  2.11.

  	
  Repayment
  of Term Borrowings

  	
  31

  
	
  SECTION
  2.12.

  	
  Optional
  Prepayments

  	
  32

  
	
  SECTION
  2.13.

  	
  Mandatory
  Prepayments

  	
  33

  
	
  SECTION
  2.14.

  	
  Reserve
  Requirements; Change in Circumstances

  	
  34

  
	
  SECTION
  2.15.

  	
  Change
  in Legality

  	
  35

  
	
  SECTION
  2.16.

  	
  Indemnity

  	
  36

  
	
  SECTION
  2.17.

  	
  Pro
  Rata Treatment

  	
  37

  
	
  SECTION
  2.18.

  	
  Sharing
  of Setoffs

  	
  37

  
	
  SECTION
  2.19.

  	
  Payments

  	
  37

  
	
  SECTION
  2.20.

  	
  Taxes

  	
  38

  
	
  SECTION
  2.21.

  	
  Assignment
  of Commitments Under Certain Circumstances; Duty to Mitigate

  	
  39

  
	
  SECTION
  2.22.

  	
  Swingline
  Loans

  	
  40

  
	
  SECTION
  2.23.

  	
  Letters
  of Credit

  	
  41

  
	
  SECTION
  2.24.

  	
  Increase
  in Term Loan Commitments

  	
  45

  

 

 

	
  ARTICLE
  III

  
	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  
	
   

  	
   

  
	
  SECTION
  3.01.

  	
  Organization;
  Powers

  	
  47

  
	
  SECTION
  3.02.

  	
  Authorization

  	
  47

  
	
  SECTION
  3.03.

  	
  Enforceability

  	
  47

  
	
  SECTION
  3.04.

  	
  Governmental
  Approvals

  	
  48

  
	
  SECTION
  3.05.

  	
   Financial Statements

  	
  48

  
	
  SECTION
  3.06.

  	
  No
  Material Adverse Change

  	
  49

  
	
  SECTION
  3.07.

  	
  Title
  to Properties; Possession Under Leases

  	
  49

  
	
  SECTION
  3.08.

  	
  Subsidiaries

  	
  49

  
	
  SECTION
  3.09.

  	
  Litigation;
  Compliance with Laws

  	
  49

  
	
  SECTION
  3.10.

  	
  Agreements

  	
  50

  
	
  SECTION
  3.11.

  	
  Federal
  Reserve Regulations

  	
  50

  
	
  SECTION
  3.12.

  	
  Investment
  Company Act; Public Utility Holding Company Act

  	
  50

  
	
  SECTION
  3.13.

  	
  Use
  of Proceeds

  	
  50

  
	
  SECTION
  3.14.

  	
  Tax
  Returns

  	
  50

  
	
  SECTION
  3.15.

  	
  No
  Material Misstatements

  	
  50

  
	
  SECTION
  3.16.

  	
  Employee
  Benefit Plans

  	
  51

  
	
  SECTION
  3.17.

  	
  Environmental
  Matters

  	
  51

  
	
  SECTION
  3.18.

  	
  Insurance

  	
  51

  
	
  SECTION
  3.19.

  	
  Security
  Documents

  	
  51

  
	
  SECTION
  3.20.

  	
  Location
  of Real Property and Leased Premises

  	
  52

  
	
  SECTION
  3.21.

  	
  Labor
  Matters

  	
  52

  
	
  SECTION
  3.22.

  	
  Solvency

  	
  53

  
	
  SECTION
  3.23. 

  	
  Representations
  and Warranties in Transaction Documents

  	
  53

  
	
  SECTION
  3.24. 

  	
  Senior
  Indebtedness

  	
  53

  
	
  SECTION
  3.25.

  	
  Certain
  Treasury Regulation Matters

  	
  53

  
	
   

  	
   

  
	
  ARTICLE
  IV

  
	
   

  	
   

  
	
  CONDITIONS OF LENDING

  
	
   

  	
   

  
	
  SECTION
  4.01.

  	
  All
  Credit Events

  	
  53

  
	
  SECTION
  4.02.

  	
  First
  Credit Event

  	
  54

  
	
   

  	
   

  
	
  ARTICLE
  V

  
	
   

  	
   

  
	
  AFFIRMATIVE COVENANTS

  
	
   

  	
   

  
	
  SECTION
  5.01.

  	
  Existence;
  Businesses and Properties

  	
  57

  
	
  SECTION
  5.02.

  	
  Insurance

  	
  58

  
	
  SECTION
  5.03.

  	
  Taxes

  	
  59

  
	
  SECTION
  5.04.

  	
  Financial
  Statements, Reports, etc

  	
  59

  
				

 

ii

 

	
  SECTION
  5.05.

  	
  Litigation
  and Other Notices

  	
  61

  
	
  SECTION
  5.06.

  	
  Information
  Regarding Collateral

  	
  61

  
	
  SECTION
  5.07.

  	
  Maintaining
  Records; Access to Properties and Inspections

  	
  62

  
	
  SECTION
  5.08.

  	
  Use
  of Proceeds

  	
  62

  
	
  SECTION
  5.09.

  	
  Further
  Assurances

  	
  62

  
	
  SECTION
  5.10.

  	
  Certain
  Treasury Regulation Matters

  	
  63

  
	
   

  	
   

  
	
  ARTICLE
  VI

  
	
   

  	
   

  
	
  NEGATIVE COVENANTS

  
	
   

  	
   

  
	
  SECTION
  6.01.

  	
  Indebtedness

  	
  63

  
	
  SECTION
  6.02.

  	
  Liens

  	
  65

  
	
  SECTION
  6.03.

  	
  Sale
  and Lease-Back Transactions

  	
  67

  
	
  SECTION
  6.04.

  	
  Investments,
  Loans and Advances

  	
  67

  
	
  SECTION
  6.05.

  	
  Mergers,
  Consolidations, Sales of Assets and Acquisitions

  	
  69

  
	
  SECTION
  6.06.

  	
  Restricted
  Payments; Restrictive Agreements

  	
  69

  
	
  SECTION
  6.07.

  	
  Transactions
  with Affiliates

  	
  71

  
	
  SECTION
  6.08.

  	
  Business
  of Holdings, Borrower and Subsidiaries

  	
  72

  
	
  SECTION
  6.09.

  	
  Other
  Indebtedness

  	
  72

  
	
  SECTION
  6.10.

  	
  Capital
  Expenditures

  	
  72

  
	
  SECTION
  6.11.

  	
  Interest
  Coverage Ratio

  	
  73

  
	
  SECTION
  6.12.

  	
  Fixed
  Charge Coverage Ratio

  	
  73

  
	
  SECTION
  6.13.

  	
  Maximum
  Leverage Ratio

  	
  73

  
	
  SECTION
  6.14.

  	
  Fiscal
  Year

  	
  73

  
	
   

  	
   

  
	
  ARTICLE
  VII

  
	
   

  	
   

  
	
  EVENTS OF DEFAULT

  
	
   

  	
   

  
	
  ARTICLE
  VIII

  
	
   

  	
   

  
	
  THE ADMINISTRATIVE AGENT AND THE COLLATERAL
  AGENT

  
	
   

  	
   

  
	
  ARTICLE
  IX

  
	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  SECTION
  9.01.

  	
  Notices

  	
  79

  
	
  SECTION
  9.02.

  	
  Survival
  of Agreement

  	
  79

  
	
  SECTION
  9.03.

  	
  Binding
  Effect

  	
  80

  
	
  SECTION
  9.04.

  	
  Successors
  and Assigns

  	
  80

  
	
  SECTION
  9.05.

  	
  Expenses;
  Indemnity

  	
  84

  
	
  SECTION
  9.06.

  	
  Right
  of Setoff

  	
  85

  

 

iii

 

	
  SECTION
  9.07.

  	
  Applicable
  Law

  	
  85

  
	
  SECTION
  9.08.

  	
  Waivers;
  Amendment

  	
  85

  
	
  SECTION
  9.09.

  	
  Interest
  Rate Limitation

  	
  87

  
	
  SECTION
  9.10.

  	
  Entire
  Agreement

  	
  87

  
	
  SECTION
  9.11.

  	
  WAIVER
  OF JURY TRIAL

  	
  87

  
	
  SECTION
  9.12.

  	
  Severability

  	
  87

  
	
  SECTION
  9.13.

  	
  Counterparts

  	
  88

  
	
  SECTION
  9.14.

  	
  Headings

  	
  88

  
	
  SECTION
  9.15.

  	
  Jurisdiction;
  Consent to Service of Process

  	
  88

  
	
  SECTION
  9.16.

  	
  Confidentiality

  	
  88

  

 

	
  Schedules

  	
   

  
	
   

  	
   

  
	
  Schedule
  1.01(a)

  	
  Subsidiary
  Guarantors

  
	
  Schedule
  1.01(b)

  	
  Mortgaged
  Properties

  
	
  Schedule
  2.01

  	
  Lenders and
  Commitments

  
	
  Schedule
  2.23(b)

  	
  Closing Date
  Letter of Credit

  
	
  Schedule
  3.02

  	
  Authorizations

  
	
  Schedule
  3.04

  	
  Governmental
  Approvals

  
	
  Schedule
  3.05(a)

  	
  Material
  Liabilities Not Reflected in Balance Sheet

  
	
  Schedule
  3.08

  	
  Subsidiaries

  
	
  Schedule
  3.09

  	
  Litigation

  
	
  Schedule
  3.17

  	
  Environmental
  Matters

  
	
  Schedule
  3.18

  	
  Insurance

  
	
  Schedule
  3.19(a)

  	
  Filing
  Offices

  
	
  Schedule
  3.19(d)

  	
  Mortgage
  Filing Offices

  
	
  Schedule
  3.20(a)

  	
  Owned
  Property

  
	
  Schedule
  3.20(b)

  	
  Leased
  Property

  
	
  Schedule
  4.02(a)

  	
  Other Local
  Counsel

  
	
  Schedule
  6.01

  	
  Outstanding
  Indebtedness on Closing Date

  
	
  Schedule
  6.02

  	
  Liens
  Existing on Closing Date

  
	
  Schedule
  6.04

  	
  Existing
  Investments

  
	
  Schedule
  6.07

  	
  Transactions
  with Affiliates

  
	
   

  	
   

  
	
  Exhibits

  	
   

  
	
   

  	
   

  
	
  EXHIBIT A

  	
  Form of
  Administrative Questionnaire

  
	
  EXHIBIT B

  	
  Form of
  Assignment and Acceptance

  
	
  EXHIBIT C

  	
  Form of
  Borrowing Request

  
	
  EXHIBIT D

  	
  Form of
  Guarantee and Collateral Agreement

  
	
  EXHIBIT E

  	
  Form of
  Perfection Certificate

  
	
  EXHIBIT F-1

  	
  Form of
  Opinion of Willkie Farr & Gallagher

  
	
  EXHIBIT F-2

  	
  Form of
  Local Counsel Opinion

  
	
  EXHIBIT G

  	
  Form of
  Mortgage

  

 

iv

 

CREDIT AGREEMENT dated as of July 22, 2003, among TD FUNDING
CORPORATION, a Delaware corporation (the “Borrower”), TD ACQUISITION CORPORATION, a
Delaware corporation and the direct parent corporation of the Borrower (“Holdings”),
the Lenders (as defined in Article I), and CREDIT SUISSE FIRST BOSTON, a bank
organized under the laws of Switzerland (“CSFB”), as administrative agent (in such
capacity, the “Administrative Agent”) and as collateral agent (in such
capacity, the “Collateral Agent”) for the Lenders.

 

TD Holding
Corporation, a Delaware corporation and the owner on the Closing Date (such
term and each other capitalized term used but not defined in this introductory
statement having the meaning given it in Article I) of all the issued and
outstanding capital stock of Holdings (“Parent”), will acquire (the “Acquisition”)
all the capital stock of TransDigm Holding Company, a Delaware corporation (“TransDigm
Holdings”) and TransDigm Inc., a Delaware corporation and a wholly
owned subsidiary of TransDigm Holdings (“TransDigm”), pursuant to an Agreement and
Plan of Merger dated as of June 6, 2003 (the “Merger Agreement”), between
Holdings and TransDigm Holdings. 
Pursuant to the Merger Agreement, Holdings will be merged with and into
TransDigm Holdings, with TransDigm Holdings continuing as the surviving
corporation in such merger and, immediately thereafter, the Borrower will be
merged with and into TransDigm, with TransDigm continuing as the surviving
corporation in such merger (such mergers, collectively, the “Merger”).  Upon the effectiveness of the Merger,
(a) TransDigm Holdings will succeed to all rights and obligations of
Holdings by operation of law and all references herein and in the other Loan
Documents to the term “Holdings” shall thereupon be deemed to be references to
TransDigm Holdings and (b) TransDigm will succeed to all rights and
obligations of the Borrower by operation of law and all references herein and
in the other Loan Documents to the term “Borrower” shall thereupon be deemed to
be references to TransDigm.  In
connection with the Merger, subject to adjustment as provided in the Merger
Agreement, the outstanding shares of common stock and stock options of
TransDigm Holdings will be converted into the right to receive an aggregate
amount of approximately $797,344,853 (subject to downward adjustment as set
forth in the Merger Agreement, taking into account Transaction Costs (as
defined in the Merger Agreement)) in cash (the “Common Merger Consideration”)
and the existing shares of 16% cumulative redeemable preferred stock of
TransDigm Holdings will be converted into the right to receive an aggregate
amount of approximately $20,408,000 (plus accrued and unpaid dividends thereon
after June 1, 2003) in cash (the “Preferred Merger Consideration”).

 

The Borrower
has requested the Lenders to extend credit in the form of (a) Term Loans
on the Closing Date, in an aggregate principal amount not in excess of
$295,000,000, and (b) Revolving Loans at any time and from time to time
prior to the Revolving Credit Maturity Date, in an aggregate principal amount
at any time outstanding not in excess of $100,000,000.  The Borrower has requested the Swingline
Lender to extend credit, at any time and from time to time prior to the
Revolving Credit Maturity Date, in the form of Swingline Loans, in an aggregate
principal amount at any time outstanding not in excess of $5,000,000.  The Borrower has requested the Issuing Bank
to issue Letters of Credit, in an aggregate face amount at any time outstanding
not in excess of $15,000,000, to support payment obligations of the Borrower
and its Subsidiaries.  The proceeds of
the Term Loans are to be used solely (a) to pay the Common

 

 

Merger Consideration, (b) to pay the Preferred Merger
Consideration, (c) to repay all amounts outstanding and due under the
Existing Credit Agreement, (d) to finance the Debt Tender Offer and the
Defeasance and (e) to pay fees and expenses incurred in connection with
the Transactions in an aggregate amount not to exceed $50,000,000.  The proceeds of the Revolving Loans and the Swingline
Loans are to be used for general corporate purposes, including to finance
Permitted Acquisitions.

 

The Lenders
are willing to extend such credit to the Borrower and the Issuing Bank is
willing to issue Letters of Credit for the account of the Borrower on the terms
and subject to the conditions set forth herein.  Accordingly, the parties hereto agree as follows:

 

ARTICLE I

 

Definitions

 

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

 

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

 

“Acquired
EBITDA” of any Acquired Entity for any period shall mean the
consolidated “EBITDA” of such Acquired Entity calculated on a basis consistent
with the calculation of Consolidated EBITDA under this Agreement and reasonably
approved by the Administrative Agent.

 

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

 

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

 

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

 

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

 

“Affiliate”
shall mean, when used with respect to a specified person, another person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the person specified; provided,
however, that, for purposes of Section 6.07, the term “Affiliate” shall also include any person
that directly or indirectly owns 5% or more of any class of Equity Interests of
the person specified or that is an officer or director of the person specified.

 

2

 

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

 

 “Alternate Base Rate” shall mean, for any
day, a rate per annum equal to the greater of (a) the Prime Rate in effect
on such day and (b) the Federal Funds Effective Rate in effect on such day plus
1⁄2 of 1%.  If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence until the circumstances
giving rise to such inability no longer exist. 
Any change in the Alternate Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective on the effective date of
such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.

 

“Applicable
Percentage” shall mean, for any day, with respect to any Eurodollar
Loan or ABR Loan, as the case may be, the applicable percentage set forth below
under the caption “Eurodollar Spread–Term Loans”, “ABR Spread–Term Loans”,
“Eurodollar Spread–Revolving Loans” or “ABR Spread–Revolving Loans”, as the
case may be, based upon the Leverage Ratio as of the relevant date of
determination:

 

	
  Leverage Ratio

  	
   

  	
  Eurodollar

  Spread–

  Term

  Loans

  	
   

  	
  ABR

  Spread–

  Term

  Loans

  	
   

  	
  Eurodollar

  Spread–

  Revolving

  Loans

  	
   

  	
  ABR

  Spread–

  Revolving

  Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  or equal to 4.75 to 1.00

  	
   

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  or equal to 4.25 to 1.00, but less than 4.75 to 1.00

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  or equal to 3.25 to 1.00, but less than 4.25 to 1.00

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  

 

3

 

	
  Leverage Ratio

  	
   

  	
  Eurodollar

  Spread–

  Term

  Loans

  	
   

  	
  ABR

  Spread–

  Term

  Loans

  	
   

  	
  Eurodollar

  Spread–

  Revolving

  Loans

  	
   

  	
  ABR

  Spread–

  Revolving

  Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than
  or equal to 2.75 to 1.00, but less than 3.25 to 1.00

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  	
  3.00

  	
  %

  	
  2.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Category 5

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than
  2.75 to 1.00

  	
   

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  	
  2.75

  	
  %

  	
  1.75

  	
  %

  

 

Each change in
the Applicable Percentage resulting from a change in the Leverage Ratio shall
be effective with respect to all Loans and Letters of Credit outstanding on and
after the date of delivery to the Administrative Agent of the financial
statements and certificates required by Section 5.04(a) or (b) and
Section 5.04(d), respectively, indicating such change, and until the date
immediately preceding the next date of delivery of such financial statements
and certificates indicating another such change.  Notwithstanding the foregoing, until the Borrower shall have
delivered the financial statements and certificates required by
Section 5.04(b) and Section 5.04(d), respectively, for the fiscal
period ended on or about December 31, 2003, the Leverage Ratio shall be deemed
to be in Category 1 for purposes of determining the Applicable Percentage. In
addition, (a) at any time during which the Borrower has failed to deliver the
financial statements and certificates required by Section 5.04(a) or (b)
and Section 5.04(d), respectively, or (b) at any time after the occurrence
and during the continuance of an Event of Default, the Leverage Ratio shall be
deemed to be in Category 1 for purposes of determining the Applicable
Percentage.

 

“Asset Sale”
shall mean the sale, transfer or other disposition (by way of merger, casualty,
condemnation or otherwise but excluding investments permitted by Section 6.04)
by Holdings, the Borrower or any of the Subsidiaries to any person other than
the Borrower or any Subsidiary Guarantor of (a) any Equity Interests of any of
the Subsidiaries (other than directors’ qualifying shares or the sale by any
person of Equity Interests of such person) or (b) any other assets of Holdings,
the Borrower or any of the Subsidiaries (other than (i) inventory, damaged,
obsolete or worn out assets, scrap and Permitted Investments, in each case
disposed of in the ordinary course of business, or (ii) dispositions
between or among Foreign Subsidiaries), provided that any asset sale or series of
related asset sales described in clause (b) above having a value not in excess
of $500,000 shall be deemed not to be an “Asset
Sale” for purposes of this Agreement.

 

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

 

4

 

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

 

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

 

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

 

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

 

“Capital
Expenditures” shall mean, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Borrower
and its consolidated Subsidiaries that are (or should be) set forth in a
consolidated statement of cash flows of the Borrower for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations or Synthetic Lease
Obligations incurred by the Borrower and its consolidated Subsidiaries during
such period, but excluding in each case any such expenditure made (i) to
restore, replace or rebuild property to the condition of such property
immediately prior to any damage, loss, destruction or condemnation of such
property, to the extent such expenditure is made with insurance proceeds,
condemnation awards or damage recovery proceeds relating to any such damage,
loss, destruction or condemnation or (ii) as the purchase price of any
Permitted Acquisition.

 

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

 

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

 

(a)  prior to the initial Public Equity Offering,
the Permitted Investors shall fail to beneficially own, directly or indirectly,
Equity Interests in Holdings representing at least 51% of the aggregate
ordinary voting power represented by the issued and outstanding Equity
Interests of Holdings;

 

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

 

5

 

“person” or “group” exceeds the percentage of ordinary voting power
owned by the Permitted Investors;

 

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

 

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

 

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

 

“Change in
Law” shall mean (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender
or the Issuing Bank (or, for purposes of Section 2.14, by any lending
office of such Lender or by such Lender’s or Issuing Bank’s holding company, if
any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the date of this
Agreement.

 

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

 

“Closing Date”
shall mean July 22, 2003.

 

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

 

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

 

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

 

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

 

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

 

“Consolidated
EBITDA” shall mean, for any period, Consolidated Net Income for such
period plus (a) without duplication and to the extent deducted in determining
such Consolidated Net Income, the sum of (i) Consolidated Interest Expense
for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and

 

6

 

amortization for such period, (iv) any non-recurring fees, cash
charges and other cash expenses made or incurred in connection with the
Transactions that are paid or otherwise accounted for within 180 days of the
consummation of the Transactions, (v) any extraordinary losses,
(vi) (A) facilities relocation or closing costs, (B) non-recurring
restructuring costs and (C) integration costs and fees, including cash
severance costs, in connection with Permitted Acquisitions, in each case
incurred during such period and payable in cash, in an aggregate amount under
this clause (vi) not to exceed $12,000,000, (vii) integration costs
and fees, including cash severance costs, in connection with the Norco
Acquisition in an amount not to exceed $6,000,000, (viii) a charge in any
one period not to exceed $5,000,000 resulting from repurchases of inventory
from distributors during such period, (ix) job loss reserves under AICPA SOP
81-1 established during such period, (x) changes in the fair value of financial
instruments, including derivatives, during such period, (xi) amortization and
impairment charges resulting from purchase accounting adjustments (including
inventory step-up adjustments recognized in costs of sales), (xii) any non-cash
compensation charges and deferred compensation charges, including arising from
stock options, taken during such period and (xiii) any other non-cash charges
(other than the write-down of current assets) for such period, and minus (b) without
duplication (i) all cash payments made during such period on account of
non-cash charges added to Consolidated Net Income pursuant to clauses (a)(ix),
(x), (xii) or (xiii) above in such period or in a previous period and
(ii) to the extent included in determining such Consolidated Net Income,
any extraordinary gains and all non-cash items of income (other than normal
accruals in the ordinary course of business) for such period, all determined on
a consolidated basis in accordance with GAAP.

 

“Consolidated
Fixed Charges” shall mean, for any period, without duplication, the
sum of (a) Consolidated Interest Expense for such period, (b) the aggregate
amount of scheduled principal payments made during such period in respect of
long term Indebtedness of the Borrower and the Subsidiaries (other than
payments made by the Borrower or any Subsidiary to the Borrower or a
Subsidiary) and (c) the aggregate amount of Tax Payments made in cash by the
Borrower and the Subsidiaries during such period.

 

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

 

“Consolidated
Net Income” shall mean, for any period, the net income or loss of
the Borrower and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP (adjusted to reflect any charge, tax or expense
incurred or accrued by Holdings during such period as though such charge, tax
or expense had been incurred by the Borrower, to the extent that the Borrower
has made or would be entitled under the Loan Documents to make any payment to
or for the account of Holdings in respect thereof); provided that there shall be

 

7

 

excluded (a) the income of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by the Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, statute, rule or
governmental regulation applicable to such Subsidiary, (b) the income or loss
of any person accrued prior to the date it becomes a Subsidiary or is merged
into or consolidated with the Borrower or any Subsidiary or the date that such
person’s assets are acquired by the Borrower or any Subsidiary, (c) the income
of any person in which any other person (other than the Borrower or a wholly
owned Subsidiary or any director holding qualifying shares in accordance with
applicable law) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the Borrower or a wholly
owned Subsidiary by such person during such period and (d) any gains
attributable to sales of assets out of the ordinary course of business.

 

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

 

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

 

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

 

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

 

“Debt Tender Offer”
shall mean the tender offer and consent solicitation in respect of all
outstanding Existing Subordinated Notes.

 

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

 

“Defeasance”
shall mean the defeasance of the Existing Subordinated Notes in accordance with
the terms of the indenture under which they were issued.

 

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

 

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

 

“Environmental
Laws” shall mean all former, current and future Federal, state,
local and foreign laws (including common law), treaties, regulations, rules,
ordinances, codes, decrees, judgments, directives having the force of law and
orders (including consent orders), in each case, relating to protection of the
environment, natural resources, human health and safety or the presence,
Release of, or exposure to, Hazardous Materials, or the generation,
manufacture,

 

8

 

processing, distribution, use, treatment, storage, transport, recycling
or handling of, or the arrangement for such activities with respect to,
Hazardous Materials.

 

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

 

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

 

“Equity
Issuance” shall mean any issuance or sale by Holdings, the Borrower
or any of their respective subsidiaries of any Equity Interests of Holdings,
the Borrower or any such subsidiary, as applicable, except in each case for
(a) any issuance of Equity Interests by Holdings, to the extent the net
proceeds thereof are used to finance a Permitted Acquisition, (b) any
issuance or sale to Holdings, the Borrower or any Subsidiary, (c) any
issuance of directors’ qualifying shares, (d) sales or issuances of common
stock of Holdings to management or employees of Holdings, the Borrower or any
Subsidiary under any employee stock option or stock purchase plan or employee
benefit plan in existence from time to time and (e) any issuance of Permitted
Cure Securities.

 

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

 

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

 

“ERISA Event”
shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA
or the regulations issued thereunder, with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the Borrower
or any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan or the withdrawal or partial withdrawal
of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer
Plan; (e) the receipt by the Borrower or any of its ERISA Affiliates from the
PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the adoption of any amendment to a Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or

 

9

 

Section 307 of ERISA; (g) the receipt by the Borrower or any of
its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan
from the Borrower or any of its ERISA Affiliates of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (h) the occurrence of a “prohibited transaction” with
respect to which Holdings, the Borrower, any of the Subsidiaries or any ERISA
Affiliate is a “disqualified person” (within the meaning of Section 4975
of the Code) or with respect to which Holdings, the Borrower or any such
Subsidiary or ERISA Affiliate could otherwise be liable; or (i) any other event
or condition with respect to a Plan or Multiemployer Plan that could result in
liability of the Borrower or any ERISA Affiliate.

 

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

 

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

 

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

 

“Excluded
Taxes” shall mean, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.21(a)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender’s failure

 

10

 

to comply with Section 2.20(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.20(a).

 

“Existing Credit Agreement” shall mean the
Amended and Restated Credit Agreement dated as of December 3, 1998 and amended
and restated as of May 31, 2001, among Holdings, the Borrower, the various
lending institutions from time to time party thereto, Credit Suisse First
Boston, as syndication agent, Bankers Trust Company, as administrative agent,
and Deutsche Banc Alex. Brown Inc. and Credit Suisse First Boston, as joint
lead arrangers and joint bookrunners.

 

“Existing Subordinated Notes”
shall mean the Borrower’s 10-3/8% Senior Subordinated
Notes due 2008.

 

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

 

“Fee Letter”
shall mean the Fee Letter dated June 6, 2003, between Holdings and the
Administrative Agent.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

“Guarantee and Collateral Agreement” shall
mean the Guarantee and Collateral Agreement, substantially in the form of
Exhibit D, among the Borrower, Holdings, the Subsidiaries party thereto and the
Collateral Agent.

 

“Guarantors”
shall mean Holdings and the Subsidiary Guarantors.

 

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

 

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

 

“Holdings Common Equity Contribution” shall
mean the contribution by the Permitted Investors or Parent of $471,300,000 of
cash to Holdings in the form of common equity, which cash shall be contributed
to the Borrower as common equity.

 

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

 

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

 

“Incremental
Term Loan Amount” shall mean, at any time, the excess, if any, of
(a) $200,000,000 over (b) the aggregate amount of all Incremental Term
Loan Commitments established prior to such time pursuant to Section 2.24.

 

“Incremental
Term Loan Assumption Agreement” shall mean an Incremental Term Loan
Assumption Agreement in form and substance reasonably satisfactory to the
Administrative

 

12

 

Agent, among the Borrower, the Administrative Agent and one or more
Incremental Term Lenders.

 

“Incremental
Term Loan Commitment” shall mean the commitment of any Lender,
established pursuant to Section 2.24, to make Incremental Term Loans to
the Borrower.

 

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

 

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

 

“Incremental
Term Loans” shall mean Term Loans made by one or more Lenders to the
Borrower pursuant to Section 2.01(b). 
Incremental Term Loans may be made in the form of additional Term Loans
or, to the extent permitted by Section 2.24 and provided for in the
relevant Incremental Term Loan Assumption Agreement, Other Term Loans.

 

“Indebtedness”
of any person shall mean, without duplication, (a) all obligations of such
person for borrowed money, (b) all obligations of such person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
person under conditional sale or other title retention agreements relating to
property or assets purchased by such person, (d) all obligations of such person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (e) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed (it
being understood that, unless such person shall have assumed such obligations,
the amount of such Indebtedness shall be the lesser of (x) the fair market
value of the property securing such Indebtedness and (y) the stated principal
amount of such Indebtedness), (f) all Guarantees by such person of Indebtedness
of others, (g) all Capital Lease Obligations and Synthetic Lease Obligations of
such person, (h) all obligations of such person as an account party in respect
of letters of credit, (i) all obligations of such person in respect of
bankers’ acceptances and (j) all obligations of such person under or in
respect of Hedging Agreements.  For
purposes of determining the amount of Indebtedness of any person under clause
(j) of the preceding sentence, the amount of the obligations of such person in
respect of any Hedging Agreement at any time shall be zero prior to the time
any counterparty to such Hedging Agreement shall be entitled to terminate such
Hedging Agreement and, thereafter, shall be the maximum aggregate amount
(giving effect to any netting agreements) that such person would be required to
pay if such Hedging Agreement were terminated at such time.  The Indebtedness of any person shall include
the Indebtedness of any partnership in which such person is a general partner
only to the extent such person is liable therefor by contract, as a matter of
law or otherwise, and shall not include any Indebtedness of such partnership
that is expressly non-recourse to such person. 
For clarification purposes, (a) the liability of the Borrower or any
Subsidiary Guarantor to make any periodic payments to licensors in
consideration for the license of patents and technical information under
license agreements in existence on the Closing Date and any amount payable

 

13

 

in respect of a settlement of disputes with respect to such payments
thereunder, shall not constitute Indebtedness and (b) Indebtedness incurred
under Section 6.01(m) shall not be included in the computations under Sections
6.11, 6.12 or 6.13.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

Revolving Credit Lender at any time shall equal its Pro Rata Percentage
of the aggregate L/C Exposure at such time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Material
Adverse Effect” shall mean (a) a materially adverse effect on the
business, operations, assets, liabilities, financial condition or results of
operations of Holdings, the

 

15

 

Borrower and the Subsidiaries, taken as a whole, (b) a material impairment
of the ability of the Borrower or any other Loan Party to perform any of its
obligations under any Loan Document to which it is or will be a party or (c) a
material impairment of the rights of or benefits available to the Lenders under
any Loan Document.

 

“Material
Indebtedness” shall mean Indebtedness (other than the Loans and
Letters of Credit) of any one or more of Holdings, the Borrower and the
Subsidiaries in an aggregate principal amount exceeding $5,000,000.

 

“Mortgaged
Properties” shall mean, initially, the real properties owned or
leased by the Loan Parties specified on Schedule 1.01(b), and shall include
each parcel of real property and improvements thereto with respect to which a
Mortgage is granted pursuant to Section 5.09.

 

“Mortgages”
shall mean the mortgages, deeds of trust, leasehold mortgages, assignments of
leases and rents, modifications and other security documents delivered pursuant
to clause (i) of Section 4.02(h) or pursuant to Section 5.09, each
substantially in the form of Exhibit G.

 

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

 

“Net Cash
Proceeds” shall mean (a) with respect to any Asset Sale, the cash
proceeds (including cash proceeds subsequently received (as and when received)
in respect of noncash consideration initially received), net of (i) selling
expenses (including reasonable broker’s and investment banking fees or
commissions, legal, environmental assessment, appraisal and consultant’s fees,
transfer and similar taxes and the Borrower’s good faith estimate of income
taxes paid or payable in connection with such sale), (ii) amounts provided as a
reserve, in accordance with GAAP, against any liabilities under any
indemnification obligations or purchase price adjustment associated with such
Asset Sale (provided
that, to the extent and at the time any such amounts are released from such
reserve, such amounts shall constitute Net Cash Proceeds) and (iii) the
principal amount, premium or penalty, if any, interest and other amounts on any
Indebtedness for borrowed money which is secured by the asset sold in such
Asset Sale and which is required to be repaid with such proceeds (other than
any such Indebtedness assumed by the purchaser of such asset); provided,
however,
that, if (x) the Borrower shall deliver a certificate of a Financial Officer to
the Administrative Agent at the time of receipt thereof setting forth the
Borrower’s intent to reinvest such proceeds in productive assets of a kind used
or useful in the business of the Borrower and its Subsidiaries within
270 days of receipt of such proceeds and (y) no Default or Event of
Default shall have occurred and shall be continuing at the time of such
certificate or at the proposed time of the application of such proceeds, such proceeds
shall not constitute Net Cash Proceeds except to the extent not so used or
contractually committed to be used at the end of such 270-day
period, at which time such proceeds shall be deemed to be Net Cash Proceeds;
and (b) with respect to any issuance or disposition of Indebtedness or any
Equity Issuance, the cash proceeds thereof, net of all taxes and customary
fees, commissions, costs and other expenses incurred in connection therewith.

 

“Norco
Acquisition” shall mean the acquisition by the Borrower of Norco,
Inc., a division of TransTechnology Corporation, which was completed on
February 24, 2003.

 

16

 

“Obligations”
shall mean all obligations defined as “Obligations” in the Guarantee and
Collateral Agreement and the other Security Documents.

 

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

 

“Other Term
Loans” shall have the meaning assigned to such term in
Section 2.24.

 

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

 

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

 

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

 

“Permitted
Investments” shall mean:

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

“Plan”
shall mean any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 302 of ERISA, and in respect of which the Borrower or any
ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

 

“Prime Rate” shall mean the rate of interest per annum determined from time
to time by Credit Suisse First Boston as its prime rate in effect at its
principal office in New York City.

 

“Pro Forma Basis”
shall mean, with respect to compliance with any test or covenant hereunder,
compliance with such covenant or test after giving effect to any proposed
Permitted Acquisition or Asset Sale (including pro forma adjustments arising
out of events which are directly attributable to the proposed Permitted
Acquisition or Asset Sale, are factually supportable and are expected to have a
continuing impact, in each case as reasonably determined by the Borrower and as
certified by a Financial Officer of the Borrower and approved by the
Administrative Agent) using, for purposes of determining such compliance, the
historical financial statements of all entities or assets so acquired or sold
or to be acquired or sold and the consolidated financial statements of the
Borrower and its Subsidiaries which shall be reformulated as if such Permitted
Acquisitions or Asset Sale, and all other Permitted Acquisitions or Asset Sales
that have been consummated during the period, and any Indebtedness or other
liabilities incurred in connection with any such Permitted Acquisitions had
been consummated and incurred at the beginning of such period.  For purposes of determining compliance with
the covenants set forth in Sections 6.11, 6.12 and 6.13 (and the computations
made for purposes of determining the Applicable Percentage), all calculations
shall be made on a Pro Forma Basis after giving effect to the Norco Acquisition
and the Transactions, treating each as if it were a Permitted Acquisition
(subject, in the case of the Transactions, to the limitations contained in
clause (a)(iv) of the definition of Consolidated EBITDA and, in the case of the

 

18

 

Norco Acquisition, to the limitations contained in clause (a)(vii) of
the definition of Consolidated EBITDA).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

“Required Lenders”
shall mean, at any time, Lenders having Loans (excluding Swingline Loans), L/C
Exposure, Swingline Exposure and unused Revolving Credit Commitments and Term
Loan Commitments representing more than 50% of the sum of all Loans outstanding
(excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused
Revolving Credit Commitments and Term Loan Commitments at such time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Revolving Credit Maturity Date”
shall mean July 22, 2009.

 

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

 

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

 

20

 

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

 

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

 

“Sponsor” shall mean Warburg Pincus Private
Equity VIII, L.P and its Affiliates.

 

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

 

“Subordinated Notes”
shall mean the Borrower’s 8-3/8% Senior Subordinated
Notes due 2011, in an initial aggregate principal amount of $400,000,000.

 

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

 

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

 

“Subsidiary”
shall mean any subsidiary of the Borrower.

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

“Term Loan Maturity Date”
shall mean July 22, 2010.

 

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

 

“Total Revolving Credit Commitment”
shall mean, at any time, the aggregate amount of the Revolving Credit
Commitments, as in effect at such time. The initial Total Revolving Credit
Commitment is $100,000,000.

 

“Transactions”
shall mean, collectively, (a) the execution, delivery and performance by
Holdings and TransDigm Holdings of the Merger Agreement and the consummation of
the Merger, (b) the execution, delivery and performance by the Loan Parties of
the Loan Documents to which they are a party and, in the case of the Borrower,
the making of the initial Borrowings hereunder, (c) the execution,
delivery and performance by the Loan Parties of the Subordinated Note Documents
to which they are a party and, in the case of the Borrower, the issuance of the
Subordinated Notes, (d) the payment of the Cash Merger Consideration, (e) the
payment of the Preferred Merger Consideration, (f) the repayment of all amounts
outstanding or due under, and the termination of, the Existing Credit
Agreement, (g) the closing of the Debt Tender Offer and the purchase by the
Borrower of all Existing Subordinated Notes validly tendered and not withdrawn
in connection therewith, (h) the Defeasance and (i) the payment of related fees
and expenses.

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

ARTICLE II

 

The Credits

 

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

 

24

 

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

 

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

 

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

 

(c)  Except with respect to Swingline
Loans and Loans made pursuant to Section 2.02(f), each Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds to such account in New York City as the
Administrative Agent may designate not later than 12:00 (noon), New York City
time, and the Administrative Agent shall promptly transfer the amounts so
received to the account designated by the Borrower in the applicable Borrowing
Request or, if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the respective Lenders.

 

(d)  Unless the Administrative Agent shall
have received notice from a Lender prior to the date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s
portion of such Borrowing, the Administrative Agent may assume that such Lender
has made such portion available to the Administrative Agent on the date of such
Borrowing in accordance with paragraph (c) above and the Administrative Agent
may, in

 

25

 

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

 

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

 

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

 

SECTION
2.03. Borrowing Procedure.  In order to request a Borrowing (other than
a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to
which this Section 2.03 shall not apply), the Borrower shall hand deliver
or fax to the Administrative Agent

 

26

 

(or give telephonic notice promptly confirmed
by written notice) a duly completed Borrowing Request (a) in the case of a
Eurodollar Borrowing, not later than 12:00 (noon), New York City time, three
Business Days before a proposed Borrowing, and (b) in the case of an ABR
Borrowing, not later than 12:00 (noon), New York City time, one Business Day
before a proposed Borrowing.  Each
Borrowing Request shall be irrevocable, shall be signed by or on behalf of the
Borrower and shall specify the following information: (i) whether the Borrowing
then being requested is to be a Term Borrowing, an Incremental Term Borrowing
or a Revolving Credit Borrowing, and whether such Borrowing is to be a
Eurodollar Borrowing or an ABR Borrowing (provided
that until the Administrative Agent shall have notified the Borrower that the
primary syndication of the Commitment has been completed (which notice shall be
given as promptly as practicable and, in any event, within 14 days after the
Closing Date), the Borrower shall not be permitted to request a Eurodollar
Borrowing); (ii) the date of such Borrowing (which shall be a Business
Day); (iii) the number and location of the account to which funds are to
be disbursed; (iv) the amount of such Borrowing; and (v) if such
Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto; provided, however, that, notwithstanding any
contrary specification in any Borrowing Request, each requested Borrowing shall
comply with the requirements set forth in Section 2.02.  If no election as to the Type of Borrowing
is specified in any such notice, then the requested Borrowing shall be an ABR
Borrowing.  If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month’s
duration.  The Administrative Agent
shall promptly advise the applicable Lenders of any notice given pursuant to
this Section 2.03 (and the contents thereof), and of each Lender’s portion
of the requested Borrowing.

 

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

 

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

 

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

 

(d)  The entries made in the accounts
maintained pursuant to paragraphs (b) and (c) above shall be prima facie
evidence of the existence and amounts of the obligations therein recorded; provided,
however,
that the failure of any Lender or the Administrative Agent to maintain such

 

27

 

accounts or any error therein shall not in
any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms.

 

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

 

SECTION
2.05. Fees. 
(a)  The Borrower agrees to pay
to each Lender, through the Administrative Agent, on the last Business Day of
March, June, September and December in each year and on each date on which any
Commitment of such Lender shall expire or be terminated as provided herein, a
commitment fee (a “Commitment Fee”)
equal to 0.50% per annum on the daily unused amount of the Commitments of such
Lender (other than the Swingline Commitment) during the preceding quarter (or
other period commencing with the date hereof or ending with the Revolving
Credit Maturity Date or the date on which the Commitments of such Lender shall
expire or be terminated).  All
Commitment Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days.  The
Commitment Fee due to each Lender shall commence to accrue on the date hereof
and shall cease to accrue on the date on which the Commitment of such Lender
shall expire or be terminated as provided herein.  For purposes of calculating Commitment Fees only, no portion of
the Revolving Credit Commitments shall be deemed utilized as a result of
outstanding Swingline Loans.

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

SECTION
2.07. Default Interest.  Any amount (whether of principal, interest,
Fees or otherwise) not paid when due hereunder or under any other Loan Document
shall bear interest, to the extent permitted by law (after as well as before
judgment), payable on demand, (a) in the case of principal, at the rate
otherwise applicable thereto pursuant to Section 2.06 plus 2.00% per annum
and (b) in all other cases, at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as the case may
be, when determined by reference to the Prime Rate and over a year of 360 days
at all other times) equal to the rate that would be applicable to an ABR Term
Loan plus 2.00% per annum.

 

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

 

29

 

Borrowing. 
Each determination by the Administrative Agent under this
Section 2.08 shall be conclusive absent manifest error.

 

SECTION
2.09. Termination and Reduction of Commitments.  (a) 
The Term Loan Commitments shall automatically terminate at 5:00 p.m.,
New York City time, on the Closing Date. The Revolving Credit Commitments, the
Swingline Commitment and the L/C Commitment shall automatically terminate on
the Revolving Credit Maturity Date. 
Notwithstanding the foregoing, all the Commitments shall automatically
terminate at 5:00 p.m., New York City time, on August 15, 2003, if the
initial Credit Event shall not have occurred by such time.

 

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

 

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

 

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

 

(i) until the Administrative Agent shall have notified the Borrower
that the primary syndication of the Commitments has been completed (which
notice shall be given as promptly as practicable and, in any event, within 14
days after the Closing Date), no ABR Borrowing may be converted into a
Eurodollar Borrowing;

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

SECTION
2.11. Repayment of Term Borrowings.  (a) 
The Borrower shall pay to the applicable Lenders, through the
Administrative Agent, on the dates set forth below, or if any such date is not
a Business Day, on the next preceding Business Day (each such date being called
a “Repayment Date”), a principal
amount of the Term Loans (as adjusted from time to time pursuant to
Sections 2.11(c), 2.12, 2.13(f) and 2.24(d)) equal to the amount set forth
below for such date, together in each case with accrued and unpaid interest on
the principal amount to be paid to but excluding the date of such payment:

 

31

 

	
  Repayment Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2003

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  March 31, 2004

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  June 30, 2004

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  September 30, 2004

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  737,500

  	
   

  
	
  Term Loan Maturity Date

  	
   

  	
  $

  	
  278,037,500

  	
   

  

 

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

 

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

 

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

 

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

 

SECTION
2.12. Optional Prepayments.  (a) 
The Borrower shall have the right at any time and from time to time to
prepay any Borrowing, in whole or in part, upon at least three

 

32

 

Business Days’ prior written or fax notice
(or telephonic notice promptly confirmed by written notice) in the case of
Eurodollar Loans, or written or fax notice (or telephonic notice promptly
confirmed by written notice) at least one Business Day prior to the date of
prepayment in the case of ABR Loans, to the Administrative Agent before 12:00
(noon), New York City time; provided,
however, that each partial
prepayment shall be in an amount that is an integral multiple of $100,000 and
not less than $500,000.

 

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

 

(c)  Each notice of prepayment shall
specify the prepayment date and the principal amount of each Borrowing (or
portion thereof) to be prepaid, shall be irrevocable and shall commit the
Borrower to prepay such Borrowing by the amount stated therein on the date
stated therein.  All prepayments under
this Section 2.12 shall be subject to Section 2.16 but otherwise without
premium or penalty.  All prepayments
under this Section 2.12 shall be accompanied by accrued and unpaid interest on
the principal amount to be prepaid to but excluding the date of payment; provided,
however,
that in the case of a prepayment of an ABR Revolving Loan or a Swingline Loan
that is not made in connection with a termination of the Revolving Credit
Commitments, the accrued and unpaid interest on the principal amount prepaid
shall be payable on the next scheduled Interest Payment Date with respect to
such ABR Revolving Loan or Swingline Loan.

 

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

 

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

 

(c)  If at the time of any Equity Issuance
the Leverage Ratio (after giving effect to such Equity Issuance and the
proposed use of the proceeds thereof) would be greater than 3.50 to 1.00, then
the Borrower shall, substantially simultaneously with (and in any event not
later than the third Business Day next following) the occurrence of such Equity
Issuance, apply 50% of the Net Cash Proceeds therefrom (or such lesser
percentage as shall be necessary to achieve such a 3.50 to 1.00 Leverage Ratio)
to prepay outstanding Term Loans in accordance with Section 2.13(f).

 

33

 

(d)  No later than the earlier of (i) 95
days after the end of each fiscal year of the Borrower, commencing with the
fiscal year ending on September 30, 2004, and (ii) the date on which the
financial statements with respect to such period are delivered pursuant to
Section 5.04(a), the Borrower shall prepay outstanding Term Loans in
accordance with Section 2.13(f) in an aggregate principal amount equal to 50%
of Excess Cash Flow for the fiscal year then ended; provided, however, that in
the event the Leverage Ratio at the end of such fiscal year was equal to or
less than 3.75 to 1.00 and greater than 3.25 to 1.00, then such amount shall be
reduced to 25% of such Excess Cash Flow and in the event the Leverage Ratio at
the end of such fiscal year was equal to or less than 3.25 to 1.00, no such
prepayment shall be required.

 

(e)  In the event that any Loan Party or
any subsidiary of a Loan Party shall receive Net Cash Proceeds from the
issuance or other disposition of Indebtedness for money borrowed (or similar
transaction evidenced by bonds, debentures, notes or similar instruments) of
any Loan Party or any subsidiary of a Loan Party (other than Indebtedness for
money borrowed (or similar transaction evidenced by bonds, debentures, notes or
similar instruments) permitted pursuant to Section 6.01, except for
Indebtedness incurred under the proviso to Section 6.01(g) to the extent
the proceeds thereof are not applied to finance the cash consideration payable in
a Permitted Acquisition (including the refinancing of Indebtedness of the
Acquired Entity and the payment of related fees and expenses)), the Borrower
shall, substantially simultaneously with (and in any event not later than the
third Business Day next following) the receipt of such Net Cash Proceeds by
such Loan Party or such subsidiary, apply an amount equal to 100% of such Net
Cash Proceeds to prepay outstanding Term Loans in accordance with Section
2.13(f).

 

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

 

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

 

SECTION
2.14. Reserve Requirements; Change in Circumstances.  (a) 
Notwithstanding any other provision of this Agreement, if any Change in
Law shall impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of or
credit extended by any Lender or the Issuing Bank (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate) or shall impose on
such Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or
any Letter of Credit or participation therein, and the result of any of the
foregoing shall be to increase the cost to such Lender or the Issuing Bank of

 

34

 

making or maintaining any Eurodollar Loan or
increase the cost to any Lender of issuing or maintaining any Letter of Credit
or purchasing or maintaining a participation therein or to reduce the amount of
any sum received or receivable by such Lender or the Issuing Bank hereunder
(whether of principal, interest or otherwise), in each case, by an amount deemed
by such Lender or the Issuing Bank to be material, then the Borrower will pay
to such Lender or the Issuing Bank, as the case may be, upon demand such
additional amount or amounts as will compensate such Lender or the Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.

 

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

 

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

 

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

 

SECTION
2.15. Change in Legality.  (a) 
Notwithstanding any other provision of this Agreement, if any Change in
Law shall make it unlawful for any Lender to make or maintain any

 

35

 

Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then,
by written notice to the Borrower and to the Administrative Agent:

 

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

 

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

 

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

 

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

 

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

 

36

 

applicable margin.  A certificate of any Lender setting forth any amount or amounts
which such Lender is entitled to receive pursuant to this Section 2.16 shall be
delivered to the Borrower and shall be conclusive absent manifest error.

 

SECTION
2.17. Pro Rata Treatment.  Except as required under Section 2.15, each
Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees or the
L/C Participation Fees, each reduction of the Term Loan Commitments or the
Revolving Credit Commitments and each conversion of any Borrowing to or
continuation of any Borrowing as a Borrowing of any Type shall be allocated pro
rata among the Lenders in accordance with their respective applicable
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding Loans or
participations in L/C Disbursements, as applicable).  Each Lender agrees that in computing such Lender’s portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender’s percentage of such Borrowing to the next higher
or lower whole dollar amount.

 

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

 

SECTION
2.19. Payments.  (a)  The Borrower shall
make each payment (including principal of or interest on any Borrowing or any
L/C Disbursement or any Fees or other amounts) hereunder and under any other
Loan Document not later than 12:00 (noon), New York City time, on the date when
due in immediately available dollars, without setoff, defense or
counterclaim.  Each such payment (other
than (i) Issuing Bank Fees, which shall be paid directly

 

37

 

to the Issuing Bank, and (ii) principal of
and interest on Swingline Loans, which shall be paid directly to the Swingline
Lender except as otherwise provided in Section 2.21(e)) shall be made to the
Administrative Agent at its offices at Eleven Madison Avenue, New York, NY 10010,
or at such other location as the Administrative Agent shall notify the Borrower
from time to time in accordance with Section 9.01.  The Administrative Agent shall distribute
any such payments received by it for the account of any other person to the
appropriate recipient promptly following receipt thereof.

 

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

 

SECTION
2.20. Taxes.  (a)  Any and all payments
by or on account of any obligation of the Borrower or any Loan Party hereunder
or under any other Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower or any Loan Party shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments,
then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section) the Administrative Agent or such Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower or such Loan Party shall make such
deductions and (iii) the Borrower or such Loan Party shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.

 

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

 

(c)  The Borrower shall indemnify the
Administrative Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent or such Lender, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrower or any Loan
Party hereunder or under any other Loan Document (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto (other than penalties or interest
attributable to (i) a failure or delay by the Administrative Agent or such
Lender, as applicable, in making such written demand to the Borrower or (ii)
the gross negligence or wilful misconduct of the Administrative Agent or such
Lender, as applicable), whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender, or
by the Administrative Agent on its behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

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

 

38

 

Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

 

(e)  Any Foreign Lender that is entitled
to an exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the Borrower
as will permit such payments to be made without withholding or at a reduced
rate.

 

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

 

39

 

compensation under Section 2.14 in respect of
such circumstances or event or shall withdraw its notice under Section 2.15 or
shall waive its right to further payments under Section 2.20 in respect of such
circumstances or event or shall consent to the proposed amendment, waiver,
consent or other modification, as the case may be, then such Lender or the
Issuing Bank shall not thereafter be required to make any such transfer and assignment
hereunder.

 

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

 

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

 

(b)  Swingline Loan Borrowing Procedure. The
Borrower shall notify the Swingline Lender by fax, or by telephone (confirmed
by fax), not later than 12:00 (noon), New York City time, on the day of a
proposed Swingline Loan.  Such notice
shall be delivered on a Business Day, shall be irrevocable and shall refer to
this Agreement and shall specify the requested date (which shall be a Business
Day) and amount of such Swingline Loan and the wire transfer instructions for
the account of the Borrower to which the proceeds of such Swingline Loan should
be transferred. The Swingline Lender shall promptly make each Swingline Loan by
wire transfer to the account specified by the Borrower in such request.

 

(c)  Prepayment.  The Borrower shall have the right at any time and from time to
time to prepay any Swingline Loan, in whole or in part, upon giving written or
fax notice (or telephonic

 

40

 

notice promptly confirmed by written notice)
to the Swingline Lender and to the Administrative Agent before 12:00 (noon),
New York City time on the date of prepayment at the Swingline Lender’s address
for notices specified on Schedule 2.01.

 

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

 

(e)  Participations.  The Swingline Lender may by written notice given to the
Administrative Agent not later than 11:00 a.m., New York City time, on any Business
Day require the Revolving Credit Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate
amount of Swingline Loans in which the Revolving Credit Lenders will
participate.  The Administrative Agent
will, promptly upon receipt of such notice, give notice to each Revolving
Credit Lender, specifying in such notice such Lender’s Pro Rata Percentage of
such Swingline Loan or Loans.  In
furtherance of the foregoing, each Revolving Credit Lender hereby absolutely
and unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the Swingline Lender, such
Revolving Credit Lender’s Pro Rata Percentage of such Swingline Loan or
Loans.  Each Revolving Credit Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.  Each Revolving Credit Lender
shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.02(c)
with respect to Loans made by such Lender (and Section 2.02(c) shall apply, mutatis
mutandis, to the payment obligations of the Lenders) and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Lenders.  The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and
not to the Swingline Lender.  Any
amounts received by the Swingline Lender from the Borrower (or other party on
behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower (or other party liable for obligations of the Borrower) of any
default in the payment thereof.

 

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

 

41

 

(b)  Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions.  In order
to request the issuance of a Letter of Credit (or to amend, renew or extend an
existing Letter of Credit), the Borrower shall hand deliver or fax to the
Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) below), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit. The Issuing
Bank shall promptly (i) notify the Administrative Agent in writing of the
amount and expiry date of each Letter of Credit issued by it and (ii) provide a
copy of each such Letter of Credit (and any amendments, renewals or extensions
thereof) to the Administrative Agent.  A
Letter of Credit shall be issued, amended, renewed or extended only if, and
upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that, after giving effect to
such issuance, amendment, renewal or extension (i) the L/C Exposure shall not
exceed $15,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not
exceed the Total Revolving Credit Commitment. 
The Borrower shall be deemed to have complied with the notification and
other information delivery requirements set forth in this Section 2.23(b) in
respect of the Letter of Credit in the form attached hereto as Schedule
2.23(b), which Letter of Credit shall be issued on the Closing Date.

 

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

 

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

 

42

 

(e)  Reimbursement.  If the Issuing Bank shall make any L/C Disbursement in respect of
a Letter of Credit, the Borrower shall pay to the Administrative Agent (or
directly to the Issuing Bank, with concurrent notice to the Administrative
Agent) an amount equal to such L/C Disbursement not later than two hours after
the Borrower shall have received notice from the Issuing Bank that payment of
such draft will be made, or, if the Borrower shall have received such notice
later than 10:00 a.m., New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following Business Day.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Without limiting the generality of the
foregoing, it is expressly understood and agreed that the absolute and
unconditional obligation of the Borrower hereunder to reimburse L/C
Disbursements will not be excused by the gross negligence or wilful misconduct
of the Issuing Bank.  However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank’s gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank may accept

 

43

 

documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit (i) the Issuing Bank’s exclusive reliance on the documents
presented to it under such Letter of Credit as to any and all matters set forth
therein, including reliance on the amount of any draft presented under such
Letter of Credit, whether or not the amount due to the beneficiary thereunder
equals the amount of such draft and whether or not any document presented
pursuant to such Letter of Credit proves to be insufficient in any respect, if
such document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever and (ii) any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit with
the terms thereof shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of the Issuing Bank.

 

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

 

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

 

(i)  Resignation or Removal of the Issuing Bank.  The Issuing Bank may resign at any time by
giving 30 days’ prior written notice to the Administrative Agent, the Lenders
and the Borrower, and may be removed at any time by the Borrower by notice to
the Issuing Bank, the Administrative Agent and the Lenders.  Subject to the next succeeding paragraph,
upon the acceptance of any appointment as the Issuing Bank hereunder by a
Lender that shall agree to serve as successor Issuing Bank, such successor
shall succeed to and become vested with all the interests, rights and
obligations of the retiring Issuing Bank and the retiring Issuing Bank shall be
discharged from its obligations to issue additional Letters of Credit
hereunder.  At the time such removal or
resignation shall become effective, the Borrower shall pay all accrued and
unpaid fees pursuant to Section 2.05(c)(ii). 
The acceptance of any appointment as the Issuing Bank hereunder by a
successor Lender shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Borrower and the Administrative Agent,
and, from and after the effective date of such agreement, (i) such successor
Lender shall have all the rights and obligations of the previous Issuing Bank
under this Agreement and the other Loan Documents and (ii) references herein
and in the other Loan Documents to the term “Issuing Bank” shall be

 

44

 

deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require.  After the
resignation or removal of the Issuing Bank hereunder, the retiring Issuing Bank
shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement and the other Loan
Documents with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue additional Letters
of Credit.

 

(j)  Cash Collateralization.  If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date; provided,
however, that the obligation to
deposit such cash shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to the Borrower
described in clause (g) or (h) or Article VII. 
Such deposit shall be held by the Collateral Agent as collateral for the
payment and performance of the Obligations. 
The Collateral Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account.  Other than any interest earned on the
investment of such deposits in Permitted Investments, which investments shall
be made at the option and sole discretion of the Collateral Agent, such
deposits shall not bear interest. 
Interest or profits, if any, on such investments shall accumulate in
such account.  Moneys in such account
shall (i) automatically be applied by the Administrative Agent to reimburse the
Issuing Bank for L/C Disbursements for which it has not been reimbursed, (ii)
be held for the satisfaction of the reimbursement obligations of the Borrower
for the L/C Exposure at such time and (iii) if the maturity of the Loans has
been accelerated (but subject to the consent of Revolving Credit Lenders
holding participations in outstanding Letters of Credit representing greater
than 50% of the aggregate undrawn amount of all outstanding Letters of Credit),
be applied to satisfy the Obligations. 
If the Borrower is required to provide an amount of cash collateral hereunder
as a result of the occurrence of an Event of Default, such amount (to the
extent not applied as aforesaid) shall be returned to the Borrower within three
Business Days after all Events of Default have been cured or waived.

 

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

 

SECTION
2.24. Increase in Term Loan Commitments.  (a)  The Borrower may, by written notice to the Administrative Agent
from time to time, request Incremental Term Loan Commitments in an amount not
to exceed the Incremental Term Loan Amount from one or more Incremental Term
Lenders, which may include any existing Lender; provided that each Incremental Term Lender, if not already a
Lender hereunder, shall be subject to the approval of

 

45

 

the Administrative Agent (which approval
shall not be unreasonably withheld). 
Such notice shall set forth (i) the amount of the Incremental Term
Loan Commitments being requested (which shall be in minimum increments of
$1,000,000 and a minimum amount of $5,000,000 or equal to the remaining
Incremental Term Loan Amount), (ii) the date on which such Incremental
Term Loan Commitments are requested to become effective (which shall not be
less than 10 Business Days after the date of such notice) and
(iii) whether such Incremental Term Loan Commitments are to be Term Loan
Commitments or commitments to make term loans with terms different from the
Term Loans (“Other Term Loans”).

 

(b)  The Borrower and each Incremental
Term Lender shall execute and deliver to the Administrative Agent an
Incremental Term Loan Assumption Agreement and such other documentation as the
Administrative Agent shall reasonably specify to evidence the Incremental Term
Loan Commitment of such Incremental Term Lender.  Each Incremental Term Loan Assumption Agreement shall specify the
terms of the Incremental Term Loans to be made thereunder; provided that, without the
prior written consent of the Required Lenders, (i) the final maturity date
of any Other Term Loans shall be no earlier than the Term Loan Maturity Date
and (ii) the average life to maturity of any Other Term Loans shall be no
shorter than the average life to maturity of the Term Loans and provided
further that, if the interest rate margin in respect of any Other
Term Loan would exceed the Applicable Percentage for the Term Loans by more
than 1⁄2 of 1%, the Applicable Percentage for the Term Loans shall be increased
so that the interest rate margin in respect of such Other Term Loan is no more
than 1⁄2 of 1% higher than the Applicable Percentage for the Term Loans.  The Administrative Agent shall promptly
notify each Lender as to the effectiveness of each Incremental Term Loan
Assumption Agreement.  Each of the
parties hereto hereby agrees that, upon the effectiveness of any Incremental
Term Loan Assumption Agreement, this Agreement shall be amended to the extent
(but only to the extent) necessary to reflect the existence and terms of the
Incremental Term Loan Commitment evidenced thereby as provided for in
Section 9.08(b).  Any such deemed
amendment may be memorialized in writing by the Administrative Agent with the
Borrower’s consent (not to be unreasonably withheld) and furnished to the other
parties hereto.

 

(c)  Notwithstanding the foregoing, no Incremental
Term Loan Commitment shall become effective under this Section 2.24 unless (i)
on the date of such effectiveness, the conditions set forth in paragraphs (b)
and (c) of Section 4.01 shall be satisfied and the Administrative Agent shall
have received a certificate to that effect dated such date and executed by a
Financial Officer of the Borrower, (ii) the Administrative Agent shall have
received (with sufficient copies for each of the Incremental Term Lenders)
legal opinions, board resolutions and other closing certificates and
documentation consistent with those delivered on the Closing Date under Section
4.02 and (iii) the Borrower would be in Pro Forma Compliance after giving
effect to such Incremental Term Loan Commitment and the Loans to be made
thereunder and the application of the proceeds therefrom as if made and applied
on such date.

 

(d)  Each of the parties hereto hereby
agrees that the Administrative Agent may take any and all action as may be
reasonably necessary to ensure that all Incremental Term Loans (other than
Other Term Loans), when originally made, are included in each Borrowing of
outstanding Term Loans on a pro rata basis, and the Borrower agrees that
Section 2.16 shall apply to any conversion of Eurodollar Term Loans to ABR
Term Loans reasonably required by the Administrative Agent to effect the
foregoing.  In addition, to the extent
any Incremental Term

 

46

 

Loans are not Other Term Loans, the scheduled
amortization payments under Sections 2.11(a) required to be made after the
making of such Incremental Term Loans shall be ratably increased by the
aggregate principal amount of such Incremental Term Loans.

 

ARTICLE III

 

Representations and Warranties

 

Each of
Holdings and the Borrower represents and warrants to the Administrative Agent,
the Collateral Agent, the Issuing Bank and each of the Lenders that (both prior
to and after giving effect to the Merger, with each reference to Holdings prior
to the Merger being deemed to be a reference to both Holdings and TransDigm
Holdings and each reference to the Borrower prior to the Merger being deemed to
be a reference to both the Borrower and TransDigm):

 

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

 

SECTION
3.02. Authorization.  The Transactions (a) have been duly authorized by all
requisite corporate and, if required, stockholder action and (b) will not
(i) violate (A) any provision of law, statute, rule or regulation, or
of the certificate or articles of incorporation or other constitutive documents
or by-laws of Holdings, the Borrower or any Subsidiary, (B) any order of
any Governmental Authority or (C) any provision of any indenture, material
agreement or other material instrument to which Holdings, the Borrower or any
Subsidiary is a party or by which any of them or any of their property is or
may be bound, (ii) except as set forth on Schedule 3.02, be in conflict
with, result in a breach of or constitute (alone or with notice or lapse of
time or both) a default under, or give rise to any right to accelerate or to
require the prepayment, repurchase or redemption of any obligation under any
such indenture, material agreement or other material instrument or
(iii) result in the creation or imposition of any Lien upon or with
respect to any property or assets now owned or hereafter acquired by Holdings,
the Borrower or any Subsidiary (other than any Lien created hereunder or under
the Security Documents).

 

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

 

47

 

SECTION
3.04. Governmental Approvals.  Except as set forth on Schedule 3.04, no
action, consent or approval of, registration or filing with or any other action
by any Governmental Authority is or will be required in connection with the
Transactions, except for (a) the filing of Uniform Commercial Code
financing statements and filings with the United States Patent and Trademark Office
and the United States Copyright Office, (b) recordation of any Mortgages
and (c) such as have been made or obtained and are in full force and effect or
which are not material to the consummation of the Transactions.

 

SECTION
3.05. Financial Statements.  (a)  The Borrower has heretofore furnished to the Lenders (i) the
consolidated balance sheets and related statements of income, stockholders’
equity and cash flows of TransDigm Holdings and its consolidated subsidiaries
as of and for the fiscal years ended September 30, 2000, 2001 and 2002,
each audited by and accompanied by the unqualified opinion of Deloitte &
Touche LLP, independent public accountants, (ii) the unaudited
consolidated balance sheet and related statements of income, stockholders’
equity and cash flows of TransDigm Holdings and its consolidated subsidiaries
as of and for each fiscal quarter subsequent to September 30, 2002 ended
45 days before the Closing Date and (iii) the unaudited consolidated
balance sheet and related statement of income of TransDigm Holdings and its
consolidated subsidiaries as of and for each fiscal month subsequent to the
date of the most recent unaudited quarterly financial statements furnished
under clause (ii) ended 30 days before the Closing Date.  Such financial statements present fairly, in
all material respects, the financial condition and results of operations and
cash flows of TransDigm Holdings and its consolidated subsidiaries as of such
dates and for such periods.  Except as
set forth on Schedule 3.05(a), such balance sheets and the notes thereto
disclose all material liabilities, direct or contingent, of TransDigm Holdings
and its consolidated subsidiaries as of the dates thereof.  Such financial statements were prepared in
accordance with GAAP applied on a consistent basis, except that the unaudited
financial statements are subject to normal year-end adjustments and do not
contain notes thereto.

 

(b)  The Borrower has heretofore delivered
to the Lenders the unaudited pro forma consolidated balance sheet of TransDigm
Holdings and its consolidated subsidiaries at March 29, 2003, and the unaudited
pro forma consolidated statements of operations of TransDigm Holdings and its
consolidated subsidiaries for the twelve months ended September 30, 2002, for
the six months ended March 29, 2003, for the six months ended March 30, 2002
and for the twelve months ended March 29, 2003, in each case prepared giving
effect to the Transactions and the Norco Acquisition as if they had occurred,
with respect to such balance sheet, on such date and, with respect to such
other financial statements, on October 1, 2001.  Such pro forma financial statements have been prepared in good
faith by the Borrower, based on the assumptions used to prepare the pro forma
financial information contained in the Confidential Information Memorandum
(which assumptions are believed by the Borrower on the date hereof and on the
Closing Date to be reasonable), are based on the best information available to
the Borrower as of the date of delivery thereof, accurately reflect, in all
material respects, all adjustments required to be made to give effect to the
Transactions and present fairly, in all material respects, on a pro forma basis
the estimated consolidated financial position of TransDigm Holdings and its consolidated
subsidiaries as of such date and for such periods, assuming that the
Transactions had actually occurred at such date or at the beginning of such
period, as the case may be.

 

48

 

SECTION
3.06. No Material Adverse Change.  No event, change or condition has occurred
that has had, or could reasonably be expected to have, a material adverse
effect on the business, operations, assets, liabilities, financial condition or
results of operations of Holdings, the Borrower and the Subsidiaries, taken as
a whole, since March 29, 2003.

 

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

 

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

 

SECTION
3.08. Subsidiaries.  Schedule 3.08 sets forth as of the Closing Date a list of
all Subsidiaries and the percentage ownership interest of Holdings or the
Borrower therein.  The shares of Equity
Interests so indicated on Schedule 3.08 are owned by Holdings or the Borrower,
directly or indirectly, free and clear of all Liens (other than Liens created under
the Security Documents).

 

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

 

(b)  Since the date of this Agreement,
there has been no change in the status of the matters disclosed on Schedule 3.09
that, individually or in the aggregate, has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.

 

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

 

49

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION
3.15. No Material Misstatements.  None of (a) the Confidential Information
Memorandum or (b) any other information, report, financial statement, exhibit
or schedule furnished by or on behalf of Holdings or the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto contained,
which, in the case of clauses (a) and (b), when taken as a whole and together
with the representations and warranties contained in this Agreement, contains
or will contain any material misstatement of fact or omitted, omits or will
omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under

 

50

 

which they were, are or will be made, not
misleading; provided that to the
extent any such information, report, financial statement, exhibit or schedule
was based upon or constitutes a forecast or projection, each of Holdings and
the Borrower represents only that it acted in good faith and utilized
reasonable assumptions and due care in the preparation of such information,
report, financial statement, exhibit or schedule and it is understood that
actual results may differ from forecasts and projections.

 

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

 

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

 

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

 

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

 

SECTION
3.19. Security Documents.  (a)  The Guarantee and Collateral Agreement, upon execution and
delivery thereof by the parties thereto, will create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable
security interest in the Collateral (as defined in the Guarantee and Collateral
Agreement) and the proceeds thereof and (i) when the Pledged Collateral
(as defined in the Guarantee and Collateral Agreement) is delivered to the
Collateral Agent, the Guarantee and Collateral Agreement shall constitute a
fully perfected first priority Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Pledged Collateral, in each case
prior and superior in right to any other person, and (ii) when financing
statements in appropriate form are filed in the offices

 

51

 

specified on Schedule 3.19(a), the Lien
created under the Guarantee and Collateral Agreement will constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in all such Collateral as to which a security interest may be
perfected by such a filing (other than Intellectual Property, as defined in the
Guarantee and Collateral Agreement), in each case prior and superior in right
to any other person, other than with respect to Liens expressly permitted by
Section 6.02.

 

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

 

(c)  The Mortgages are effective to create
in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable Lien on all of the Loan Parties’ right,
title and interest in and to the Mortgaged Property thereunder and the proceeds
thereof, and when the Mortgages are filed in the offices specified on
Schedule 3.19(d), the Mortgages shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in such Mortgaged Property and the proceeds thereof, in each case prior and
superior in right to any other person, other than with respect to the rights of
persons pursuant to Liens expressly permitted by Section 6.02.

 

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

 

SECTION
3.21. Labor Matters.  As of the date hereof and the Closing Date, there are no strikes,
lockouts or slowdowns against Holdings, the Borrower or any Subsidiary pending
or, to the knowledge of Holdings or the Borrower, threatened.  The consummation of the Transactions will
not give rise to any right of termination or right of renegotiation on the part
of any union under any collective bargaining agreement to which Holdings, the
Borrower or any Subsidiary is bound. 
Except to the extent any of the following, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
(a) the hours worked by and payments made to employees of Holdings, the
Borrower and the Subsidiaries have not been in violation in any material
respect of the Fair Labor Standards Act or any other applicable Federal, state,
local or foreign law dealing with such matters and (b) all payments due from
Holdings, the Borrower

 

52

 

or any Subsidiary, or for which any claim may
be made against Holdings, the Borrower or any Subsidiary, on account of wages
and employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of Holdings, the Borrower or such
Subsidiary.

 

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

 

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

 

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

 

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

 

ARTICLE IV

 

Conditions of Lending

 

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

 

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

 

53

 

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

 

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

 

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

 

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

 

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

 

(a)  The Administrative Agent shall have
received, on behalf of itself, the Lenders and the Issuing Bank, a favorable
written opinion of (i) Willkie Farr & Gallagher, counsel for Holdings and
the Borrower, substantially to the effect set forth in Exhibit F-1, and
(ii) each local counsel listed on Schedule 4.02(a), substantially to the
effect set forth in Exhibit F-2, in each case (A) dated the Closing Date, (B)
addressed to the Issuing Bank, the Administrative Agent and the Lenders and (C)
covering such other matters relating to the Loan Documents and the Transactions
as the Administrative Agent shall reasonably request, and Holdings and the
Borrower hereby request such counsel to deliver such opinions.

 

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

 

(c)  The Administrative Agent shall have received
(i) a copy of the certificate or articles of incorporation, including all
amendments thereto, of each Loan Party, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate as to
the good standing of each Loan Party as of a recent date, from such Secretary
of State; (ii) a certificate of the Secretary or Assistant Secretary of each Loan
Party dated the Closing Date and certifying (A) that attached thereto is a true
and complete copy of the by-laws of such Loan Party as in effect on the Closing
Date and at all times since a date prior to the date of the resolutions
described in clause (B) below, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the

 

54

 

Board of
Directors of such Loan Party authorizing the execution, delivery and
performance of the Loan Documents to which such person is a party and, in the
case of the Borrower, the borrowings hereunder, and that such resolutions have
not been modified, rescinded or amended and are in full force and effect, (C)
that the certificate or articles of incorporation of such Loan Party have not
been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above and (D) as
to the incumbency and specimen signature of each officer executing any Loan
Document or any other document delivered in connection herewith on behalf of
such Loan Party; (iii) a certificate of another officer as to the incumbency
and specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (ii) above; and (iv) such other documents as the
Lenders, the Issuing Bank or the Administrative Agent may reasonably request.

 

(d)  The Administrative Agent shall have received
a certificate, dated the Closing Date and signed by a Financial Officer of the
Borrower, confirming compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Section 4.01 and satisfaction of the condition
precedent set forth in paragraph 9 of Exhibit D to the Commitment
Letter dated June 6, 2003, among Holdings, CSFB and the other Lenders
party thereto, relating to the Loans and Commitments contemplated hereby.

 

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

 

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

 

(g)  The Collateral Agent shall have received a
Perfection Certificate with respect to the Loan Parties dated the Closing Date
and duly executed by a Responsible Officer of the Borrower, and shall have
received the results of a search of the Uniform Commercial Code filings (or
equivalent filings) made with respect to the Loan Parties in the states (or
other jurisdictions) of formation of such persons, in which the chief executive
office of each such person is located and in the other jurisdictions in which
such persons maintain property, in each case as indicated on such Perfection
Certificate, together with copies of the financing statements (or similar
documents) disclosed by such search, and accompanied by evidence satisfactory
to the Collateral Agent that the Liens indicated in any such financing
statement (or similar document) would be permitted under Section 6.02 or
have been or will be contemporaneously released or terminated.

 

(h)  (i) 
Each of the Mortgages, substantially in the form of Exhibit G, relating
to each of the Mortgaged Properties shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in full
force and effect, (ii) each of such Mortgaged Properties shall not be
subject to any Lien other than those permitted under

 

55

 

Section 6.02,
(iii) each of such Mortgages shall have been filed and recorded in the
recording office as specified on Schedule 3.19(d) (or a lender’s title
insurance policy, in form and substance acceptable to the Collateral Agent,
insuring such Mortgage as a first lien on such Mortgaged Property (subject to
any Lien permitted by Section 6.02) shall have been received by the
Collateral Agent) and, in connection therewith, the Collateral Agent shall have
received evidence satisfactory to it of each such filing and recordation and
(iv) the Collateral Agent shall have received such other documents, including a
policy or policies of title insurance issued by a nationally recognized title
insurance company, together with such endorsements, coinsurance and reinsurance
as may be reasonably requested by the Collateral Agent and the Lenders,
insuring the Mortgages as valid first liens on the Mortgaged Properties, free
of Liens other than those permitted under Section 6.02.

 

(i)  The Administrative Agent shall have received
a copy of, or a certificate as to coverage under, the insurance policies
required by Section 5.02 and the applicable provisions of the Security
Documents, each of which shall be endorsed or otherwise amended to include a
customary lender’s loss payable endorsement and to name the Collateral Agent on
behalf of the Secured Parties as additional insured, in form and substance
satisfactory to the Administrative Agent and the Collateral Agent.

 

(j)  The Acquisition shall have been, or
substantially simultaneously with the initial funding of Loans on the Closing
Date shall be, consummated in accordance with the Merger Agreement and
applicable law, without giving effect to any waiver of any material terms or
conditions of the Merger Agreement not approved by the Required Lenders.  The Holdings Common Equity Contribution
shall have occurred to the reasonable satisfaction of the Lenders.  The Administrative Agent shall have received
copies of the Merger Agreement and all certificates, opinions and other
documents delivered thereunder or in connection therewith, certified by a Financial
Officer of the Borrower as being complete and correct.  The capitalization, structure and equity
ownership of Holdings and the Borrower after giving effect to the Transactions
shall not be materially different from those contemplated in the Merger Agreement.

 

(k)  The Borrower shall have received gross cash
proceeds of not less than $400,000,000 from the issuance of the Subordinated
Notes.  The terms and conditions of the
Subordinated Notes and the provisions of the Subordinated Note Documents shall
be reasonably satisfactory to the Administrative Agent.  The Administrative Agent shall have received
copies of the Subordinated Note Documents, certified by a Financial Officer of
the Borrower as being complete and correct.

 

(l)  All principal, premium, if any, interest,
fees and other amounts due or outstanding under the Existing Credit Agreement
shall have been (or substantially simultaneously with the initial funding of
the Loans on the Closing Date shall be) paid in full, the commitments
thereunder terminated and all guarantees and security in support thereof
irrevocably discharged and released, and the Administrative Agent shall have
received reasonably satisfactory evidence thereof.  Immediately after giving effect to the Transactions and the other
transactions contemplated hereby, the Borrower and the Subsidiaries shall have
outstanding no Indebtedness or preferred stock other than

 

56

 

(a) Indebtedness
outstanding under this Agreement, (b) the Subordinated Notes and
(c) Indebtedness set forth on Schedule 6.01.  Immediately after giving effect to the Transactions and the other
transactions contemplated hereby, Holdings shall have no outstanding
Indebtedness or preferred stock other than (a) its Guarantee of the
Indebtedness outstanding under this Agreement and its Guarantee of the
Subordinated Notes and (b) pay-in-kind Indebtedness having terms, and in an
amount, satisfactory to the Lenders.

 

(m)  The Borrower shall have purchased (or
substantially simultaneously with the initial funding of Loans shall purchase)
each of the issued and outstanding Existing Subordinated Notes tendered (and
not withdrawn) pursuant to the Debt Tender Offer at a price reasonably
satisfactory to the Administrative Agent (and, if fewer than all of the
Existing Subordinated Notes shall have been so purchased, the Borrower shall
have irrevocably deposited with the trustee under the indenture governing the
Existing Subordinated Notes funds in an amount sufficient to effect the
Defeasance).

 

(n)  The Lenders shall have received the
financial statements and opinion referred to in Section 3.05.

 

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

 

ARTICLE V

 

Affirmative Covenants

 

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

 

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

 

(b)  Do or cause to be done all things
necessary to obtain, preserve, renew, extend and keep in full force and effect
all rights, licenses, permits, franchises, authorizations, patents,

 

57

 

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

 

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

 

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

 

58

 

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

 

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

 

(e)  Notify the Administrative Agent and
the Collateral Agent immediately whenever any separate insurance concurrent in
form or contributing in the event of loss with that required to be maintained
under this Section 5.02 is taken out by the Borrower; and promptly deliver to
the Administrative Agent and the Collateral Agent a duplicate original copy of
such policy or policies.

 

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

 

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

 

(a)  within 95 days after the end of each fiscal
year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the
Borrower and its consolidated Subsidiaries as of the close of such fiscal year
and the results of its operations and the operations of such Subsidiaries
during such year, together with comparative figures for the immediately
preceding fiscal year, all audited by Deloitte & Touche LLP or other
independent public accountants of recognized national standing and accompanied
by an opinion of such accountants (which shall not be qualified in any material
respect) to the effect that such consolidated financial statements fairly
present the financial condition and results of operations of the Borrower

 

59

 

and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;

 

(b)  within 50 days after the end of each of the
first three fiscal quarters of each fiscal year, its consolidated balance sheet
and related statements of income, stockholders’ equity and cash flows showing
the financial condition of the Borrower and its consolidated Subsidiaries as of
the close of such fiscal quarter and the results of its operations and the
operations of such Subsidiaries during such fiscal quarter and the then elapsed
portion of the fiscal year, and comparative figures for the same periods in the
immediately preceding fiscal year, all certified by one of its Financial Officers
as fairly presenting the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments;

 

(c)  within 30 days after the end of the first
two fiscal months of each fiscal quarter, its consolidated balance sheet and
related statement of income showing the financial condition of the Borrower and
its consolidated Subsidiaries during such fiscal month and the then elapsed
portion of the fiscal year, all certified by one of its Financial Officers as
fairly presenting the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments;

 

(d)  concurrently with any delivery of financial
statements under paragraph (a), (b) or (c) above, a certificate of the
accounting firm (in the case of paragraph (a)) or Financial Officer (in the
case of paragraph (b) or (c)) opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to accounting
matters and disclaim responsibility for legal interpretations and which may be
provided by a Financial Officer if accounting firms generally are not providing
such certificates) (i) certifying that no Event of Default or Default has
occurred or, if such an Event of Default or Default has occurred, specifying
the nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (ii) setting forth computations in reasonable
detail satisfactory to the Administrative Agent demonstrating compliance with
the covenants contained in Sections 6.06, 6.10, 6.11, 6.12 and 6.13 and, in the
case of a certificate delivered with the financial statements required by
paragraph (a) above, (x) setting forth the Borrower’s calculation of
Excess Cash Flow and (y) certifying that there has been no change in the
business activities, assets or liabilities of Holdings, or if there has been
any such change, describing such change in reasonable detail and certifying
that Holdings is in compliance with Section 6.08;

 

(e)  within 45 days after the commencement of
each fiscal year of the Borrower, (i) a detailed consolidated budget for
such fiscal year (including a projected consolidated balance sheet and related
statements of projected operations and cash flows as of the end of and for such
fiscal year) and (ii) a summary consolidated budget for the fiscal year
immediately following such fiscal year, in each case setting forth the
assumptions used for purposes of preparing such budget;

 

60

 

(f)  promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed by Holdings, the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any or all
of the functions of said Commission, or with any national securities exchange,
or, after the initial Public Equity Offering (disregarding for purposes of this
Section 5.04(f) the Net Cash Proceeds dollar threshold contained in the
definition of such term), distributed to its shareholders, as the case may be;

 

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

 

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

 

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

 

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

 

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

 

(c)  the occurrence of any ERISA Event that,
alone or together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Borrower and its ERISA
Affiliates in an aggregate amount exceeding $1,000,000; and

 

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

 

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

 

(b)  In the case of the Borrower, each
year, at the time of delivery of the annual financial statements with respect
to the preceding fiscal year pursuant to Section 5.04(a), deliver to the

 

61

 

Administrative Agent a certificate of a
Financial Officer setting forth the information required pursuant to Section 2
of the Perfection Certificate or confirming that there has been no change in
such information since the date of the Perfection Certificate delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section 5.06.

 

SECTION
5.07. Maintaining Records; Access to Properties and
Inspections.  Keep proper
books of record and account in which full, true and correct entries in
conformity with GAAP and all requirements of law are made of all dealings and
transactions in relation to its business and activities.  Each Loan Party will, and will cause each of
its subsidiaries to, permit any representatives designated by the
Administrative Agent, the Collateral Agent or any Lender to visit and inspect
the financial records and the properties of Holdings, the Borrower or any
Subsidiary at reasonable times and as often as reasonably requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent, the Collateral Agent or
any Lender to discuss the affairs, finances and condition of Holdings, the
Borrower or any Subsidiary with the officers thereof and independent
accountants therefor.  Except following
the occurrence and during the continuance of any Default, the Borrower shall be
entitled to have a representative present at all such discussions and to obtain
a copy of all written requests for information relating to any Loan Party made
by the Administrative Agent, the Collateral Agent or any Lender to any third party.

 

SECTION
5.08. Use of Proceeds.  Use the proceeds of the Loans and request the issuance of Letters
of Credit only for the purposes set forth in the preamble to this Agreement.

 

SECTION
5.09. Further Assurances.  Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including (i) filing Uniform Commercial Code and other financing statements,
mortgages and deeds of trust and (ii) delivering duly executed deposit account
control agreements as contemplated by, and within the time period referred to
in, the Guarantee and Collateral Agreement) that may be required under
applicable law, or that the Required Lenders, the Administrative Agent or the
Collateral Agent may reasonably request, in order to effectuate the
transactions contemplated by the Loan Documents and in order to grant,
preserve, protect and perfect the validity and first priority of the security
interests created or intended to be created by the Security Documents.  The Borrower will cause any subsequently
acquired or organized Domestic Subsidiary (other than any Inactive Subsidiary)
or any Domestic Subsidiary that ceases to be an Inactive Subsidiary to become a
Loan Party by executing the Guarantee and Collateral Agreement and each other
applicable Security Document in favor of the Collateral Agent.  In addition, from time to time, the Borrower
will, at its cost and expense, promptly secure the Obligations by pledging or
creating, or causing to be pledged or created, perfected security interests
with respect to such of its assets and properties as the Administrative Agent,
the Collateral Agent or the Required Lenders shall designate (it being
understood that it is the intent of the parties that the Obligations shall be
secured by substantially all the assets of the Borrower and its Subsidiaries
(including real and other properties acquired subsequent to the Closing Date,
but excluding immaterial leasehold properties and the leasehold property in
Fullerton, California)).  Such security interests
and Liens will be created under the Security Documents and other security
agreements, mortgages, deeds of trust and other instruments and documents in
form and substance satisfactory to the Administrative Agent and the Collateral
Agent, and the Borrower shall deliver or cause to be delivered to the Lenders
all such instruments and documents (including legal opinions, title

 

62

 

insurance policies and lien searches) as the
Collateral Agent shall reasonably request to evidence compliance with this
Section 5.09.  The Borrower agrees
to provide such evidence as the Collateral Agent shall reasonably request as to
the perfection and priority status of each such security interest and
Lien.  In furtherance of the foregoing,
the Borrower will give prompt notice to the Administrative Agent of the
acquisition by it or any of the Subsidiaries of any real property (or any
interest in real property) having a value in excess of $250,000.

 

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

 

ARTICLE VI

 

Negative Covenants

 

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

 

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

 

(a)  Indebtedness existing on the date hereof and
set forth in Schedule 6.01;

 

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

 

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

 

(d)  Indebtedness of the Borrower or any Subsidiary
incurred to finance the acquisition, construction or improvement of any fixed
or capital assets, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof
(plus the amount of any interest, premiums or penalties required to be paid
thereon plus fees and expenses associated therewith); provided that (i) such Indebtedness is
incurred prior to or within 120 days after such acquisition or the completion
of such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this Section 6.01(d), when combined with the
aggregate principal amount of all Capital Lease Obligations and Synthetic Lease
Obligations incurred pursuant to Section 6.01(e), shall not exceed
$10,000,000 at any time outstanding;

 

(e)  Capital Lease Obligations and Synthetic
Lease Obligations in an aggregate principal amount, when combined with the
aggregate principal amount of all

 

63

 

Indebtedness
incurred pursuant to Section 6.01(d), not in excess of $10,000,000 at any
time outstanding;

 

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

 

(g)  Indebtedness of the Borrower and the
Subsidiary Guarantors in respect of the Subordinated Notes in an aggregate
principal amount not in excess of $400,000,000 at any time outstanding; provided however, that up to an additional
$150,000,000 of such Indebtedness may be incurred so long as the Borrower
complies with the provisions of Section 2.13(e);

 

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

 

(i)  unsecured subordinated Indebtedness of
Holdings or the Borrower (which may be Guaranteed by any Loan Party on a
subordinated basis) the proceeds of which are used to finance the cash
consideration payable in a Permitted Acquisition (including the refinancing of
Indebtedness of the Acquired Entity and the payment of related fees and
expenses) in an aggregate principal amount, when combined with the aggregate
principal amount of all Indebtedness incurred pursuant to the proviso to
Section 6.01(g) (to the extent the proceeds thereof are not required to be
applied to the prepayment of outstanding Term Loans pursuant to Section 2.13
(e)) and Section 6.01(h), not in excess of $250,000,000 at any time
outstanding; provided that such
Indebtedness (i) matures after the six-month anniversary of the Term Loan
Maturity Date, (ii) requires no scheduled payment of principal prior to
its maturity, (iii)  contains subordination provisions that are no less
favorable to the Lenders than the subordination provisions contained in the
Subordinated Note Documents and (iv) does not require the issuer thereof or any
other obligor thereon to maintain any specified financial condition or
performance (other than as a condition to the taking of certain actions);

 

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

 

(k)  Indebtedness incurred to extend, renew or
refinance any Indebtedness described in Section 6.01(a), (d), (g), (h) or (i)
(“Refinancing Indebtedness”); provided that (i) such Refinancing
Indebtedness is in an aggregate principal amount not greater than the aggregate
principal amount of the Indebtedness being extended, renewed or refinanced,
plus the amount of any interest, premiums or penalties required to be paid
thereon plus fees and expenses associated therewith, (ii) such Refinancing
Indebtedness has a later or equal final maturity and a longer or equal weighted
average life to maturity than the Indebtedness being extended, renewed or
refinanced, (iii) if the Indebtedness being extended, renewed or refinanced is
subordinated to the Obligations, the

 

64

 

Refinancing
Indebtedness is subordinated to the Obligations on terms no less favorable to
the Lenders than the Indebtedness being extended, renewed or refinanced, (iv)
only the obligors in respect of the Indebtedness being extended, renewed or
refinanced may become obligated with respect to such Refinancing Indebtedness
and (v) the non-economic covenants, events of default, remedies and other provisions
of the Refinancing Indebtedness, when taken as a whole, shall be materially no
less favorable to the Lenders than those contained in the Indebtedness being
extended, renewed or refinanced;

 

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

 

(m)  unsecured Indebtedness of Holdings that is
issued as consideration for the repurchase of Equity Interests of Parent owned
by employees of Parent, Holdings, the Borrower or the Subsidiaries; provided that such Indebtedness (i)
matures at least six months after the Term Loan Maturity Date, (ii) requires no
scheduled payment of principal prior to maturity, (iii) permits all interest
thereon to be payable in kind rather than cash (at the sole option of Holdings)
and (iv) is subordinated to the prior payment in full of the Obligations on
terms reasonably acceptable to the Administrative Agent;  and

 

(n)  other Indebtedness of the Borrower or the
Subsidiaries in an aggregate principal amount not exceeding $35,000,000 at any
time outstanding.

 

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

 

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

 

(b)  any Lien created under the Loan Documents;

 

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

 

(d)  Liens for taxes not yet due or which are
being contested in compliance with Section 5.03;

 

65

 

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

 

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

 

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

 

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

 

(i)  purchase money security interests in real
property, improvements thereto or equipment hereafter acquired (or, in the case
of improvements, constructed) by the Borrower or any Subsidiary; provided that (i) such security interests
secure Indebtedness permitted by Section 6.01, (ii) such security
interests are incurred, and the Indebtedness secured thereby is created, within
120 days after such acquisition (or construction), and (iii) such security
interests do not apply to any other property or assets of the Borrower or any
Subsidiary (it being agreed that transactions with the same vendor or any
Affiliate of such vendor may be cross-collateralized);

 

(j)  Liens arising out of judgments or awards in
respect of which Holdings, the Borrower or any of the Subsidiaries shall in
good faith be prosecuting an appeal or proceedings for review in respect of
which there shall be secured a subsisting stay of execution pending such appeal
or proceedings; provided that the
aggregate amount of all such judgments or awards (and any cash and the fair
market value of any property subject to such Liens) does not exceed $5,000,000
at any time outstanding;

 

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

 

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

 

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

 

(n)  restrictions imposed in the ordinary course
of business on the sale or distribution of designated inventory pursuant to
agreements with customers under which

 

66

 

such inventory
is consigned by the customer or such inventory is designated for sale to one or
more customers;

 

(o)  Liens on the assets of a Foreign Subsidiary
that is not a Subsidiary Guarantor securing Indebtedness permitted to be
incurred by such Foreign Subsidiary pursuant to Section 6.01; and

 

(p)  other Liens that do not, individually or in
the aggregate, secure obligations (or encumber property with a fair market
value) in excess of $5,000,000 at any one time.

 

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

 

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

 

(a)  (i) investments by Holdings, the Borrower
and the Subsidiaries existing on the date hereof in the Equity Interests of the
Borrower and the Subsidiaries and (ii) additional investments by Holdings, the
Borrower and the Subsidiaries in the Equity Interests of the Borrower and the
Subsidiaries; provided that (A)
any such Equity Interests held by a Loan Party shall be pledged pursuant to the
Guarantee and Collateral Agreement (subject to the limitations applicable to
voting stock of a Foreign Subsidiary referred to therein) and (B) the aggregate
amount of investments by Loan Parties in, and loans and advances by Loan
Parties to, Subsidiaries that are not Loan Parties (determined without regard
to any write-downs or write-offs of such investments, loans and advances) shall
not exceed $15,000,000 at any time outstanding;

 

(b)  Permitted Investments;

 

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

 

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

 

67

 

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

 

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

 

(g)  the Borrower or any Subsidiary may acquire
all or substantially all the assets of a person or line of business of such
person, or not less than 100% of the Equity Interests (except for directors’
qualifying shares) of a person (referred to herein as the “Acquired Entity”); provided that (i) such acquisition was not
preceded by an unsolicited tender offer for such Equity Interests by, or proxy
contest initiated by, Holdings, the Borrower or any Subsidiary; (ii) the
Acquired Entity shall be a going concern and after giving effect to the
acquisition the Borrower shall be in compliance with Section 6.08;
(iii) except as otherwise provided in clause (iv)(D) below, the Acquired
Entity is located, and substantially all of its operations are conducted, in
the United States of America; (iv) at the time of such transaction
(A) both before and after giving effect thereto, no Event of Default or
Default shall have occurred and be continuing; (B) the Borrower would be in Pro
Forma Compliance (assuming for purposes of making such determination with
respect to the covenant set forth in Section 6.13 that the Leverage Ratio is at
least 0.25 to 1.00 lower than the Leverage Ratio set forth therein and in
effect at the time such determination is made); (C) after giving effect to
such acquisition, there must be at least $10,000,000 of unused and available
Revolving Credit Commitments; and (D) except to the extent consisting of, or
financed with the proceeds of, Equity Interests of Holdings, the total
consideration paid in connection with such acquisition and any other
acquisitions pursuant to this Section 6.04(g) (including any Indebtedness
of the Acquired Entity that is assumed, refinanced or repaid by the Borrower or
any Subsidiary in connection with or following such acquisition) shall not in
the aggregate exceed $250,000,000 (it being agreed that up to $60,000,000 of
such amount may relate to acquisitions of Acquired Entities that do not satisfy
the requirements of clause (iii) above but otherwise meet all the criteria of
this Section 6.04(g)); and (v) the Borrower shall comply, and shall cause the
Acquired Entity to comply, with the applicable provisions of Section 5.09 and
the Security Documents (any acquisition of an Acquired Entity meeting all the
criteria of this Section 6.04(g) being referred to herein as a “Permitted Acquisition”);

 

(h)  the Borrower and its Subsidiaries may
acquire and hold receivables owing to it, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms (including the dating of receivables) of the Borrower or
such Subsidiary;

 

(i)  Holdings may acquire and hold obligations of
one or more officers or other employees of Holdings or its subsidiaries in
connection with such officers’ or employees’ acquisition of Equity Interests of
Holdings;

 

68

 

(j)  the Borrower and its Subsidiaries may
acquire and hold non-cash consideration issued by the purchaser of assets in
connection with a sale of such assets to the extent permitted by
Section 6.05;

 

(k)  investments, loans and advances existing on
the date hereof and set forth in Schedule 6.04; and

 

(l)  in addition to investments permitted by
paragraphs (a) through (k) above, additional investments, loans and advances by
the Borrower and the Subsidiaries (other than investments, loans and advances
to Foreign Subsidiaries) so long as the aggregate amount invested, loaned or
advanced pursuant to this paragraph (l) (determined without regard to any
write-downs or write-offs of such investments, loans and advances) does not
exceed $25,000,000 in the aggregate.

 

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

 

(b)  Engage in any Asset Sale otherwise
permitted under paragraph (a) above unless (i) such Asset Sale is for consideration
at least 75% of which is cash (other than in the case of a like-kind exchange
or trade-in of one asset for another asset used or useful in the business of
the Borrower and its Subsidiaries), (ii) such consideration is at least equal
to the fair market value of the assets being sold, transferred, leased or
disposed of and (iii) other than in the case of the sale of the Borrower’s
corporate airplane (or a replacement thereof) or the sale of one or more
parcels of real property in connection with the relocation of the operations of
the Borrower or any Subsidiary, the fair market value of all assets sold,
transferred, leased or disposed of pursuant to this paragraph (b) shall not
exceed $20,000,000 in any fiscal year.

 

SECTION
6.06. Restricted Payments; Restrictive Agreements.  (a) 
Declare or make, or agree to declare or make, directly or indirectly,
any Restricted Payment (including pursuant to any Synthetic Purchase
Agreement), or incur any obligation (contingent or otherwise) to do so; provided, however,
that (i) any Subsidiary may declare and pay dividends or make other

 

69

 

distributions ratably to its equity holders,
(ii) so long as no Event of Default or Default shall have occurred and be continuing
or would result therefrom (and provided
that, in the case of any direct or indirect distribution to Parent, Parent
owns, beneficially and of record, 100% of the issued and outstanding Equity
Interests of Holdings at the time of such distribution), Holdings may (and the
Borrower may make distributions to Holdings to enable Holdings to make
distributions to Parent to enable Parent to) repurchase Equity Interests of
Parent owned by employees of Parent, Holdings, the Borrower or the Subsidiaries
or make payments to employees of Parent, Holdings, the Borrower or the
Subsidiaries upon termination of employment of such employees (including as a
result of retirement or severance) in connection with the exercise of stock
options, stock appreciation rights or similar equity incentives or equity based
incentives pursuant to management incentive plans or in connection with the
death or disability of such employees in an aggregate amount not to exceed
$5,000,000 in any fiscal year (it being agreed that (A) any amount not utilized
in any fiscal year may be carried forward and utilized in any subsequent fiscal
year, (B) such amount shall be increased by the amount of cash proceeds
received by Parent from the sale of Equity Interests of Parent to such
employees after the Closing Date to the extent such proceeds are contributed
directly or indirectly to the Borrower as common equity and (C) any proceeds of
key man life insurance actually received by the Borrower or Holdings may be
used or distributed by the Borrower or Holdings for purposes of such
repurchases without regard to such amount); (iii) the Borrower may make
Restricted Payments to Holdings and/or Parent and Holdings may make Restricted
Payments to Parent (x) the proceeds of which shall be applied by Holdings
and/or Parent to pay out of pocket general corporate and overhead expenses
incurred by Holdings and/or Parent and (y) in the form of Tax Payments, to
the extent directly attributable to (or arising as a result of) the operations
of the Borrower and the Subsidiaries; provided,
however, that (A) the amount
of such dividends shall not exceed the amount that the Borrower and the
Subsidiaries would be required to pay in respect of Federal, State and local
taxes were the Borrower and the Subsidiaries to pay such taxes as stand-alone
taxpayers, (B) all Restricted Payments made to Holdings and/or Parent
pursuant to this clause (iii) are used by Holdings or Parent, as applicable,
for the purposes specified herein within 20 days of the receipt thereof and (C)
in the case of any Restricted Payment made to Parent pursuant to this clause
(iii), Parent owns, beneficially and of record, 100% of the issued and
outstanding Equity Interests of Holdings at the time of such Restricted
Payment; (iv) the Borrower may make distributions to Holdings on the
Closing Date to enable Holdings to pay the Common Merger Consideration and the
Preferred Merger Consideration and fees and expenses incurred in connection
with the Transactions; (v) on and after the date of delivery of the financial statements
required by Section 5.04(a) (commencing with the financial statements for the
fiscal year ending on September 30, 2004), and if at the time of the proposed
Restricted Payment the Leverage Ratio is less than 3.25 to 1.00, Holdings and
the Borrower may make Restricted Payments in an amount not to exceed the
portion of Excess Cash Flow for the immediately preceding fiscal year that is
not required to be applied to the prepayment of outstanding Term Loans pursuant
to Section 2.13(d), so long as (x) no Default shall have occurred and be
continuing or would result therefrom and (y) prior to or contemporaneously with
such Restricted Payment, the Borrower shall have made any mandatory prepayment
required by Section 2.13(d); and (vi) Holdings and the Borrower may make other
Restricted Payments under this clause (vi) in an amount not to exceed
$10,000,000 in the aggregate, so long as no Default shall have occurred and be
continuing or would result therefrom.

 

70

 

(b)  Enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (i) the ability of Holdings, the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets to
secure the Obligations or (ii) the ability of any Subsidiary to pay
dividends or other distributions with respect to any of its Equity Interests or
to make or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (A) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document or
the Subordinated Note Documents, (B) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of
stock or assets of a Subsidiary pending such sale, provided such restrictions
and conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (C) clause (i) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness,
(D) clause (i) of the foregoing shall not apply to customary provisions in
leases and other contracts restricting the assignment thereof and
(E) clauses (i) and (ii) of the foregoing shall not apply to restrictions
and conditions imposed (1) under Indebtedness of Foreign Subsidiaries
permitted by Section 6.01, (2) under Indebtedness permitted under Section
6.01(h) or (3) under contracts with customers entered into in the ordinary
course of business that contain restrictions on cash and other deposits or net
worth.

 

SECTION
6.07. Transactions with Affiliates.  Except for transactions by or among Loan
Parties, sell or transfer any property or assets to, or purchase or acquire any
property or assets from, or otherwise engage in any other transactions with,
any of its Affiliates, except that (a) the Borrower or any Subsidiary may
engage in any of the foregoing transactions at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties,
(b) dividends and purchases may be paid and effected to the extent
provided in Section 6.06, (c) loans, investments and advances may be made to
the extent permitted by Sections 6.01 and 6.04, (d) except after the occurrence
and during the continuance of a Default specified in clause (b) or (c) of
Article VII, management, consulting or advisory fees in an aggregate
amount not to exceed $2,500,000 in any fiscal year may be paid by the Borrower
to the Sponsor, (e) the Loan Parties may perform their respective
obligations under the terms of the Tax Sharing Agreement or any other agreement
with any of its Affiliates in effect on the Closing Date and set forth on
Schedule 6.07, or any amendments thereto that do not materially increase the
Loan Parties’ obligations thereunder, (f) reasonable fees and compensation
may be paid to, and indemnities may be provided on behalf of, officers,
directors and employees of, and consultants (other than the Sponsor) to,
Holdings, the Borrower and the Subsidiaries, as determined by the Board of
Directors or appropriate officers of the Borrower in good faith,
(g) securities may be issued and other payments, awards or grants (in
cash, equity securities or otherwise) may be made pursuant to, or with respect
to the funding of, employment arrangements, stock options and stock ownership
plans approved by the Board of Directors of the Borrower in good faith,
(h) the Loan Parties may perform their respective obligations under the
terms of any registration rights agreement, (i) equity securities may be
sold and (j) fees may be paid to the Sponsor in respect of any
acquisitions or dispositions with respect to which the Sponsor acts as an
adviser to Holdings, the Borrower or any Subsidiary in an amount not to exceed
1% of the value of such transaction.

 

71

 

SECTION
6.08. Business of Holdings, Borrower and Subsidiaries.  (a) 
With respect to Holdings, engage in any business activities or have any
assets or liabilities other than its ownership of the Equity Interests of the
Borrower and liabilities incidental thereto, including its liabilities
hereunder and pursuant to the Guarantee and Collateral Agreement.

 

(b)  With respect to the Borrower and its
Subsidiaries, engage at any time in any business or business activity other
than the business currently conducted by them and business activities that
constitute a reasonable extension, development or expansion thereof (including
engaging in engineered components businesses not within the aerospace industry)
reasonably incidental thereto.

 

SECTION
6.09. Other Indebtedness.  (a) 
Permit any supplement, modification or amendment of any indenture,
instrument or agreement pursuant to which any Material Indebtedness of Holdings,
the Borrower or any of the Subsidiaries is outstanding if the effect of such
supplement, modification or amendment would materially increase the obligations
of the obligor or confer additional material rights on the holder of such
Indebtedness in a manner that would be, or could reasonably be expected to be,
materially detrimental to the Borrower or the Lenders, as determined in good
faith by the Borrower.

 

(b)  (i) 
Make, in excess of $10,000,000 in the aggregate (provided that no
Default then exists or would occur as a result thereof), any distribution,
whether in cash, property, securities or a combination thereof, other than
regular scheduled payments of principal and interest as and when due (to the
extent not prohibited by applicable subordination provisions), in respect of,
or pay, or offer or commit to pay, or directly or indirectly (including
pursuant to any Synthetic Purchase Agreement) redeem, repurchase, retire or
otherwise acquire for consideration, or set apart any sum for the aforesaid purposes,
any subordinated Indebtedness (provided, however, that the foregoing
shall not prohibit any refinancings of Indebtedness in accordance with Section
6.01(k)) or (ii) pay in cash any amount in respect of any Indebtedness or
preferred Equity Interests that may at the obligor’s option be paid in kind or
in other securities.

 

SECTION
6.10. Capital Expenditures.  (a) 
Permit the aggregate amount of Capital Expenditures made by the Borrower
and the Subsidiaries in any period set forth below to exceed the amount set
forth below for such period:

 

	
  Period

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Closing Date through September 30, 2003

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  Each fiscal year thereafter

  	
   

  	
  $

  	
  15,000,000

  	
   

  

 

From and after the consummation of any
Permitted Acquisition occurring after the Closing Date, and for so long as the
Acquired Entity shall be owned by the Borrower or a Subsidiary, each of the
permitted Capital Expenditure amounts set forth above shall be increased by an
amount equal to 20% of the Acquired EBITDA of the Acquired Entity acquired in
each such Permitted Acquisition for the 12 month period most recently ended
prior to the consummation of such Permitted Acquisition for which financial
statements are available (as certified by a Financial Officer of the Borrower),
provided
that the Capital Expenditure amount for the fiscal year in which such Permitted
Acquisition is consummated shall only be increased by the amount set

 

72

 

forth above in this sentence multiplied by a
fraction, the numerator of which is the number of days remaining in such fiscal
year and the denominator of which is 365.

 

(b)  The amount of permitted Capital
Expenditures set forth in paragraph (a) above (as adjusted in accordance
with the terms thereof) in respect of any fiscal year commencing with the
fiscal year ending on September 30, 2004, shall be increased (but not
decreased) by (a) the amount of unused permitted Capital Expenditures for the
immediately preceding fiscal year less (b) an amount equal to unused Capital
Expenditures carried forward to such preceding fiscal year.

 

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

 

	
  Date or Period

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  July 1, 2003
  through June 30, 2004

  	
   

  	
  2.00 to 1.00

  
	
  July 1, 2004
  through September 30, 2004

  	
   

  	
  2.15 to 1.00

  
	
  October 1,
  2004 through March 31, 2005

  	
   

  	
  2.35 to 1.00

  
	
  April 1,
  2005 through September 30, 2005

  	
   

  	
  2.45 to 1.00

  
	
  October 1,
  2005 through June 30, 2006

  	
   

  	
  2.55 to 1.00

  
	
  July 1, 2006
  through June 30, 2007

  	
   

  	
  2.75 to 1.00

  
	
  Thereafter

  	
   

  	
  3.00 to 1.00

  

 

SECTION
6.12. Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage Ratio for
any period of four consecutive fiscal quarters, in each case taken as one
accounting period, ending on any date after the Closing Date to be the less
than 1.10 to 1.00.

 

SECTION
6.13. Maximum Leverage Ratio.  Permit the Leverage Ratio at the end of any
fiscal quarter ending on a date or during a period set forth below to be
greater than the ratio set forth opposite such date or period below.

 

	
  Date or Period

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  July 1, 2003
  through June 30, 2004

  	
   

  	
  6.40 to 1.00

  
	
  July 1, 2004
  through September 30, 2004

  	
   

  	
  5.75 to 1.00

  
	
  October 1,
  2004 through December 31, 2004

  	
   

  	
  5.50 to 1.00

  
	
  January 1,
  2005 through March 31, 2005

  	
   

  	
  5.40 to 1.00

  
	
  April 1,
  2005 through June 30, 2005

  	
   

  	
  5.30 to 1.00

  
	
  July 1, 2005
  through March 31, 2006

  	
   

  	
  5.00 to 1.00

  
	
  April 1,
  2006 through June 30, 2006

  	
   

  	
  4.75 to 1.00

  
	
  July 1, 2006
  through June 30, 2007

  	
   

  	
  4.25 to 1.00

  
	
  July 1, 2007
  through September 30, 2008

  	
   

  	
  4.00 to 1.00

  
	
  October 1,
  2008 through September 30, 2009

  	
   

  	
  3.75 to 1.00

  
	
  Thereafter

  	
   

  	
  3.50 to 1.00

  

 

SECTION
6.14. Fiscal Year.  With respect to Holdings and the Borrower, change their fiscal
year-end to a date other than September 30.

 

73

 

ARTICLE VII

 

Events of Default

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)  (i) 
Holdings, the Borrower or any Subsidiary shall fail to pay any principal
or interest, regardless of amount, due in respect of any Material Indebtedness,
when and as the same shall become due and payable, or (ii) any other event or
condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (ii) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness;

 

(g)  an involuntary proceeding shall be
commenced or an involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of Holdings, the Borrower or any
Subsidiary, or of a substantial part of the property or assets of Holdings, the
Borrower or a Subsidiary, under Title 11 of the United States Code, as now
constituted or hereafter amended, or

 

74

 

any other Federal, state or foreign
bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
Holdings, the Borrower or any Subsidiary or for a substantial part of the
property or assets of Holdings, the Borrower or a Subsidiary or (iii) the
winding-up or liquidation of Holdings, the Borrower or any Subsidiary; and such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;

 

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

 

(i)  one or more judgments for the payment
of money in an aggregate amount in excess of $5,000,000 shall be rendered
against Holdings, the Borrower, any Subsidiary or any combination thereof and
the same shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to levy upon assets or properties of Holdings, the
Borrower or any Subsidiary to enforce any such judgment;

 

(j)  an ERISA Event shall have occurred
that, in the opinion of the Required Lenders, when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result
in liability of the Borrower and its ERISA Affiliates in an aggregate amount
exceeding $5,000,000;

 

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

 

(l)  any security interest purported to be
created by any Security Document shall cease to be, or shall be asserted by the
Borrower or any other Loan Party not to be, a valid, perfected, first priority
(except as otherwise expressly provided in this Agreement or such Security
Document) security interest in the securities, assets or properties covered
thereby, except to the extent that any such loss of perfection or priority
results from the failure of the Collateral Agent to maintain possession of
certificates representing securities pledged under the Pledge Agreement and
except to the extent that such loss is covered by a lender’s title insurance
policy and the related insurer shall not have denied or disclaimed in writing
that such loss is covered by such title insurance policy;

 

75

 

(m)  the Indebtedness under the
Subordinated Notes or any Guarantees thereof shall cease, for any reason, to be
validly subordinated to the Obligations, as provided in the Subordinated Note
Documents, or any Loan Party or any Affiliate of any Loan Party shall so
assert; or

 

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

 

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

 

Notwithstanding anything to the contrary
contained in this Article VII, in the event that the Borrower would otherwise
fail to comply with the requirements of Sections 6.11, 6.12 or 6.13 (each, a “Financial
Performance Covenant”) at the end of any fiscal quarter, at any time
prior to the end of such fiscal quarter, Holdings shall have the right,
exercisable one time only during the term of this Agreement, to issue Permitted
Cure Securities (as defined below) for cash or otherwise receive cash
contributions to the capital of Holdings, in either case in an amount not to
exceed $20,000,000, and to contribute any such cash to the capital of Borrower
(the “Cure
Right”), and upon the receipt by Borrower of such cash (the “Cure Amount”)
pursuant to the exercise by Holdings of such Cure Right, the Financial
Performance Covenants shall be recalculated giving effect to the following pro
forma adjustments:

 

(i)                     Consolidated
EBITDA shall be increased solely for the purpose of measuring the Financial
Performance Covenants and not for any other purpose under this Agreement, by an
amount equal to the Cure Amount;

 

(ii)                  if,
after giving effect to the foregoing recalculations, the Borrower shall then be
in compliance with the requirements of all Financial Performance Covenants, the
Borrower shall be deemed to have satisfied the requirements of the Financial
Performance Covenants as of the relevant date of determination with the same
effect as though there had been no failure to comply therewith at such date,
and the applicable breach or default of any such Financial Performance Covenant
that would

 

76

 

have otherwise occurred on such date but for the application of the
foregoing recalculations shall be deemed not to have occurred; and

 

(iii)                    to
the extent that the Cure Amount proceeds are used to repay Indebtedness, such
Indebtedness shall not be deemed to have been repaid for purposes of
calculating any Financial Performance Covenant for the period with respect to
which such Cure Right shall have been exercised.

 

As used in this Article VII, the term “Permitted
Cure Securities” shall mean an equity security of Holdings having no
mandatory redemption, repurchase, repayment or similar requirements prior to the
six-month anniversary of the Term Loan Maturity Date and upon which all
dividends or distributions, at the election of Holdings, may be payable in
additional shares of such equity security.

 

ARTICLE VIII

 

The Administrative Agent and the Collateral
Agent

 

Each of the
Lenders and the Issuing Bank hereby irrevocably appoints the Administrative
Agent and the Collateral Agent (for purposes of this Article VIII, the
Administrative Agent and the Collateral Agent are referred to collectively as
the “Agents”)
its agent and authorizes the Agents to take such actions on its behalf and to
exercise such powers as are delegated to such Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.  Without limiting the
generality of the foregoing, the Agents are hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents.

 

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

 

Neither Agent
shall have any duties or obligations except those expressly set forth in the
Loan Documents.  Without limiting the
generality of the foregoing, (a) neither Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) neither Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that such Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.08), and (c) except as expressly set forth in the Loan Documents,
neither Agent shall have any duty to disclose, nor shall it be liable for the
failure to disclose, any information relating to Holdings, the Borrower or any
of the Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent and/or Collateral Agent or any of its Affiliates in any
capacity.  Neither Agent shall be liable
for any action taken or not taken by it with the

 

77

 

consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.08) or in the absence of its own gross negligence or
wilful misconduct.  Neither Agent shall
be deemed to have knowledge of any Default, except with respect to defaults in
the payment of principal, interest and Fees required to be paid to the
Administrative Agent for the account of the Lenders,  unless and until written notice thereof is given to such Agent by
Holdings, the Borrower or a Lender, and neither Agent shall be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or
in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of
any Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to such Agent.

 

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

 

Each Agent may
perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by it. 
Each Agent and any such sub-agent may perform any and all its duties and
exercise its rights and powers by or through their respective Related
Parties.  The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.

 

Subject to the
appointment and acceptance of a successor Agent as provided below, either Agent
may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower.  Upon any such resignation,
the Required Lenders shall have the right, in consultation with the Borrower,
to appoint a successor.  If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders and the
Issuing Bank, appoint a successor Agent which shall be a bank with an office in
New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor.  After an Agent’s resignation
hereunder, the provisions of this Article and Section 9.05 shall continue in
effect for the benefit of such retiring Agent, its sub-agents and

 

78

 

their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while acting as Agent.

 

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

 

ARTICLE IX

 

Miscellaneous

 

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

 

(a)  if to the Borrower or Holdings, to it at
26380 Curtiss Wright Parkway, Richmond Heights, OH 44143, Attention of
Gregory Rufus (Fax No. 216-289-4937);

 

(b)  if to the Administrative Agent, to Credit
Suisse First Boston, Eleven Madison Avenue, OMA-2,
New York, NY 10010, Attention of Agency Group Manager (Fax No. (212) 325-8304);
and

 

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

 

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

 

SECTION
9.02. Survival of Agreement.  All covenants, agreements, representations
and warranties made by the Borrower or Holdings herein and in the certificates
or other instruments prepared or delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the Lenders and the Issuing Bank and shall survive the making by
the Lenders of the Loans and the issuance of Letters of Credit by the Issuing
Bank, regardless of any investigation made by the Lenders or the Issuing Bank
or on

 

79

 

their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any
Loan or any Fee or any other amount payable under this Agreement or any other
Loan Document is outstanding and unpaid or any Letter of Credit is outstanding
and so long as the Commitments have not been terminated.  The provisions of Sections 2.14, 2.16, 2.20
and 9.05 shall remain operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the expiration of the
Commitments, the expiration of any Letter of Credit, the invalidity or unenforceability
of any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank.

 

SECTION
9.03. Binding Effect.  This Agreement shall become effective when it shall have been
executed by the Borrower, Holdings and the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto.

 

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

 

(b)  Each Lender may assign to one or more
assignees all or a portion of its interests, rights and obligations under this
Agreement (including all or a portion of its Commitments and the Loans at the
time owing to it); provided, however,
that (i) (x) the Administrative Agent (and, in the case of any assignment of a
Revolving Credit Commitment, the Issuing Bank and the Swingline Lender) and
(except in the case of an assignment of a Term Loan to a Lender or an Affiliate
or Related Fund of a Lender) the Borrower must give their prior written consent
to such assignment (which consent shall not be unreasonably withheld or
delayed); provided, however, that
the consent of the Borrower shall not be required to any such assignment during
the continuance of any Event of Default, and (y) the amount of the Loans or
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $1,000,000 (or,
if less, the entire remaining amount of such Lender’s Loans or Commitment),
(ii) the parties to each such assignment shall (A) electronically execute and
deliver to the Administrative Agent an Assignment and Acceptance via an electronic
settlement system acceptable to the Administrative Agent (which initially shall
be ClearPar, LLC) or (B) manually execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with a processing and recordation
fee of $3,500 (unless such fee is waived at the discretion of the
Administrative Agent) and (iii) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire and
all applicable tax documentation.  Upon
acceptance and recording pursuant to paragraph (e) of this Section 9.04, from
and after the effective date specified in each Assignment and Acceptance,
(A) the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and

 

80

 

Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.14, 2.16, 2.20 and 9.05,
as well as to any Fees accrued for its account and not yet paid).

 

(c)  By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the
other parties hereto as follows:  (i)
such assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim and that
its Term Loan Commitment and Revolving Credit Commitment, and the outstanding
balances of its Term Loans and Revolving Loans, in each case without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Acceptance, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Agreement, together with copies of the most recent financial
statements referred to in Section 3.05(a) or delivered pursuant to Section 5.04
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without reliance upon the
Administrative Agent, the Collateral Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Administrative Agent and the Collateral Agent, respectively, by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their
terms all the obligations which by the terms of this Agreement are required to
be performed by it as a Lender.

 

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

 

81

 

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

 

(f)  Each Lender may without the consent
of the Borrower, the Swingline Lender, the Issuing Bank or the Administrative
Agent sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided, however, that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.14, 2.16 and 2.20 to the same extent as if they were Lenders (but, with
respect to any particular participant, to no greater extent than the Lender
that sold the participation to such participant) and (iv) the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement, and such Lender shall retain the sole
right to enforce the obligations of the Borrower relating to the Loans or L/C
Disbursements and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers
decreasing any fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans, extending any scheduled principal
payment date or date fixed for the payment of interest on the Loans, increasing
or extending the Commitments or releasing any Guarantor or all or substantially
all of the Collateral).

 

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

 

(h)  Any Lender may (without the consent
of the Borrower or the Administrative Agent) at any time assign all or any
portion of its rights under this Agreement to secure extensions of credit to
such Lender or in support of obligations owed by such Lender (including, if
such Lender is a fund that invests in bank loans, to a trustee for holders of
obligations owed, or securities issued, by such fund); provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto

 

82

 

and any foreclosure or exercise of remedies
by such assignee or trustee shall be subject to the provisions of this Section
9.04 regarding assignments in all respects.

 

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

 

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

 

(k)  In the event that Standard &
Poor’s Ratings Service, Moody’s Investors Service, Inc., and Thompson’s
BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are
insurance companies (or Best’s Insurance Reports, if such insurance company is
not rated by InsuranceWatch Ratings Service)) shall, after the date that any
Lender becomes a Revolving Credit Lender, downgrade the long-term certificate
deposit ratings of such Lender, and the resulting ratings shall be below BBB-,
Baa3 and C (or BB, in the case of a Lender that is an insurance company (or B,
in the case of an insurance company not rated by InsuranceWatch Ratings
Service)), then the Issuing Bank shall have the right, but not the obligation,
at its own expense, upon notice to such Lender and the Administrative Agent, to
replace (or to request the Borrower to use its reasonable efforts to replace)
such Lender with an assignee (in accordance with and subject to the restrictions
contained in paragraph (b) above), and such Lender hereby agrees to transfer
and assign without recourse (in accordance with and subject to the restrictions
contained in paragraph (b) above) all its interests, rights and obligations in
respect of its

 

83

 

Revolving Credit Commitment to such assignee;
provided, however, that (i) no
such assignment shall conflict with any law, rule and regulation or order of
any Governmental Authority and (ii) the Issuing Bank or such assignee, as the
case may be, shall pay to such Lender in immediately available funds on the
date of such assignment the principal of and interest accrued to the date of
payment on the Loans made by such Lender hereunder and all other amounts
accrued for such Lender’s account or owed to it hereunder.

 

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

 

(b)  The Borrower and Holdings agree,
jointly and severally, to indemnify the Administrative Agent, the Collateral
Agent, each Lender, the Issuing Bank and each Related Party of any of the
foregoing persons (each such person being called an “Indemnitee”) against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or
as a result of (i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated hereby or thereby,
the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or the consummation of the Transactions and
the other transactions contemplated hereby or thereby, (ii) the use of the
proceeds of the Loans or issuance of Letters of Credit, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) any actual or alleged
presence or Release of Hazardous Materials on any property currently or
formerly owned or operated by the Borrower or any of the Subsidiaries, or any
Environmental Liability related in any way to the Borrower or the Subsidiaries;
provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or wilful misconduct of such Indemnitee.

 

(c)  To the extent that Holdings and the
Borrower fail to pay any amount required to be paid by them to the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent, the Collateral Agent, the Issuing Bank or
the Swingline Lender, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the

 

84

 

case may be, was incurred by or asserted
against the Administrative Agent, the Collateral Agent, the Issuing Bank or the
Swingline Lender in its capacity as such. 
For purposes hereof, a Lender’s “pro rata share” shall be determined
based upon its share of the sum of the Aggregate Revolving Credit Exposure,
outstanding Term Loans and unused Commitments at the time.

 

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

 

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

 

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

 

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

 

SECTION
9.08. Waivers; Amendment.  (a) 
No failure or delay of the Administrative Agent, the Collateral Agent,
any Lender or the Issuing Bank in exercising any power or right hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any

 

85

 

single or partial exercise of any such right
or power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of any
other right or power.  The rights and
remedies of the Administrative Agent, the Collateral Agent, the Issuing Bank
and the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise
have.  No waiver of any provision of
this Agreement or any other Loan Document or consent to any departure by the
Borrower or any other Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given.  No notice or demand on
the Borrower or Holdings in any case shall entitle the Borrower or Holdings to
any other or further notice or demand in similar or other circumstances.

 

(b)  Neither this Agreement nor any of the
Security Documents nor any provision hereof or thereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower, Holdings and the Required Lenders; provided, however, that (x) the Borrower,
Holdings and the Administrative Agent may enter into an amendment to effect the
provisions of Section 2.24(b) upon the effectiveness of any Incremental Term
Loan Assumption Agreement (and any such amendment shall in any event be deemed
to have occurred upon such effectiveness) and (y) no such agreement under this
Section 9.08(b) shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan or any date for reimbursement of an L/C Disbursement,
or waive or excuse any such payment or any part thereof, or decrease the rate
of interest on any Loan or L/C Disbursement, without the prior written consent
of each Lender affected thereby, (ii) increase or extend the Commitment or decrease
or extend the date for payment of any Fees of or any other amount actually due
and payable hereunder to any Lender without the prior written consent of such
Lender, (iii) amend or modify the pro rata requirements of Section 2.17, the
provisions of Section 9.04(j), the provisions of this Section, or release any
Guarantor or all or substantially all of the Collateral, without the prior
written consent of each Lender, (iv) change the provisions of any Loan Document
in a manner that by its terms adversely affects the rights in respect of
payments due to Lenders holding Loans of one Class differently from the rights
of Lenders holding Loans of any other Class without the prior written consent
of Lenders holding a majority in interest of the outstanding Loans and unused
Commitments of each adversely affected Class, (v) modify the protections
afforded to an SPC pursuant to the provisions of Section 9.04(i) without the
written consent of such SPC, (vi) amend, modify or waive compliance by Holdings
or the Borrower with the provisions of Section 6.11, 6.12 or 6.13 (or with the
provisions of Section 4.01, as it relates to an Event of Default following a
breach of the provisions of Section 6.11, 6.12 or 6.13) without the prior
written consent of Revolving Lenders holding a majority in interest of the
Revolving Credit Commitments or (vii) reduce the percentage contained in the
definition of the term “Required Lenders” without the prior written consent of
each Lender (it being understood that with the consent of the Required Lenders,
additional extensions of credit pursuant to this Agreement may be included in
the determination of the Required Lenders on substantially the same basis as
the Term Loan Commitments and Revolving Credit Commitments on the date hereof);
provided  further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender hereunder or under any other Loan Document without the prior written
consent of the Administrative Agent, the Collateral Agent, the Issuing Bank or
the Swingline Lender.

 

86

 

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

 

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

 

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

 

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

 

87

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION
9.16. Confidentiality.  (a)  Each of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (i) to its and its Affiliates’
officers, directors, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (ii) to the
extent requested by any regulatory authority or quasi-regulatory authority
(such as the National Association of Insurance Commissioners), (iii) to the
extent

 

88

 

required by applicable laws or regulations or
by any subpoena or similar legal process, (iv) in connection with the
exercise of any remedies hereunder or under the other Loan Documents or any
suit, action or proceeding relating to the enforcement of its rights hereunder
or thereunder, (v) subject to an agreement containing provisions
substantially the same as those of this Section 9.16, to (A) any
actual or prospective assignee of or participant in any of its rights or
obligations under this Agreement and the other Loan Documents or (B) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower or any Subsidiary or any of their
respective obligations, (vi) with the consent of the Borrower or (vii) to
the extent such Information becomes publicly available other than as a result
of a breach of this Section 9.16.  For
the purposes of this Section, “Information”
shall mean all information received from the Borrower or Holdings and related
to the Borrower or Holdings or their business, other than any such information
that was available to the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender on a nonconfidential basis prior to its disclosure
by the Borrower or Holdings; provided
that, in the case of Information received from the Borrower or Holdings after
the date hereof, such information is clearly identified at the time of delivery
as confidential.  Any person required to
maintain the confidentiality of Information as provided in this Section 9.16
shall be considered to have complied with its obligation to do so if such
person has exercised the same degree of care to maintain the confidentiality of
such Information as such person would accord its own confidential information.

 

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

 

89

 

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

 

	
   

  	
  TD FUNDING
  CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ Gregory
  Rufus

  	
   

  
	
   

  	
   

  	
  Name:
  Gregory Rufus

  
	
   

  	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  TD
  ACQUISITION CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ Gregory
  Rufus

  	
   

  
	
   

  	
   

  	
  Name:
  Gregory Rufus

  
	
   

  	
   

  	
  Title: Vice
  President

  
					

 

 

	
  The
  undersigned hereby acknowledges and agrees that, upon the effectiveness of
  the Merger, it will succeed by operation of law to all of the rights and
  obligations of the Borrower set forth herein and that all references herein
  to the “Borrower” shall thereupon be deemed to be references to the
  undersigned. 

  	
   

  

 

	
  TRANSDIGM
  INC.,

  
	
  by

  
	
  /s/ W.
  Nicholas Howley

  	
   

  
	
  Name: W.
  Nicholas Howley

  
	
  Title: Chief
  Executive Officer

  

 

 

	
  The
  undersigned hereby acknowledges and agrees that, upon the effectiveness of
  the Merger, it will succeed by operation of law to all of the rights and
  obligations of Holdings set forth herein and that all references herein to
  “Holdings” shall thereupon be deemed to be references to the undersigned. 

  	
   

  

 

	
  TRANSDIGM
  HOLDING COMPANY,

  
	
  by

  
	
   

  
	
  /s/ W.
  Nicholas Howley

  	
   

  
	
  Name: W.
  Nicholas Howley

  
	
  Title: Chief
  Executive Officer

  

 

90

 

	
   

  	
  CREDIT
  SUISSE FIRST BOSTON, acting through

  its New York branch, individually and as

  Administrative Agent, Collateral Agent and

  Swingline Lender,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ Robert
  Hetu

  	
   

  
	
   

  	
   

  	
  Name: Robert
  Hetu

  
	
   

  	
   

  	
  Title:
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ Doreen
  B. Welch

  	
   

  
	
   

  	
   

  	
  Name: Doreen
  B. Welch

  
	
   

  	
   

  	
  Title:
  Associate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF
  AMERICA, N.A.,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ Peter D.
  Griffith

  	
   

  
	
   

  	
   

  	
  Name: Peter
  D. Griffith

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UBS AG,
  CAYMAN ISLANDS BRANCH,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ Wilfred
  V. Saint

  	
   

  
	
   

  	
   

  	
  Name:
  Wilfred V. Saint

  
	
   

  	
   

  	
  Title:
  Associate Director, Banking Products

  Services, US

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ Thomas
  R. Salzano

  	
   

  
	
   

  	
   

  	
  Name: Thomas
  R. Salzano

  
	
   

  	
   

  	
  Title:
  Director, Banking Products Services, US

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GENERAL
  ELECTRIC CAPITAL

  CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ Diane L.
  Burton

  	
   

  
	
   

  	
   

  	
  Name: Diane
  L. Burton

  
	
   

  	
   

  	
  Title: Duly
  Authorized Signatory

  
	
   

  	
   

  	
   

  
										

 

91

 

SIGNATURE PAGE TO

TD FUNDING CORPORATION

CREDIT AGREEMENT

 

	
   

  	
  Name of
  Institution: National City Bank

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
  /s/ Daniel
  Raynor

  	
   

  
	
   

  	
   

  	
  Name: Daniel
  Raynor

  
	
   

  	
   

  	
  Title:
  Assistant Vice PresidentEXHIBIT 10.14

 

 

 

GUARANTEE AND COLLATERAL AGREEMENT

 

dated as of

 

July 22, 2003,

 

among

 

TD FUNDING CORPORATION,

 

TD ACQUISITION CORPORATION,

 

the Subsidiaries of TRANSDIGM INC. identified herein,

 

and

 

CREDIT SUISSE FIRST BOSTON,

as Collateral Agent

 

 

[CS&M Ref No. 5865-195]

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  
	
   

  
	
  Definitions

  
	
   

  
	
  SECTION
  1.01.  Credit Agreement

  	
  2

  
	
  SECTION
  1.02.  Other Defined Terms

  	
  2

  
	
   

  
	
  ARTICLE II

  
	
   

  
	
  Guarantee

  
	
   

  
	
  SECTION
  2.01.  Guarantee

  	
  7

  
	
  SECTION
  2.02.  Guarantee of Payment

  	
  7

  
	
  SECTION
  2.03.  No Limitations, Etc

  	
  8

  
	
  SECTION
  2.04.  Reinstatement

  	
  9

  
	
  SECTION
  2.05.  Agreement To Pay; Subrogation

  	
  9

  
	
  SECTION
  2.06.  Information

  	
  9

  
	
   

  
	
  ARTICLE III

  
	
   

  
	
  Pledge of Securities

  
	
   

  
	
  SECTION
  3.01.  Pledge

  	
  9

  
	
  SECTION
  3.02.  Delivery of the Pledged Collateral

  	
  10

  
	
  SECTION
  3.03.  Representations, Warranties and
  Covenants

  	
  10

  
	
  SECTION
  3.04.  Certification of Limited
  Liability Company Interests and Limited Partnership Interests

  	
  11

  
	
  SECTION
  3.05.  Registration in Nominee Name;
  Denominations

  	
  12

  
	
  SECTION
  3.06.  Voting Rights; Dividends and
  Interest, etc

  	
  12

  
	
   

  
	
  ARTICLE IV

  
	
   

  
	
  Security Interests in Personal Property

  
	
   

  
	
  SECTION
  4.01.  Security Interest

  	
  14

  
	
  SECTION
  4.02.  Representations and Warranties

  	
  15

  
	
  SECTION
  4.03.  Covenants

  	
  17

  
	
  SECTION
  4.04.  Other Actions

  	
  20

  
	
  SECTION
  4.05.  Covenants regarding Patent,
  Trademark and Copyright Collateral

  	
  23

  

 

 

	
  ARTICLE V

  
	
   

  
	
  Remedies

  
	
   

  
	
  SECTION
  5.01.  Remedies upon Default

  	
  24

  
	
  SECTION
  5.02.  Application of Proceeds

  	
  26

  
	
  SECTION
  5.03.  Grant of License to Use
  Intellectual Property

  	
  27

  
	
  SECTION
  5.04.  Securities Act, etc

  	
  27

  
	
   

  
	
  ARTICLE VI

  
	
   

  
	
  Indemnity, Subrogation and Subordination

  
	
   

  
	
  SECTION
  6.01.  Indemnity and Subrogation

  	
  28

  
	
  SECTION
  6.02.  Contribution and Subrogation

  	
  28

  
	
  SECTION
  6.03.  Subordination

  	
  29

  
	
   

  
	
  ARTICLE VII

  
	
   

  
	
  Miscellaneous

  
	
   

  
	
  SECTION
  7.01.  Notices

  	
  29

  
	
  SECTION
  7.02.  Security Interest Absolute

  	
  29

  
	
  SECTION
  7.03.  Survival of Agreement

  	
  29

  
	
  SECTION
  7.04.  Binding Effect; Several
  Agreement

  	
  30

  
	
  SECTION
  7.05.  Successors and Assigns

  	
  30

  
	
  SECTION
  7.06.  Collateral Agent’s Fees and
  Expenses; Indemnification

  	
  30

  
	
  SECTION
  7.07.  Collateral Agent Appointed
  Attorney-in-Fact

  	
  31

  
	
  SECTION
  7.08.  Applicable Law

  	
  32

  
	
  SECTION
  7.09.  Waivers; Amendment

  	
  32

  
	
  SECTION
  7.10.  Waiver of Jury Trial

  	
  32

  
	
  SECTION
  7.11.  Severability

  	
  32

  
	
  SECTION
  7.12.  Counterparts

  	
  33

  
	
  SECTION
  7.13.  Headings

  	
  33

  
	
  SECTION
  7.14.  Jurisdiction; Consent to
  Service of Process

  	
  33

  
	
  SECTION
  7.15.  Termination or Release

  	
  34

  
	
  SECTION
  7.16.  Additional Grantors

  	
  34

  
	
  SECTION
  7.17.  Right of Setoff

  	
  35

  

 

2

 

	
  Schedules

  	
   

  
	
   

  	
   

  
	
  Schedule I

  	
  Subsidiary Guarantors

  	
   

  
	
  Schedule II

  	
  Capital
  Stock; Debt Securities

  	
   

  
	
  Schedule III

  	
  Intellectual
  Property

  	
   

  
	
   

  	
   

  
	
  Exhibits

  	
   

  
	
   

  	
   

  
	
  Exhibit
  A

  	
  Form
  of Supplement

  	
   

  
	
  Exhibit
  B

  	
  Form of Perfection Certificate

  	
   

  

 

3

 

GUARANTEE AND
COLLATERAL AGREEMENT dated as of July 22, 2003, among TD FUNDING
CORPORATION, a Delaware corporation (the “Borrower”),
TD ACQUISITION CORPORATION, a Delaware corporation (“Holdings”),
the Subsidiaries of the Borrower identified herein and CREDIT SUISSE FIRST
BOSTON (“CSFB”), as collateral agent (in such
capacity, the “Collateral Agent”).

 

PRELIMINARY STATEMENT

 

Reference is
made to the Credit Agreement dated as of July 22, 2003 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, Holdings, the
lenders from time to time party thereto (the “Lenders”)
and CSFB, as administrative agent (in such capacity, the “Administrative Agent”). 
The Lenders have agreed to extend credit to the Borrower pursuant to,
and upon the terms and conditions specified in, the Credit Agreement.  The obligations of the Lenders to extend
such credit to the Borrower are conditioned upon, among other things, the
execution and delivery of this Agreement by Holdings, the Borrower and the
Subsidiary Guarantors.  Holdings and the
Subsidiary Guarantors are affiliates of the Borrower, will derive substantial
benefits from the extension of credit to the Borrower pursuant to the Credit
Agreement and are willing to execute and deliver this Agreement in order to
induce the Lenders to extend such credit.

 

TD Holding
Corporation, a Delaware corporation and the owner on the Closing Date of all
the issued and outstanding capital stock of Holdings, will acquire all the
capital stock of TransDigm Holding Company, a Delaware corporation (“TransDigm
Holdings”) and TransDigm Inc., a Delaware corporation and a wholly owned
subsidiary of TransDigm Holdings (“TransDigm”), pursuant to an Agreement
and Plan of Merger dated as of June 6, 2003 (the “Merger Agreement”),
between Holdings and TransDigm Holdings. 
Pursuant to the Merger Agreement, Holdings will be merged with and into
TransDigm Holdings, with TransDigm Holdings continuing as the surviving
corporation in such merger and, immediately thereafter, the Borrower will be
merged with and into TransDigm, with TransDigm continuing as the surviving corporation
in such merger (such mergers, collectively, the “Merger”).  Upon the effectiveness of the Merger,
(a) TransDigm Holdings will succeed to all rights and obligations of
Holdings by operation of law and all references herein and in the other Loan
Documents to the term “Holdings” shall thereupon be deemed to be
references to TransDigm Holdings and (b) TransDigm will succeed to all
rights and obligations of the Borrower by operation of law and all references
herein and in the other Loan Documents to the term “Borrower” shall
thereupon be deemed to be references to TransDigm.

 

Accordingly,
the parties hereto agree as follows:

 

 

ARTICLE I

 

Definitions

 

SECTION 1.01.
Credit Agreement.  (a)  Capitalized terms used in this Agreement and
not otherwise defined herein have the meanings set forth in the Credit
Agreement.  All terms defined in the New
York UCC (as such term is defined herein) and not defined in this Agreement
have the meanings specified therein. 
All references to the Uniform Commercial Code shall mean the New York
UCC.

 

(b) The rules
of construction specified in Section 1.02 of the Credit Agreement also
apply to this Agreement.

 

SECTION 1.02.
Other Defined Terms.  As used in
this Agreement, the following terms have the meanings specified below:

 

“Account”
has the meaning assigned to such term in Section 9-102 of the New York
UCC.

 

“Account Debtor” means any person who is or who
may become obligated to any Grantor under, with respect to or on account of an
Account.

 

“Accounts Receivable” shall mean all Accounts and
all right, title and interest in any returned goods, together will all rights,
titles, securities and guarantees with respect thereto, including any rights to
stoppage in transit, replevin, reclamation and resales, and all related security
interests, liens and pledges, whether voluntary or involuntary, in each case
whether now existing or owned or hereafter arising or acquired.

 

“Administrative
Agent” has the meaning assigned to such term in the preliminary statement
of this Agreement.

 

“Article 9 Collateral” has the meaning
assigned to such term in Section 4.01.

 

“Borrower”
has the meaning assigned to such term in the preamble of this Agreement.

 

“Claiming
Guarantor” has the meaning assigned to such term in Section 6.02.

 

“Collateral” means the Article 9 Collateral
and the Pledged Collateral.

 

“Collateral
Agent” has the meaning assigned to such term in the preamble of this
Agreement.

 

“Commercial
Tort Claim” has the meaning assigned to such term in Section 9-102 of
the New York UCC.

 

2

 

“Commodity
Intermediary” has the meaning assigned to such term in Section 9-102
of the New York UCC.

 

“Contributing
Guarantor” has the meaning assigned to such term in Section 6.02.

 

“Copyright License” means any written agreement,
now or hereafter in effect, granting any right to any third party under any
copyright now or hereafter owned by any Grantor or that such Grantor otherwise
has the right to license, or granting any right to any Grantor under any copyright
now or hereafter owned by any third party, and all rights of such Grantor under
any such agreement.

 

“Copyrights” means all of the following now owned
or hereafter acquired by any Grantor: 
(a) all copyright rights in any work subject to the copyright laws
of the United States or any other country, whether as author, assignee,
transferee or otherwise, and (b) all registrations and applications for
registration of any such copyright in the United States or any other country,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office (or any
successor office or any similar office in any other country), including those
listed on Schedule III.

 

“Credit Agreement” has the meaning assigned to
such term in the preliminary statement of this Agreement.

 

“CSFB”
has the meaning assigned to such term in the preamble of this Agreement.

 

“Deposit
Account” has the meaning assigned to such term in Section 9-102 of the
New York UCC.

 

“Electronic
Chattel Paper” has the meaning assigned to such term in Section 9-102
of the New York UCC.

 

“Entitlement
Holder” has the meaning assigned to such term in Section 8-102 of the
New York UCC.

 

“Entitlement
Order” has the meaning assigned to such term in Section 8-102 of the
New York UCC.

 

“Equipment”
has the meaning assigned to such term in Section 9-102 of the New York
UCC.

 

“Equity Interests” means shares of capital stock,
partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity interests in any person, or any
obligations convertible into or exchangeable for, or giving any person a right,
option or warrant to acquire such equity interests or such convertible or
exchangeable obligations.

 

3

 

“Federal
Securities Laws” has the meaning assigned to such term in
Section 5.04.

 

“Financial
Asset” has the meaning assigned to such term in Section 8-102 of the
New York UCC.

 

“General Intangibles” means all choses in action
and causes of action and all other intangible personal property of any Grantor
of every kind and nature (other than Accounts) now owned or hereafter acquired
by any Grantor, including all rights and interests in partnerships, limited
partnerships, limited liability companies and other unincorporated entities,
corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee,
Hedging Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts.

 

“Grantors” means Holdings, the Borrower and the
Subsidiary Guarantors.

 

“Guarantors” means Holdings and the Subsidiary
Guarantors.

 

“Holdings”
has the meaning assigned to such term in the preamble of this Agreement.

 

“Instrument”
has the meaning assigned to such term in Section 9-102 of the New York
UCC.

 

“Intellectual Property” means all intellectual and
similar property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents, Copyrights,
Licenses, Trademarks, trade secrets, confidential or proprietary technical and
business information, know-how, show-how or other data or information, software
and databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions
to, and books and records describing or used in connection with, any of the
foregoing.

 

“Inventory”
has the meaning assigned to such term in Section 9-102 of the New York
UCC.

 

“Investment
Property” has the meaning assigned to such term in Section 9-102 of
the New York UCC.

 

“Lenders”
has the meaning assigned to such term in the preliminary statement of this
Agreement.

 

“Letter-of-Credit
Right” has the meaning assigned to such term in Section 9-102 of the
New York UCC.

 

4

 

“License” means any Patent License, Trademark
License, Copyright License or other license or sublicense agreement to which
any Grantor is a party, including those listed on Schedule III.

 

“Loan Document Obligations” means (a) the due and
punctual payment of (i) the principal of and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by the Borrower under the Credit Agreement in
respect of any Letter of Credit, when and as due, including payments in respect
of reimbursement of disbursements, interest thereon and obligations to provide
cash collateral, and (iii) all other monetary obligations of the Borrower to any
of the Secured Parties under the Credit Agreement and each of the other Loan
Documents, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all
other obligations of the Borrower under or pursuant to the Credit Agreement and
each of the other Loan Documents, and (c) the due and punctual payment and
performance of all the obligations of each other Loan Party under or pursuant
to this Agreement and each of the other Loan Documents.

 

“Merger”
has the meaning assigned to such term in the preliminary statement of this
Agreement.

 

“Merger
Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.

 

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

 

“Obligations” means (a) the Loan Document
Obligations and (b) the due and punctual payment and performance of all
obligations of each Loan Party under each Hedging Agreement that (i) is in
effect on the Closing Date with a counterparty that is a Lender or an Affiliate
of a Lender as of the Closing Date or (ii) is entered into after the Closing
Date with any counterparty that is a Lender or an Affiliate of a Lender at the
time such Hedging Agreement is entered into unless such Hedging Agreement
provides the obligations thereunder are not “Obligations” as defined herein.

 

“Patent License” means any written agreement, now
or hereafter in effect, granting to any third party any right to make, use or
sell any invention on which a patent, now or hereafter owned by any Grantor or
that any Grantor otherwise has the right to license, is in existence, or
granting to any Grantor any right to make, use or sell any invention on which a
patent, now or hereafter owned by any third party, is in existence, and all
rights of any Grantor under any such agreement.

 

5

 

“Patents” means all of the following now owned or
hereafter acquired by any Grantor: 
(a) all letters patent of the United States or the equivalent
thereof in any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or the equivalent thereof
in any other country, including registrations, recordings and pending
applications in the United States Patent and Trademark Office (or any successor
or any similar offices in any other country), including those listed on
Schedule III, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.

 

“Perfection Certificate” means a certificate
substantially in the form of Exhibit B, completed and supplemented with the schedules
and attachments contemplated thereby, and duly executed by two Financial
Officers.

 

“Pledged Collateral” has the meaning assigned to
such term in Section 3.01.

 

“Pledged Debt Securities” has the meaning assigned
to such term in Section 3.01.

 

“Pledged Securities” means any promissory notes,
stock certificates or other securities now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.

 

“Pledged Stock” has the meaning assigned to such
term in Section 3.01.

 

“Proceeds” has the meaning assigned to such term
in Section 9-102 of the New York UCC.

 

“Secured Parties” means (a) the Lenders,
(b) the Administrative Agent, (c) the Collateral Agent, (d) any
Issuing Bank, (e) each counterparty to any Hedging Agreement with a Loan
Party that either (i) is in effect on the Closing Date if such counterparty is
a Lender or an Affiliate of a Lender as of the Closing Date or (ii) is entered
into after the Closing Date if such counterparty is a Lender or an Affiliate of
a Lender at the time such Hedging Agreement is entered into, (f) the
beneficiaries of each indemnification obligation undertaken by any Loan Party
under any Loan Document and (g) the successors and assigns of each of the
foregoing.

 

“Securities
Account” has the meaning assigned to such term in Section 8-501 of the
New York UCC.

 

“Securities
Intermediary” has the meaning assigned to such term in Section 8-102
of the New York UCC.

 

“Security”
has the meaning assigned to such term in Section 8-102 of the New York
UCC.

 

6

 

“Security Interest” has the meaning assigned to
such term in Section 4.01.

 

“Subsidiary Guarantors” means (a) the Subsidiaries
identified on Schedule I and (b) each other Subsidiary that becomes a
party to this Agreement as a Subsidiary Guarantor after the Closing Date.

 

“Trademark License” means any written agreement,
now or hereafter in effect, granting to any third party any right to use any
trademark now or hereafter owned by any Grantor or that any Grantor otherwise
has the right to license, or granting to any Grantor any right to use any
trademark now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement.

 

“Trademarks” means all of the following now owned
or hereafter acquired by any Grantor: 
(a) all trademarks, service marks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, trade
dress, logos, other source or business identifiers, designs and general
intangibles of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office (or
any successor office) or any similar offices in any State of the United States
or any other country or any political subdivision thereof, and all extensions
or renewals thereof, including those listed on Schedule III, (b) all
goodwill associated therewith or symbolized thereby and (c) all other assets,
rights and interests that uniquely reflect or embody such goodwill.

 

“TransDigm”
has the meaning assigned to such term in the preliminary statement of this
Agreement.

 

“TransDigm
Holdings” has the meaning assigned to such term in the preliminary
statement of this Agreement.

 

ARTICLE II

 

Guarantee

 

SECTION 2.01.
Guarantee.  Each Guarantor
unconditionally guarantees, jointly with the other Guarantors and severally, as
a primary obligor and not merely as a surety, the due and punctual payment and
performance of the Obligations.  Each of
the Guarantors further agrees that the Obligations may be extended or renewed,
in whole or in part, without notice to or further assent from it, and that it
will remain bound upon its guarantee notwithstanding any extension or renewal
of any Obligation.  Each of the
Guarantors waives presentment to, demand of payment from and protest to the
Borrower or any other Loan Party of any of the Obligations, and also waives
notice of acceptance of its guarantee and notice of protest for nonpayment.

 

SECTION 2.02.
Guarantee of Payment.  Each of
the Guarantors further agrees that its guarantee hereunder constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by the Collateral

 

7

 

Agent or any other Secured
Party to any security held for the payment of the Obligations or to any balance
of any Deposit Account or credit on the books of the Collateral Agent or any
other Secured Party in favor of the Borrower or any other person.

 

SECTION 2.03.
No Limitations, Etc. 
(a)  Except for termination of a Guarantor’s obligations
hereunder as expressly provided in Section 7.15, the obligations of each
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.  Without limiting the generality of the
foregoing, the obligations of each Guarantor hereunder shall not be discharged
or impaired or otherwise affected by (i) the failure of the Collateral
Agent or any other Secured Party to assert any claim or demand or to enforce any
right or remedy under the provisions of any Loan Document or otherwise;
(ii) any rescission, waiver, amendment or modification of, or any release
from any of the terms or provisions of, any Loan Document or any other
agreement, including with respect to any other Guarantor under this Agreement;
(iii) the release of any security held by the Collateral Agent or any
other Secured Party for the Obligations or any of them; (iv) any default,
failure or delay, wilful or otherwise, in the performance of the Obligations;
or (v) any other act or omission that may or might in any manner or to any
extent vary the risk of any Guarantor or otherwise operate as a discharge of
any Guarantor as a matter of law or equity (other than the indefeasible payment
in full in cash of all the Obligations). 
Each Guarantor expressly authorizes the Collateral Agent to take and
hold security for the payment and performance of the Obligations, to exchange,
waive or release any or all such security (with or without consideration), to
enforce or apply such security and direct the order and manner of any sale
thereof in its sole discretion or to release or substitute any one or more
other guarantors or obligors upon or in respect of the Obligations, all without
affecting the obligations of any Guarantor hereunder.

 

(b) To the
fullest extent permitted by applicable law, each Guarantor waives any defense
based on or arising out of any defense of the Borrower or any other Loan Party
or the unenforceability of the Obligations or any part thereof from any cause,
or the cessation from any cause of the liability of the Borrower or any other
Loan Party, other than the indefeasible payment in full in cash of all the
Obligations.  The Collateral Agent and
the other Secured Parties may, at their election, foreclose on any security
held by one or more of them by one or more judicial or nonjudicial sales,
accept an assignment of any such security in lieu of foreclosure, compromise or
adjust any part of the Obligations, make any other accommodation with the Borrower
or any other Loan Party or exercise any other right or remedy available to them
against the Borrower or any other Loan Party, without affecting or impairing in
any way the liability of any Guarantor hereunder except to the extent the
Obligations have been fully and indefeasibly paid in full in cash.  To the fullest extent permitted by
applicable law, each Guarantor waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other
right or remedy of such Guarantor against the Borrower or any other Loan Party,
as the case may be, or any security.

 

8

 

SECTION 2.04.
Reinstatement.  Each of the
Guarantors agrees that its guarantee hereunder shall continue to be effective
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any Obligation is rescinded or must otherwise be restored by the
Collateral Agent or any other Secured Party upon the bankruptcy or
reorganization of the Borrower, any other Loan Party or otherwise.

 

SECTION 2.05.
Agreement To Pay; Subrogation. 
In furtherance of the foregoing and not in limitation of any other right
that the Collateral Agent or any other Secured Party has at law or in equity
against any Guarantor by virtue hereof, upon the failure of the Borrower or any
other Loan Party to pay any Obligation when and as the same shall become due,
whether at maturity, by acceleration, after notice of prepayment or otherwise,
each Guarantor hereby promises to and will forthwith pay, or cause to be paid,
to the Collateral Agent for distribution to the applicable Secured Parties in
cash the amount of such unpaid Obligation. 
Upon payment by any Guarantor of any sums to the Collateral Agent as
provided above, all rights of such Guarantor against the Borrower or any other
Guarantor arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article VI.

 

SECTION 2.06.
Information.  Each Guarantor
assumes all responsibility for being and keeping itself informed of the
Borrower’s and each other Loan Party’s financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Obligations
and the nature, scope and extent of the risks that such Guarantor assumes and
incurs hereunder, and agrees that none of the Collateral Agent or the other
Secured Parties will have any duty to advise such Guarantor of information
known to it or any of them regarding such circumstances or risks.

 

ARTICLE III

Pledge of Securities

 

SECTION 3.01.
Pledge.  As security for the
payment or performance, as the case may be, in full of the Obligations, each
Grantor hereby pledges to the Collateral Agent, its successors and assigns, for
the benefit of the Secured Parties, and hereby grants to the Collateral Agent,
its successors and assigns, for the benefit of the Secured Parties, a security
interest in, all of such Grantor’s right, title and interest in, to and under
(a) Equity Interests owned by it and listed on Schedule II and any
other Equity Interests obtained in the future by such Grantor and the
certificates representing all such Equity Interests (the “Pledged Stock”);
provided, however, that the Pledged Stock shall not include more
than 65% of the issued and outstanding voting Equity Interests of any Foreign
Subsidiary; (b)(i) the debt securities listed opposite the name of such
Grantor on Schedule II, (ii) any debt securities in the future issued
to such Grantor and (iii) the promissory notes and any other instruments
evidencing such debt securities (the “Pledged Debt Securities”);
(c) all other property that may be delivered to and held by the Collateral
Agent pursuant to the terms of this Section 3.01; (d) subject to
Section 3.06, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or

 

9

 

upon the conversion of, and all
other Proceeds received in respect of, the securities referred to in
clauses (a) and (b) above; (e) subject to Section 3.06, all
rights and privileges of such Grantor with respect to the securities and other
property referred to in clauses (a), (b), (c) and (d) above; and
(f) all Proceeds of any of the foregoing (the items referred to in clauses
(a) through (f) above being collectively referred to as the “Pledged
Collateral”).

 

TO HAVE AND TO
HOLD the Pledged Collateral, together with all right, title, interest, powers,
privileges and preferences pertaining or incidental thereto, unto the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.

 

SECTION 3.02.
Delivery of the Pledged Collateral. 
(a)  Each Grantor agrees promptly to deliver or cause to be
delivered to the Collateral Agent any and all Pledged Securities.

 

(b) Each
Grantor will cause any Indebtedness for borrowed money owed to such Grantor by
any person in an amount that exceeds $200,000 that is evidenced by a duly
executed promissory note to be pledged and delivered to the Collateral Agent,
duly endorsed in a manner satisfactory to the Collateral Agent.  Without limiting the foregoing, all
promissory notes in favor of any Grantor shall be delivered to the Collateral
Agent promptly after request of the Collateral Agent.

 

(c) Upon
delivery to the Collateral Agent, (i) any Pledged Securities shall be
accompanied by stock powers duly executed in blank or other instruments of
transfer satisfactory to the Collateral Agent and by such other instruments and
documents as the Collateral Agent may reasonably request and (ii) all
other property comprising part of the Pledged Collateral shall be accompanied
by proper instruments of assignment duly executed by the applicable Grantor and
such other instruments or documents as the Collateral Agent may reasonably
request.  Each delivery of Pledged
Securities shall be accompanied by a schedule describing the securities, which
schedule shall be attached hereto as Schedule II and made a part hereof; provided
that failure to attach any such schedule hereto shall not affect the validity
of such pledge of such Pledged Securities. 
Each schedule so delivered shall supplement any prior schedules so
delivered.

 

SECTION 3.03.
Representations, Warranties and Covenants.  The Grantors jointly and severally represent, warrant and
covenant to and with the Collateral Agent, for the benefit of the Secured
Parties, that:

 

(a) Schedule II correctly sets forth the percentage of the issued
and outstanding shares of each class of the Equity Interests of the issuer
thereof represented by such Pledged Stock and includes all Equity Interests,
debt securities and promissory notes required to be pledged hereunder;

 

(b) except for the security interests granted hereunder, each of the
Grantors (i) is and, subject to any transfers made in compliance with the
Credit Agreement, will continue to be the direct owner, beneficially and of
record, of the

 

10

 

Pledged
Securities indicated on Schedule II as owned by such Grantor,
(ii) holds the same free and clear of all Liens, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit to exist
any security interest in or other Lien on, the Pledged Collateral, other than
Liens created by this Agreement or as permitted by the Credit Agreement and
transfers made in compliance with the Credit Agreement, and (iv) subject
to Section 3.06, will cause any and all Pledged Collateral, whether for
value paid by the Grantor or otherwise, to be forthwith deposited with the Collateral
Agent and pledged or assigned hereunder;

 

(c) except for restrictions and limitations imposed by the Loan
Documents or securities laws generally, the Pledged Collateral (other than
Pledged Collateral representing less than all of the Equity Interests of a
person) is and will continue to be freely transferable and assignable, and none
of the Pledged Collateral is or will be subject to any option, right of first
refusal, shareholders agreement, charter or by-law provisions or contractual
restriction of any nature that might prohibit, impair, delay or otherwise
affect the pledge of such Pledged Collateral hereunder, the sale or disposition
thereof pursuant hereto or the exercise by the Collateral Agent of rights and
remedies hereunder;

 

(d) each of the Grantors (i) has the power and authority to pledge
the Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated and (ii) will defend its title or interest thereto or therein
against any and all Liens (other than Liens created by this Agreement or as
permitted by the Credit Agreement), however arising, of all persons whomsoever;

 

(e) no consent or approval of any Governmental Authority, any
securities exchange or any other person was or is necessary to the validity of
the pledge of the Pledged Collateral effected hereby (other than such as have
been obtained and are in full force and effect and except with respect to
Pledged Collateral in the form of Equity Interests in joint ventures);

 

(f) by virtue of the execution and delivery by the Grantors of this
Agreement, when any Pledged Securities are delivered to the Collateral Agent in
accordance with this Agreement, the Collateral Agent will obtain a legal, valid
and perfected first priority lien upon and security interest in such Pledged
Securities as security for the payment and performance of the Obligations; and

 

(g) the pledge effected hereby is effective to vest in the Collateral
Agent, for the benefit of the Secured Parties, the rights of the Collateral
Agent in the Pledged Collateral as set forth herein.

 

SECTION 3.04.
Certification of Limited Liability Company Interests and Limited Partnership
Interests.  Each interest in any
limited liability company or limited partnership controlled by any Grantor and
pledged hereunder shall be represented by a certificate, shall be a “security”
within the meaning of Article 8 of the New York UCC and shall be governed
by Article 8 of the New York UCC.

 

11

 

SECTION 3.05.
Registration in Nominee Name; Denominations.  The Collateral Agent, on behalf of the Secured Parties, shall
have the right (in its sole and absolute discretion) to hold the Pledged
Securities in its own name as pledgee, the name of its nominee (as pledgee or as
sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank
or in favor of the Collateral Agent. 
Each Grantor will promptly give to the Collateral Agent copies of any
notices or other communications received by it with respect to Pledged
Securities registered in the name of such Grantor.  The Collateral Agent shall at all times have the right to
exchange the certificates representing Pledged Securities for certificates of
smaller or larger denominations for any purpose consistent with this Agreement.

 

SECTION 3.06.
Voting Rights; Dividends and Interest, etc.  (a)  Unless and until an Event of Default shall have
occurred and be continuing and the Collateral Agent shall have given the
Grantors at least two Business Days’ notice of its intent to exercise its
rights under this Agreement (which notice shall be deemed to have been given
immediately upon the occurrence of an Event of Default with respect to Holdings
or the Borrower under paragraph (g) or (h) of Article VII of the Credit
Agreement):

 

(i)                                     Each Grantor shall
be entitled to exercise any and all voting and/or other consensual rights and
powers inuring to an owner of Pledged Securities or any part thereof for any
purpose consistent with the terms of this Agreement, the Credit Agreement and
the other Loan Documents; provided, however, that such rights and
powers shall not be exercised in any manner that could materially and adversely
affect the rights inuring to a holder of any Pledged Securities or the rights
and remedies of any of the Collateral Agent or the other Secured Parties under
this Agreement or the Credit Agreement or any other Loan Document or the
ability of the Secured Parties to exercise the same.

 

(ii)                                  The Collateral Agent
shall execute and deliver to each Grantor, or cause to be executed and
delivered to each Grantor, all such proxies, powers of attorney and other
instruments as a Grantor may reasonably request for the purpose of enabling
such Grantor to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to subparagraph (i) above.

 

(iii)                               Each Grantor shall be
entitled to receive and retain any and all dividends, interest, principal and
other distributions paid on or distributed in respect of the Pledged Securities
to the extent and only to the extent that such dividends, interest, principal
and other distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Credit Agreement, the other
Loan Documents and applicable laws; provided, however, that any
noncash dividends, interest, principal or other distributions that would
constitute Pledged Stock or Pledged Debt Securities, whether resulting from a
subdivision, combination or reclassification of the outstanding Equity
Interests of the issuer of any Pledged Securities or received in exchange for
Pledged

 

12

 

Securities or any part thereof, or in redemption thereof, or as a
result of any merger, consolidation, acquisition or other exchange of assets to
which such issuer may be a party or otherwise, shall be and become part of the
Pledged Collateral, and, if received by any Grantor, shall not be commingled by
such Grantor with any of its other funds or property but shall be held separate
and apart therefrom, shall be held in trust for the benefit of the Collateral
Agent and shall be forthwith delivered to the Collateral Agent in the same form
as so received (with any necessary endorsement).  This paragraph (iii) shall not apply to dividends between or among
the Borrower and the Subsidiary Guarantors only of property subject to a
perfected security interest under this Agreement; provided that the
Borrower notifies the Collateral Agent in writing, specifically referring to
this Section 3.06 at the time of such dividend and takes any actions the
Collateral Agent reasonably specifies to ensure the continuance of its
perfected security interest in such property under this Agreement.

 

(b) Upon the
occurrence and during the continuance of an Event of Default, after the
Collateral Agent shall have notified (or shall be deemed to have notified) the
Grantors of the suspension of their rights under paragraph (a)(iii) of this
Section 3.06, then all rights of any Grantor to dividends, interest,
principal or other distributions that such Grantor is authorized to receive
pursuant to paragraph (a)(iii) of this Section 3.06 shall cease, and
all such rights shall thereupon become vested in the Collateral Agent, which
shall have the sole and exclusive right and authority to receive and retain
such dividends, interest, principal or other distributions.  All dividends, interest, principal or other
distributions received by any Grantor contrary to the provisions of this
Section 3.06 shall be held in trust for the benefit of the Collateral
Agent, shall be segregated from other property or funds of such Grantor and
shall be forthwith delivered to the Collateral Agent upon demand in the same
form as so received (with any necessary endorsement).  Any and all money and other property paid over to or received by
the Collateral Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be applied
in accordance with the provisions of Section 5.02.  After all Events of Default have been cured
or waived and the applicable Grantor or Grantors have delivered to the
Administrative Agent certificates to that effect, the Collateral Agent shall,
promptly after all such Events of Default have been cured or waived, repay to
each Grantor (without interest) all dividends, interest, principal or other
distributions that such Grantor would otherwise be permitted to retain pursuant
to the terms of paragraph (a)(iii) of this Section 3.06 and that remain in
such account.

 

(c) Upon the
occurrence and during the continuance of an Event of Default, after the
Collateral Agent shall have notified (or shall be deemed to have notified) the
Grantors of the suspension of their rights under paragraph (a)(i) of this
Section 3.06, then all rights of any Grantor to exercise the voting and
consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 3.06, and the obligations of the
Collateral Agent under paragraph (a)(ii) of this Section 3.06, shall
cease, and all such rights shall thereupon become vested in the Collateral
Agent, which

 

13

 

shall have the sole and
exclusive right and authority to exercise such voting and consensual rights and
powers; provided that, unless otherwise directed by the Required
Lenders, the Collateral Agent shall have the right from time to time following
and during the continuance of an Event of Default to permit the Grantors to
exercise such rights.

 

(d) Any notice
given by the Collateral Agent to the Grantors exercising its rights under
paragraph (a) of this Section 3.06 (i) may be given by telephone if
promptly confirmed in writing, (ii) may be given to one or more of the Grantors
at the same or different times and (iii) may suspend the rights of the Grantors
under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all
such rights (as specified by the Collateral Agent in its sole and absolute
discretion) and without waiving or otherwise affecting the Collateral Agent’s
rights to give additional notices from time to time suspending other rights so
long as an Event of Default has occurred and is continuing.

 

ARTICLE IV

Security Interests in Personal
Property

 

SECTION 4.01.
Security Interest. 
(a)  As security for the payment or performance, as the case
may be, in full of the Obligations, each Grantor hereby assigns and pledges to
the Collateral Agent, its successors and assigns, for the ratable benefit of
the Secured Parties, and hereby grants to the Collateral Agent, its successors
and assigns, for the ratable benefit of the Secured Parties, a security
interest (the “Security Interest”), in all right, title or interest in
or to any and all of the following assets and properties now owned or at any
time hereafter acquired by such Grantor or in which such Grantor now has or at
any time in the future may acquire any right, title or interest (collectively,
the “Article 9 Collateral”):

 

(i)                                     all Accounts;

 

(ii)                                  all Chattel Paper;

 

(iii)                               all cash and Deposit
Accounts;

 

(iv)                              all Documents;

 

(v)                                 all Equipment;

 

(vi)                              all General Intangibles;

 

(vii)                           all Instruments;

 

(viii)                        all Inventory;

 

(ix)                                all Investment
Property;

 

(x)                                   all Letter-of-Credit
Rights;

 

14

 

(xi)                                all books and records
pertaining to the Article 9 Collateral; and

 

(xii)                             to the extent not
otherwise included, all Proceeds and products of any and all of the foregoing
and all collateral security and guarantees given by any person with respect to
any of the foregoing.

 

Notwithstanding the foregoing,
the Article 9 Collateral shall not include any of the following assets now
owned or hereafter acquired which would otherwise be included in the Article 9
Collateral: (a) assets sold to a person which is not a Grantor in compliance
with the Credit Agreement, (b) assets owned by a Guarantor after the release of
the guarantee of such Guarantor pursuant to Section 7.15, (c) assets subject to
a Lien permitted by Sections 6.02(a), (c), (i) and (p) of the Credit Agreement
and (d) assets which contain a valid and enforceable prohibition on the
creation of a security interest therein so long as such prohibition remains in
effect and is valid notwithstanding Sections 9-406 and 9-408 of the applicable
Uniform Commercial Code.

 

(b) Each
Grantor hereby irrevocably authorizes the Collateral Agent at any time and from
time to time to file in any relevant jurisdiction any initial financing
statements (including fixture filings) with respect to the Article 9
Collateral or any part thereof and amendments thereto that (i) indicate
the Article 9 Collateral as all assets of such Grantor or words of similar
effect, and (ii) contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment, including 
(A) whether such Grantor is an organization, the type of
organization and any organizational identification number issued to such
Grantor and (B) in the case of a financing statement filed as a fixture
filing, a sufficient description of the real property to which such
Article 9 Collateral relates.  Each
Grantor agrees to provide such information to the Collateral Agent promptly
upon request.

 

Each Grantor
also ratifies its authorization for the Collateral Agent to file in any
relevant jurisdiction any initial financing statements or amendments thereto if
filed prior to the date hereof.

 

The Collateral
Agent is further authorized to file with the United States Patent and Trademark
Office or United States Copyright Office (or any successor office or any
similar office in any other country) such documents as may be necessary or
advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting
the Security Interest granted by each Grantor, without the signature of any
Grantor, and naming any Grantor or the Grantors as debtors and the Collateral
Agent as secured party.

 

(c) The
Security Interest is granted as security only and shall not subject the
Collateral Agent or any other Secured Party to, or in any way alter or modify,
any obligation or liability of any Grantor with respect to or arising out of
the Article 9 Collateral.

 

SECTION 4.02.
Representations and Warranties. 
The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:

 

15

 

(a) Each Grantor has good and valid rights in and title to the
Article 9 Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Article 9 Collateral
pursuant hereto and to execute, deliver and perform its obligations in accordance
with the terms of this Agreement, without the consent or approval of any other
person other than any consent or approval that has been obtained.

 

(b) The Perfection Certificate has been duly prepared, completed and
executed and the information set forth therein (including (x) the exact legal
name of each Grantor and (y) the jurisdiction of organization of each Grantor)
is correct and complete as of the Closing Date.  Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Article 9 Collateral have
been prepared by the Collateral Agent based upon the information provided to
the Administrative Agent in the Perfection Certificate for filing in each
governmental, municipal or other office specified in Schedule 2 to the
Perfection Certificate (or specified by notice from the Borrower to the
Administrative Agent after the Closing Date in the case of filings, recordings
or registrations required by Sections 5.06 or 5.09 of the Credit
Agreement, which are all the filings, recordings and registrations (other than
filings required to be made in the United States Patent and Trademark Office
and the United States Copyright Office in order to perfect the Security
Interest in Article 9 Collateral consisting of United States Patents,
Trademarks and Copyrights) that are necessary as of the Closing Date to publish
notice of and protect the validity of and to establish a legal, valid and
perfected security interest in favor of the Collateral Agent (for the ratable
benefit of the Secured Parties) in respect of all Article 9 Collateral in
which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and
its territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the
filing of continuation statements.  Each
Grantor represents and warrants that a fully executed agreement in the form
hereof and containing a description of all Article 9 Collateral consisting
of Intellectual Property with respect to United States Patents and United
States registered Trademarks (and Trademarks for which United States
registration applications are pending) and United States registered Copyrights
have been delivered to the Collateral Agent for recording by the United States
Patent and Trademark Office and the United States Copyright Office pursuant to
35 U.S.C. §261, 15 U.S.C. §1060 or 17 U.S.C. §205 and
the regulations thereunder, as applicable, and otherwise as may be required
pursuant to the laws of any other necessary jurisdiction, to protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Collateral Agent (for the ratable benefit of the Secured Parties)
in respect of all Article 9 Collateral consisting of Patents, Trademarks
and Copyrights in which a security interest may be perfected by filing,
recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or

 

16

 

subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary (other than such actions as are necessary to perfect the Security
Interest with respect to any Article 9 Collateral consisting of Patents,
Trademarks and Copyrights (or registration or application for registration
thereof) acquired or developed after the date hereof).

 

(c) The Security Interest constitutes (i) a legal and valid
security interest in all the Article 9 Collateral securing the payment and
performance of the Obligations, (ii) subject to the filings described in
Section 4.02(b), a perfected security interest in all Article 9
Collateral in which a security interest may be perfected by filing, recording
or registering a financing statement or analogous document in the United States
(or any political subdivision thereof) and its territories and possessions
pursuant to the Uniform Commercial Code or other applicable law in such
jurisdictions and (iii) a security interest that shall be perfected in all
Article 9 Collateral in which a security interest may be perfected upon
the receipt and recording of this Agreement with the United States Patent and
Trademark Office and the United States Copyright Office, as applicable.  The Security Interest is and shall be prior to
any other Lien on any of the Article 9 Collateral, other than Liens
expressly permitted pursuant to Section 6.02 of the Credit Agreement.

 

(d) The Article 9 Collateral is owned by the Grantors free and
clear of any Lien, except for Liens expressly permitted pursuant to
Section 6.02 of the Credit Agreement. 
None of the Grantors has filed or consented to the filing of
(i) any financing statement or analogous document under the Uniform
Commercial Code or any other applicable laws covering any Article 9 Collateral,
(ii) any assignment in which any Grantor assigns any Collateral or any
security agreement or similar instrument covering any Article 9 Collateral
with the United States Patent and Trademark Office or the United States
Copyright Office or (iii) any assignment in which any Grantor assigns any
Article 9 Collateral or any security agreement or similar instrument
covering any Article 9 Collateral with any foreign governmental, municipal
or other office, which financing statement or analogous document, assignment,
security agreement or similar instrument is still in effect, except, in each
case, for Liens expressly permitted pursuant to Section 6.02 of the Credit
Agreement.  None of the Grantors hold
any Commercial Tort Claim except as indicated on the Perfection Certificate.

 

SECTION 4.03.
Covenants.  (a)  Each Grantor agrees to maintain, at its own
cost and expense, such complete and accurate records with respect to the
Article 9 Collateral as is prudent in the conduct of its business, but in
any event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Article 9 Collateral,
and, at such time or times as the Collateral Agent may request, to prepare and
deliver as soon as reasonably practicable to the Collateral Agent a duly
certified schedule or schedules in form and detail satisfactory to the
Collateral Agent showing the identity, amount and location of any and all
Article 9 Collateral.

 

17

 

(b) Each
Grantor shall, at its own expense, take any and all actions necessary to defend
title to the Article 9 Collateral against all persons and to defend the
Security Interest of the Collateral Agent in the Article 9 Collateral and
the priority thereof against any Lien not expressly permitted pursuant to
Section 6.02 of the Credit Agreement.

 

(c) Each
Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause
to be duly filed all such further instruments and documents and take all such
actions as the Collateral Agent may from time to time request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and Taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith.  If any amount payable to any Grantor under
or in connection with any of the Article 9 Collateral shall be or become
evidenced by any promissory note or other instrument in excess of $200,000,
such note or instrument shall be promptly pledged and delivered to the
Collateral Agent, duly endorsed in a manner satisfactory to the Collateral
Agent.

 

Without
limiting the generality of the foregoing, each Grantor hereby authorizes the
Collateral Agent, with prompt notice thereof to the Grantors, to supplement
this Agreement by supplementing Schedule III or adding additional
schedules hereto to specifically identify any asset or item that may, in the
Collateral Agent’s judgment, constitute Copyrights, Licenses, Patents or
Trademarks; provided that any Grantor shall have the right, exercisable
within 10 days after it has been notified by the Collateral Agent of the
specific identification of such Collateral, to advise the Collateral Agent in
writing of any material inaccuracy of the representations and warranties made
by such Grantor hereunder with respect to such Collateral.  Each Grantor agrees that it will use its
best efforts to take such action as shall be necessary in order that all
representations and warranties hereunder shall be true and correct in all
material respects with respect to such Collateral within 30 days after the
date it has been notified by the Collateral agent of the specific
identification of such Collateral.

 

(d) The
Collateral Agent and such persons as the Collateral Agent may designate shall
have the right, at the Grantors’ own cost and expense, to inspect the
Article 9 Collateral, all records related thereto (and to make extracts
and copies from such records) and the premises upon which any of the
Article 9 Collateral is located, to discuss the Grantors’ affairs with the
officers of the Grantors and their independent accountants and to verify under
reasonable procedures, in accordance with Section 5.07 of the Credit
Agreement, the validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Article 9 Collateral, including,
in the case of Accounts or Article 9 Collateral in the possession of any
third person, by contacting Account Debtors (only during the existence of a
Default) or the third person possessing such Article 9 Collateral for the
purpose of making such a verification. 
The Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured
Party.

 

18

 

(e) At its
option, the Collateral Agent may discharge past due Taxes, assessments,
charges, fees, Liens, security interests or other encumbrances at any time
levied or placed on the Article 9 Collateral and not expressly permitted
pursuant to Section 6.02 of the Credit Agreement, and may pay for the
maintenance and preservation of the Article 9 Collateral to the extent any
Grantor fails to do so as required by the Credit Agreement or this Agreement,
and each Grantor jointly and severally agrees to reimburse the Collateral Agent
on demand for any payment made or any expense incurred by the Collateral Agent
pursuant to the foregoing authorization; provided, however, that
nothing in this paragraph shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any
Grantor with respect to Taxes, assessments, charges, fees, Liens, security
interests or other encumbrances and maintenance as set forth herein or in the
other Loan Documents.

 

(f) If at any
time any Grantor shall take a security interest in any property of an Account
Debtor or any other person to secure payment and performance of an Account in
excess of $200,000, such Grantor shall promptly assign such security interest
to the Collateral Agent.  Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other person granting the security interest.

 

(g) As between
each Grantor, the Collateral Agent and the Secured Parties, each Grantor shall
remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Article 9 Collateral, all in accordance with the terms and
conditions thereof, and each Grantor jointly and severally agrees to indemnify
and hold harmless the Collateral Agent and the Secured Parties from and against
any and all liability for such performance.

 

(h) None of
the Grantors shall make or permit to be made an assignment, pledge or
hypothecation of the Article 9 Collateral or shall grant any other Lien in
respect of the Article 9 Collateral, except as expressly permitted by
Section 6.02 of the Credit Agreement. 
None of the Grantors shall make or permit to be made any transfer of the
Article 9 Collateral, except as expressly permitted by Sections 6.03 and
6.05 of the Credit Agreement.

 

(i) None of
the Grantors will, without the Collateral Agent’s prior written consent, grant
any extension of the time of payment of any Accounts included in the
Article 9 Collateral, compromise, compound or settle the same for less
than the full amount thereof, release, wholly or partly, any person liable for
the payment thereof or allow any credit or discount whatsoever thereon, other
than extensions, credits, discounts, compromises, compoundings or settlements
granted or made in good faith in the prudent conduct of the business of such
Grantor.

 

(j) The
Grantors, at their own expense, shall maintain or cause to be maintained
insurance covering physical loss or damage to the Inventory and Equipment in
accordance with the requirements set forth in Section 5.02 of the Credit
Agreement.

 

19

 

Each Grantor irrevocably makes,
constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as such Grantor’s true and lawful
agent (and attorney-in-fact) for the purpose, upon the occurrence and during
the continuance of an Event of Default, of making, settling and adjusting
claims in respect of Article 9 Collateral under policies of insurance,
endorsing the name of such Grantor on any check, draft, instrument or other
item of payment for the proceeds of such policies of insurance and for making
all determinations and decisions with respect thereto.  In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance
required hereby or under the Credit Agreement or to pay any premium in whole or
part relating thereto, the Collateral Agent may, without waiving or releasing
any obligation or liability of the Grantors hereunder or any Event of Default,
in its sole discretion, obtain and maintain such policies of insurance and pay
such premium and take any other actions with respect thereto as the Collateral
Agent deems advisable.  All sums
disbursed by the Collateral Agent in connection with this paragraph, including
attorneys’ fees, court costs, expenses and other charges relating thereto,
shall be payable, upon demand, by the Grantors to the Collateral Agent and
shall be additional Obligations secured hereby.

 

(k) Each
Grantor shall maintain, in form and manner reasonably satisfactory to the
Collateral Agent, records of its Chattel Paper and its books, records and
documents evidencing or pertaining thereto.

 

SECTION 4.04.
Other Actions.  In order to
further insure the attachment, perfection and priority of, and the ability of
the Collateral Agent to enforce, the Collateral Agent’s security interest in
the Article 9 Collateral, each Grantor agrees, in each case at such
Grantor’s own expense, to take the following actions with respect to the following
Article 9 Collateral:

 

(a) Instruments.  If any
Grantor shall at any time hold or acquire any Instruments in excess of
$200,000, such Grantor shall forthwith endorse, assign and deliver the same to
the Collateral Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Collateral Agent may from time to time specify.

 

(b) Deposit Accounts. 
For each Deposit Account that any Grantor at any time opens or
maintains, such Grantor shall, on or prior to September 30, 2003 (or such
later date not beyond November 30, 2003 as the Collateral Agent may agree
in its sole discretion) either (i) cause the depositary bank to agree to
comply at any time with instructions from the Collateral Agent to such
depositary bank directing the disposition of funds from time to time credited
to such Deposit Account, without further consent of such Grantor or any other
person, pursuant to an agreement in form and substance satisfactory to the
Collateral Agent, or (ii) arrange for the Collateral Agent to become the
customer of the depositary bank with respect to the Deposit Account, with the
Grantor being permitted, only with the consent of the Collateral Agent, to
exercise rights to withdraw funds from such Deposit Account.  The Collateral Agent agrees with each
Grantor that the Collateral Agent shall not give any such instructions or
withhold any

 

20

 

withdrawal rights from any Grantor, unless an Event of Default has
occurred and is continuing, or, after giving effect to any withdrawal, would
occur.  The provisions of this paragraph
shall not apply to (A) any Deposit Account for which any Grantor, the
depositary bank and the Collateral Agent have entered into a cash collateral
agreement specially negotiated among such Grantor, the depositary bank and the
Collateral Agent for the specific purpose set forth therein, (B) Deposit
Accounts for which the Collateral Agent is the depositary, (C) Deposit Accounts
of which all or a substantial portion of the funds on deposit are used for
funding (i) payroll, (ii) 401(k) and other retirement plans and employee
benefits, including rabbi trusts for deferred compensation, (iii) health care
benefits (e.g.,
imprest accounts) and (iv) escrow arrangements (e.g., environmental
indemnity accounts) and (D) other Deposit Accounts with an aggregate balance of
all funds in all such other Deposit Accounts for all Grantors not in excess of
$3,000,000 at any time.

 

(c) Investment Property. 
Except to the extent otherwise provided in Article III, if any
Grantor shall at any time hold or acquire any certificated securities, such
Grantor shall forthwith endorse, assign and deliver the same to the Collateral
Agent, accompanied by such instruments of transfer or assignment duly executed
in blank as the Collateral Agent may from time to time specify.  If any securities now or hereafter acquired
by any Grantor are uncertificated and are issued to such Grantor or its nominee
directly by the issuer thereof, such Grantor shall immediately notify the
Collateral Agent thereof and, at the Collateral Agent’s request and option,
pursuant to an agreement in form and substance satisfactory to the Collateral
Agent, either (a) cause the issuer to agree to comply with instructions
from the Collateral Agent as to such securities, without further consent of any
Grantor or such nominee, or (b) arrange for the Collateral Agent to become
the registered owner of the securities. 
If any securities, whether certificated or uncertificated, or other
Investment Property now or hereafter acquired by any Grantor are held by such
Grantor or its nominee through a Securities Intermediary or Commodity
Intermediary, such Grantor shall immediately notify the Collateral Agent
thereof and, at the Collateral Agent’s request and option, pursuant to an
agreement in form and substance satisfactory to the Collateral Agent, either
(a) cause such Securities Intermediary or Commodity Intermediary, as the
case may be, to agree to comply with Entitlement Orders or other instructions from
the Collateral Agent to such Securities Intermediary as to such securities or
other Investment Property, or (as the case may be) to apply any value
distributed on account of any commodity contract as directed by the Collateral
Agent to such Commodity Intermediary, in each case without further consent of
any Grantor or such nominee, or (b) in the case of Financial Assets (as
governed by Article 8 of the New York UCC) or other Investment Property
held through a Securities Intermediary, arrange for the Collateral Agent to
become the Entitlement Holder with respect to such Investment Property, with
the Grantor being permitted, only with the consent of the Collateral Agent, to
exercise rights to withdraw or otherwise deal with such Investment Property.  The Collateral Agent agrees with each of the
Grantors that the Collateral Agent shall not give any such Entitlement Orders
or instructions or directions to any such issuer,

 

21

 

Securities Intermediary or Commodity Intermediary, and shall not
withhold its consent to the exercise of any withdrawal or dealing rights by any
Grantor, unless an Event of Default has occurred and is continuing, or, after
giving effect to any such investment and withdrawal rights would occur.  The provisions of this paragraph shall not
apply to any Financial Assets credited to a Securities Account for which the
Collateral Agent is the Securities Intermediary.

 

(d) Electronic Chattel Paper and Transferable Records.  If any Grantor at any time holds or acquires
an interest in any Electronic Chattel Paper or any “transferable record,” as
that term is defined in Section 201 of the Federal Electronic Signatures
in Global and National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction, such
Grantor shall promptly notify the Collateral Agent thereof and, at the request
of the Collateral Agent, shall take such action as the Collateral Agent may
request to vest in the Collateral Agent control under New York UCC
Section 9-105 of such Electronic Chattel Paper or control under
Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as so in effect in such jurisdiction, of such transferable
record.  The Collateral Agent agrees
with such Grantor that the Collateral Agent will arrange, pursuant to
procedures satisfactory to the Collateral Agent and so long as such procedures
will not result in the Collateral Agent’s loss of control, for the Grantor to
make alterations to the Electronic Chattel Paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201
of the Federal Electronic Signatures in Global and National Commerce Act or
Section 16 of the Uniform Electronic Transactions Act for a party in
control to allow without loss of control, unless an Event of Default has
occurred and is continuing or would occur after taking into account any action
by such Grantor with respect to such Electronic Chattel Paper or transferable
record.

 

(e) Letter-of-Credit Rights. 
If any Grantor is at any time a beneficiary under a letter of credit now
or hereafter issued in favor of such Grantor, such Grantor shall promptly
notify the Collateral Agent thereof and, at the request and option of the
Collateral Agent, such Grantor shall, pursuant to an agreement in form and
substance satisfactory to the Collateral Agent, either (i) arrange for the
issuer and any confirmer of such letter of credit to consent to an assignment
to the Collateral Agent of the proceeds of any drawing under the letter of
credit or (ii) arrange for the Collateral Agent to become the transferee
beneficiary of the letter of credit, with the Collateral Agent agreeing, in
each case, that the proceeds of any drawing under the letter of credit are to
be paid to the applicable Grantor unless an Event of Default has occurred or is
continuing.

 

(f) Commercial Tort Claims. 
If any Grantor shall at any time hold or acquire a Commercial Tort
Claim, the Grantor shall promptly notify the Collateral Agent thereof in a
writing signed by such Grantor including a summary description of such claim
and grant to the Collateral Agent in such writing a security interest therein
and in the proceeds thereof, all upon the terms of this

 

22

 

Agreement, with such writing to be in form and substance satisfactory
to the Collateral Agent.

 

SECTION 4.05.
Covenants regarding Patent, Trademark and Copyright Collateral.  (a)  Each Grantor agrees that it
will not, and will not permit any of its licensees to, do any act, or omit do
to any act, whereby any Patent that is material to the conduct of the business
of the Borrower and its Subsidiaries, taken as a whole, may become invalidated
or dedicated to the public, and agrees that it shall continue to mark any
products covered by a Patent with the relevant patent number as necessary and
sufficient to establish and preserve its maximum rights under applicable patent
laws.

 

(b) Each
Grantor (either itself or through its licensees or its sublicensees) will, for
each Trademark material to the conduct of the business of the Borrower and its
Subsidiaries, taken as a whole, (i) maintain such Trademark in full force
free from any claim of abandonment or invalidity for non-use,
(ii) maintain the quality of products and services offered under such
Trademark, (iii) display such Trademark with notice of Federal or foreign
registration to the extent necessary and sufficient to establish and preserve
its maximum rights under applicable law and (iv) not knowingly use or
knowingly permit the use of such Trademark in violation of any third party
rights.

 

(c) Each
Grantor (either itself or through its licensees or sublicensees) will, for each
work covered by a Copyright that is material to the conduct of the business of
the Borrower and its Subsidiaries, taken as a whole, continue to publish,
reproduce, display, adopt and distribute the work with appropriate copyright
notice as necessary and sufficient to establish and preserve its maximum rights
under applicable copyright laws.

 

(d) Each
Grantor shall notify the Collateral Agent immediately if it knows or has reason
to know that any Patent, Trademark or Copyright that is material to the conduct
of the business of the Borrower and its Subsidiaries, taken as a whole, may
become abandoned, lost or dedicated to the public, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, United States Copyright Office or any court or similar office
of any country) regarding such Grantor’s ownership of any such Patent,
Trademark or Copyright, its right to register the same, or its right to keep
and maintain the same.

 

(e) In no
event shall any Grantor, either itself or through any agent, employee, licensee
or designee, file an application for any Patent, Trademark or Copyright (or for
the registration of any Trademark or Copyright) with the United States Patent
and Trademark Office, United States Copyright Office or any office or agency in
any political subdivision of the United States or in any other country or any
political subdivision thereof, with respect to any of the same which is
material to the conduct of the business of the Borrower and its Subsidiaries,
taken as a whole, unless it promptly informs the Collateral Agent, and, upon
request of the Collateral Agent, executes and delivers any and all agreements, instruments,
documents and papers as the Collateral Agent may request to evidence the
Collateral Agent’s security interest in such Patent, Trademark or Copyright,
and each Grantor hereby appoints the Collateral Agent as its

 

23

 

attorney-in-fact to execute and
file such writings for the foregoing purposes, all acts of such attorney being
hereby ratified and confirmed; such power, being coupled with an interest, is
irrevocable.

 

(f) Each
Grantor will take all necessary steps that it deems appropriate under the
circumstances and are consistent with the practice in any proceeding before the
United States Patent and Trademark Office, United States Copyright Office or
any office or agency in any political subdivision of the United States or in
any other country or any political subdivision thereof, to maintain and pursue
each application relating to any Patent, Trademark and/or Copyright (and to
obtain the relevant grant or registration) that is material to the conduct of
the business of the Borrower and its Subsidiaries, taken as a whole, and to
maintain each issued Patent and each registration of the Trademarks and
Copyrights that is material to the conduct of the business of the Borrower and
its Subsidiaries, taken as a whole, including timely filings of applications
for renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if consistent with good business judgment, to initiate
opposition, interference and cancelation proceedings against third parties.

 

(g) In the
event that any Grantor knows or has reason to believe that any Article 9
Collateral consisting of a Patent, Trademark or Copyright that is material to
the conduct of the business of the Borrower and its Subsidiaries, taken as a
whole, has been or is about to be infringed, misappropriated or diluted by a
third party, such Grantor promptly shall notify the Collateral Agent and shall,
if consistent with good business judgment, promptly sue for infringement,
misappropriation or dilution and to recover any and all damages for such
infringement, misappropriation or dilution, and take such other actions as are
appropriate under the circumstances to protect such Article 9
Collateral.  Such Grantor may
discontinue or settle any such suit or other action if the Grantor deems such
discontinuance or settlement to be appropriate in its reasonable business
judgment.

 

(h) Upon the
occurrence and during the continuance of an Event of Default, each Grantor
shall, at the request of the Collateral Agent, use its best efforts to obtain
all requisite consents or approvals by the licensor of each Copyright License,
Patent License or Trademark License to effect the assignment of all such
Grantor’s right, title and interest thereunder to the Collateral Agent or its
designee.

 

ARTICLE V

Remedies

 

SECTION 5.01.
Remedies upon Default.  Upon the
occurrence and during the continuance of an Event of Default, each Grantor
agrees to deliver each item of Collateral to the Collateral Agent on demand, and
it is agreed that the Collateral Agent shall have the right to take any of or
all the following actions at the same or different times:  (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the
Security Interest to become an assignment, transfer and conveyance of any of or
all such Article 9 Collateral by the applicable Grantors to the Collateral
Agent, or to license or sublicense, whether general, special or otherwise, and
whether on

 

24

 

an exclusive or nonexclusive
basis, any such Article 9 Collateral throughout the world on such terms
and conditions and in such manner as the Collateral Agent shall determine
(other than in violation of any then-existing licensing arrangements to the
extent that waivers cannot be obtained), and (b) with or without legal
process and with or without prior notice or demand for performance, to take
possession of the Article 9 Collateral and without liability for trespass
to enter any premises where the Article 9 Collateral may be located for
the purpose of taking possession of or removing the Article 9 Collateral
and, generally, to exercise any and all rights afforded to a secured party
under the Uniform Commercial Code or other applicable law.  Without limiting the generality of the
foregoing, each Grantor agrees that the Collateral Agent shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise dispose
of all or any part of the Collateral at a public or private sale or at any
broker’s board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate.  The Collateral Agent shall be authorized at
any such sale (if it deems it advisable to do so) to restrict the prospective
bidders or purchasers to persons who will represent and agree that they are
purchasing the Collateral for their own account for investment and not with a
view to the distribution or sale thereof, and upon consummation of any such
sale the Collateral Agent shall have the right to assign, transfer and deliver
to the purchaser or purchasers thereof the Collateral so sold.  Each such purchaser at any such sale shall
hold the property sold absolutely, free from any claim or right on the part of
any Grantor, and the Grantors hereby waive (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.

 

The Collateral
Agent shall give the applicable Grantors 10 days’ written notice (which
each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the New York UCC or its equivalent in other
jurisdictions) of the Collateral Agent’s intention to make any sale of
Collateral.  Such notice, in the case of
a public sale, shall state the time and place for such sale and, in the case of
a sale at a broker’s board or on a securities exchange, shall state the board
or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange.  Any such public sale shall be
held at such time or times within ordinary business hours and at such place or
places as the Collateral Agent may fix and state in the notice (if any) of such
sale.  At any such sale, the Collateral,
or portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine.  The Collateral
Agent shall not be obligated to make any sale of any Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given.  The Collateral
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice, be made at
the time and place to which the same was so adjourned.  In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Collateral Agent until the sale price is paid by the
purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and

 

25

 

pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice.  At any public (or, to the
extent permitted by law, private) sale made pursuant to this Section, any
Secured Party may bid for or purchase, free (to the extent permitted by law)
from any right of redemption, stay, valuation or appraisal on the part of any
Grantor (all said rights being also hereby waived and released to the extent
permitted by law), the Collateral or any part thereof offered for sale and may
make payment on account thereof by using any claim then due and payable to such
Secured Party from any Grantor as a credit against the purchase price, and such
Secured Party may, upon compliance with the terms of sale, hold, retain and
dispose of such property without further accountability to any Grantor
therefor.  For purposes hereof, a
written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Collateral Agent shall be free to carry out such
sale pursuant to such agreement and no Grantor shall be entitled to the return
of the Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Collateral Agent shall have entered into such an agreement
all Events of Default shall have been remedied and the Obligations paid in full.  As an alternative to exercising the power of
sale herein conferred upon it, the Collateral Agent may proceed by a suit or
suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court
or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver.  Any sale
pursuant to the provisions of this Section 5.01 shall be deemed to conform
to the commercially reasonable standards as provided in Section 9-610(b)
of the New York UCC or its equivalent in other jurisdictions.

 

SECTION 5.02.
Application of Proceeds.  The
Collateral Agent shall apply the proceeds of any collection, sale, foreclosure
or other realization upon any Collateral, including any Collateral consisting
of cash, as follows:

 

FIRST, to the payment of all costs and expenses incurred by the
Administrative Agent or the Collateral Agent (in their capacity as such
hereunder or under any other Loan Document) in connection with such collection,
sale, foreclosure or realization or otherwise in connection with this
Agreement, any other Loan Document or any of the Obligations, including all
court costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Administrative Agent hereunder or under
any other Loan Document on behalf of any Grantor and any other costs or
expenses incurred in connection with the exercise of any right or remedy
hereunder or under any other Loan Document;

 

SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance with
the amounts of the Obligations owed to them on the date of any such
distribution); and

 

THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.

 

26

 

The Collateral Agent shall have
absolute discretion (as between the Secured Parties and the Grantors) as to the
time of application of any such proceeds, moneys or balances in accordance with
this Agreement.  Upon any sale of
Collateral by the Collateral Agent (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt of the
Collateral Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Collateral Agent or such officer or
be answerable in any way for the misapplication thereof.

 

SECTION 5.03.
Grant of License to Use Intellectual Property.  For the purpose of enabling the Collateral Agent to exercise
rights and remedies under this Article at such time as the Collateral
Agent shall be lawfully entitled to exercise such rights and remedies, each
Grantor hereby grants to the Collateral Agent an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to the
Grantors) to use, license or sublicense any of the Article 9 Collateral
consisting of Intellectual Property now owned or hereafter acquired by such
Grantor, and wherever the same may be located, and including in such license
access to all media in which any of the licensed items may be recorded or
stored and to all computer software and programs used for the compilation or
printout thereof.  The use of such
license by the Collateral Agent shall be exercised, at the option of the
Collateral Agent, only upon the occurrence and during the continuation of an
Event of Default; provided, however, that any license, sublicense
or other transaction entered into by the Collateral Agent in accordance
herewith shall be binding upon the Grantors notwithstanding any subsequent cure
of an Event of Default.

 

SECTION 5.04.
Securities Act, etc.  In view of
the position of the Grantors in relation to the Pledged Collateral, or because
of other current or future circumstances, a question may arise under the
Securities Act of 1933, as now or hereafter in effect, or any similar statute
hereafter enacted analogous in purpose or effect (such Act and any such similar
statute as from time to time in effect being called the “Federal Securities
Laws”) with respect to any disposition of the Pledged Collateral permitted
hereunder.  Each Grantor understands
that compliance with the Federal Securities Laws might very strictly limit the
course of conduct of the Collateral Agent if the Collateral Agent were to
attempt to dispose of all or any part of the Pledged Collateral, and might also
limit the extent to which or the manner in which any subsequent transferee of
any Pledged Collateral could dispose of the same.  Similarly, there may be other legal restrictions or limitations
affecting the Collateral Agent in any attempt to dispose of all or part of the
Pledged Collateral under applicable “blue sky” or other state securities laws
or similar laws analogous in purpose or effect.  Each Grantor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Collateral, limit the purchasers to those who will agree, among other things,
to acquire such Pledged Collateral for their own account, for investment, and
not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that in
light of such restrictions and limitations, the Collateral Agent, in its sole
and absolute discretion (a) may proceed to make such a sale whether or not
a registration statement for the purpose of registering such Pledged Collateral
or part thereof shall have been filed

 

27

 

under the Federal Securities
Laws and (b) may approach and negotiate with such number of purchasers as
the Collateral Agent determines to be reasonable to effect such sale.  Each Grantor acknowledges and agrees that
any such sale might result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions.  In the event of any such sale, the
Collateral Agent shall incur no responsibility or liability for selling all or
any part of the Pledged Collateral at a price that the Collateral Agent, in its
sole and absolute discretion, may in good faith deem reasonable under the
circumstances, notwithstanding the possibility that a substantially higher
price might have been realized if the sale were deferred until after
registration as aforesaid or if more than a single purchaser were approached.  The provisions of this Section 5.04
will apply notwithstanding the existence of a public or private market upon
which the quotations or sales prices may exceed substantially the price at
which the Collateral Agent sells.

 

ARTICLE VI

Indemnity, Subrogation and
Subordination

 

SECTION 6.01.
Indemnity and Subrogation.  In
addition to all such rights of indemnity and subrogation as the Guarantors may
have under applicable law (but subject to Section 6.03), the Borrower
agrees that (a) in the event a payment shall be made by any Guarantor
under this Agreement, the Borrower shall indemnify such Guarantor for the full
amount of such payment and such Guarantor shall be subrogated to the rights of
the person to whom such payment shall have been made to the extent of such
payment and (b) in the event any assets of any Guarantor shall be sold
pursuant to this Agreement or any other Security Document to satisfy in whole
or in part a claim of any Secured Party, the Borrower shall indemnify such
Guarantor in an amount equal to the greater of the book value or the fair
market value of the assets so sold.

 

SECTION 6.02.
Contribution and Subrogation. 
Each Guarantor (a “Contributing Guarantor”) agrees (subject to
Section 6.03) that, in the event a payment shall be made by any other
Guarantor hereunder in respect of any Obligation or assets of any other
Guarantor shall be sold pursuant to any Security Document to satisfy any
Obligation owed to any Secured Party and such other Guarantor (the “Claiming
Guarantor”) shall not have been fully indemnified by the Borrower as
provided in Section 6.01, the Contributing Guarantor shall indemnify the
Claiming Guarantor in an amount equal to the amount of such payment or the
greater of the book value or the fair market value of such assets, as the case
may be, in each case multiplied by a fraction of which the numerator shall be
the net worth of the Contributing Guarantor on the date hereof and the
denominator shall be the aggregate net worth of all the Guarantors on the date
hereof (or, in the case of any Guarantor becoming a party hereto pursuant to
Section 7.16, the date of the Supplement hereto executed and delivered by
such Guarantor).  Any Contributing
Guarantor making any payment to a Claiming Guarantor pursuant to this
Section 6.02 shall be subrogated to the rights of such Claiming Guarantor
under Section 6.01 to the extent of such payment.

 

28

 

SECTION 6.03.
Subordination.  (a)  Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under
Sections 6.01 and 6.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to
the indefeasible payment in full in cash of the Obligations.  No failure on the part of the Borrower or
any Guarantor to make the payments required by Sections 6.01 and 6.02 (or
any other payments required under applicable law or otherwise) shall in any
respect limit the obligations and liabilities of any Guarantor with respect to
its obligations hereunder, and each Guarantor shall remain liable for the full
amount of the obligations of such Guarantor hereunder.

 

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

 

ARTICLE VII

Miscellaneous

 

SECTION 7.01.
Notices.  All communications and
notices hereunder shall (except as otherwise expressly permitted herein) be in
writing and given as provided in Section 9.01 of the Credit
Agreement.  All communications and
notices hereunder to any Subsidiary Guarantor shall be given to it in care of
the Borrower as provided in Section 9.01 of the Credit Agreement.

 

SECTION 7.02.
Security Interest Absolute.  All
rights of the Collateral Agent hereunder, the Security Interest, the grant of a
security interest in the Pledged Collateral and all obligations of each Grantor
hereunder shall be absolute and unconditional irrespective of (a) any lack
of validity or enforceability of the Credit Agreement, any other Loan Document,
any agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of
any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or
any of the Obligations, or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor in respect of
the Obligations or this Agreement.

 

SECTION 7.03.
Survival of Agreement.  All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and
notwithstanding

 

29

 

that the Collateral Agent, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended under
the Credit Agreement, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any other
amount payable under any Loan Document is outstanding and unpaid or the
Aggregate L/C Exposure does not equal zero and so long as the Commitments have not
expired or terminated.

 

SECTION 7.04.
Binding Effect; Several Agreement. 
This Agreement shall become effective as to any Loan Party when a
counterpart hereof executed on behalf of such Loan Party shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding
upon such Loan Party and the Collateral Agent and their respective permitted
successors and assigns, and shall inure to the benefit of such Loan Party, the
Collateral Agent and the other Secured Parties and their respective successors
and assigns, except that no Loan Party shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the Credit Agreement.  This Agreement shall be construed as a
separate agreement with respect to each Loan Party and may be amended,
modified, supplemented, waived or released with respect to any Loan Party
without the approval of any other Loan Party and without affecting the
obligations of any other Loan Party hereunder.

 

SECTION 7.05.
Successors and Assigns.  Whenever
in this Agreement any of the parties hereto is referred to, such reference
shall be deemed to include the permitted successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of any Grantor or
the Collateral Agent that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns.

 

SECTION 7.06.
Collateral Agent’s Fees and Expenses; Indemnification.  (a)  The parties hereto agree that
the Collateral Agent shall be entitled to reimbursement of its expenses incurred
hereunder as provided in Section 9.05 of the Credit Agreement.

 

(b) Without
limitation of its indemnification obligations under the other Loan Documents,
each Grantor jointly and severally agrees to indemnify the Collateral Agent and
the other Indemnitees against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related out of pocket expenses,
including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
any way connected with, or as a result of, the execution, delivery or
performance of this Agreement or any agreement or instrument contemplated
hereby or any claim, litigation, investigation or proceeding relating to any of
the foregoing agreement or instrument contemplated hereby or thereby, or to the
Collateral, whether or not any Indemnitee is a party thereto; provided, however, that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a court of

 

30

 

competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.

 

(c) Any such
amounts payable as provided hereunder shall be additional Obligations secured
hereby and by the other Security Documents. 
The provisions of this Section 7.06 shall remain operative and in
full force and effect regardless of the termination of this Agreement or any
other Loan Document, the consummation of the transactions contemplated hereby,
the repayment of any of the Obligations, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Collateral Agent or any other Secured
Party.  All amounts due under this
Section 7.06 shall be payable on written demand therefor and shall bear
interest at the rate specified in Section 2.06 of the Credit Agreement.

 

SECTION 7.07.
Collateral Agent Appointed Attorney-in-Fact.  Each Grantor hereby appoints the Collateral Agent as the
attorney-in-fact of such Grantor for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest.  Without limiting the generality of the
foregoing, the Collateral Agent shall have the right, upon the occurrence and
during the continuance of an Event of Default, with full power of substitution
either in the Collateral Agent’s name or in the name of such Grantor
(a) to receive, endorse, assign and/or deliver any and all notes,
acceptances, checks, drafts, money orders or other evidences of payment
relating to the Collateral or any part thereof; (b) to demand, collect,
receive payment of, give receipt for and give discharges and releases of all or
any of the Collateral; (c) to sign the name of any Grantor on any invoice
or bill of lading relating to any of the Collateral; (d) to send
verifications of Accounts Receivable to any Account Debtor; (e) to
commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize
on all or any of the Collateral or to enforce any rights in respect of any
Collateral; (f) to settle, compromise, compound, adjust or defend any
actions, suits or proceedings relating to all or any of the Collateral;
(g) to notify, or to require any Grantor to notify, Account Debtors to
make payment directly to the Collateral Agent; and (h) to use, sell,
assign, transfer, pledge, make any agreement with respect to or otherwise deal
with all or any of the Collateral, and to do all other acts and things
necessary to carry out the purposes of this Agreement, as fully and completely
as though the Collateral Agent were the absolute owner of the Collateral for
all purposes; provided, however, that nothing herein contained
shall be construed as requiring or obligating the Collateral Agent to make any
commitment or to make any inquiry as to the nature or sufficiency of any
payment received by the Collateral Agent, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part
thereof or the moneys due or to become due in respect thereof or any property
covered thereby.  The Collateral Agent
and the other Secured Parties shall be accountable only for amounts actually
received as a result of the exercise of the powers granted to them herein, and
neither they nor their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or wilful misconduct.

 

31

 

SECTION 7.08.
Applicable Law.  THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.

 

SECTION 7.09.
Waivers; Amendment. 
(a)  No failure or delay by the Collateral Agent, the Issuing
Bank or any Lender in exercising any right or power hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Collateral
Agent, the Issuing Bank and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have.  No waiver of
any provision of any Loan Document or consent to any departure by any Loan
Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given.  Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Collateral Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time. 
No notice or demand on any Loan Party in any case shall entitle any Loan
Party to any other or further notice or demand in similar or other
circumstances.

 

(b) Neither
this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
Collateral Agent and the Loan Party or Loan Parties with respect to which such
waiver, amendment or modification is to apply, subject to any consent required
in accordance with Section 9.08 of the Credit Agreement.

 

SECTION 7.10.
WAIVER OF
JURY TRIAL.  EACH PARTY
HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS.  EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 7.10.

 

SECTION 7.11.
Severability.  In the event any
one or more of the provisions contained in this Agreement or in any other Loan
Document should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of

 

32

 

the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby (it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). 
The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

SECTION 7.12.
Counterparts.  This Agreement may
be executed in counterparts (and by different parties hereto on different counterparts),
each of which shall constitute an original but all of which when taken together
shall constitute a single contract, and shall become effective as provided in
Section 7.04.  Delivery of an
executed signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement.

 

SECTION 7.13.
Headings.  Article and
Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.

 

SECTION 7.14.
Jurisdiction; Consent to Service of Process.  (a)  Each of the Loan
Parties hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America, sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement or any other Loan Document, or for recognition
or enforcement of any judgment, and each of the Loan Parties hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court.  Each of the Loan Parties agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement or any
other Loan Document shall affect any right that the Collateral Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against any Loan Party or
its properties in the courts of any jurisdiction.

 

(b) Each of
the Loan Parties hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in paragraph (a) of this Section. 
Each of the Loan Parties hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

 

(c) Each of
the Loan Parties hereby irrevocably consents to service of process in the
manner provided for notices in Section 7.01.  Nothing in this Agreement or

 

33

 

any other Loan Document will
affect the right of the Collateral Agent to serve process in any other manner
permitted by law.

 

SECTION 7.15.
Termination or Release.  (a)  This Agreement, the Guarantees, the Security
Interest and all other security interests granted hereby shall terminate when
all the Loan Document Obligations (other than wholly contingent indemnification
obligations) then due and owing have been indefeasibly paid in full and the
Lenders have no further commitment to lend under the Credit Agreement, the
aggregate L/C Exposure has been reduced to zero and the Issuing Bank has no
further obligations to issue Letters of Credit under the Credit Agreement.

 

(b) A
Subsidiary Guarantor shall automatically be released from its obligations
hereunder and the Security Interest in the Collateral of such Subsidiary
Guarantor shall be automatically released upon the consummation of any
transaction permitted by the Credit Agreement as a result of which such
Subsidiary Guarantor ceases to be a Subsidiary of the Borrower.

 

(c) Upon any
sale or other transfer by any Grantor of any Collateral that is permitted under
the Credit Agreement to any person that is not the Borrower or a Guarantor, or,
upon the effectiveness of any written consent to the release of the security
interest granted hereby in any Collateral pursuant to Section 9.08 of the
Credit Agreement, the security interest in such Collateral shall be
automatically released and the Collateral Agent will confirm such release in
writing promptly after written request therefor.

 

(d) In
connection with any termination or release pursuant to paragraph (a), (b)
or (c) above, the Collateral Agent shall execute and deliver to any Grantor, at
such Grantor’s expense, all documents that such Grantor shall reasonably
request to evidence such termination or release.  Any execution and delivery of documents pursuant to this
Section 7.15 shall be without recourse to or warranty by the Collateral
Agent.  Without limiting the provisions
of Section 7.06, the Borrower shall reimburse the Collateral Agent upon
demand for all costs and out of pocket expenses, including the fees, charges
and disbursements of counsel, incurred by it in connection with any action
contemplated by this Section 7.15.

 

SECTION 7.16.
Additional Grantors.  Pursuant to
Section 5.09 of the Credit Agreement, each Domestic Subsidiary of a Loan
Party that was not in existence or not a Subsidiary on the date of the Credit
Agreement is required to enter in this Agreement as a Subsidiary Guarantor upon
becoming such a Subsidiary.  Upon
execution and delivery by the Collateral Agent and a Domestic Subsidiary of a
supplement in the form of Exhibit A hereto, such Domestic Subsidiary shall
become a Subsidiary Guarantor hereunder with the same force and effect as if
originally named as a Subsidiary Guarantor herein.  The execution and delivery of any such instrument shall not
require the consent of any other Loan Party hereunder.  The rights and obligations of each
Subsidiary Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Loan Party as a party to this Agreement.

 

34

 

SECTION 7.17.
Right of Setoff.  If an Event of
Default shall have occurred and is continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of any Grantor against any and all of the obligations of
such Grantor now or hereafter existing under this Agreement held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement and although such obligations may be unmatured.  The rights of each Lender under this
Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.

 

35

 

IN WITNESS
WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.

 

	
   

  	
  TD FUNDING CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  	
  /s/ W.
  Nicholas Howley

  	
   

  
	
   

  	
   

  	
   

  	
  Name: W.
  Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Vice
  President and Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TD ACQUISITION CORPORATION,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ W.
  Nicholas Howley

  	
   

  
	
   

  	
   

  	
   

  	
  Name: W.
  Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Vice
  President and Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ADAMS RITE AEROSPACE, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ W.
  Nicholas Howley

  	
   

  
	
   

  	
   

  	
   

  	
  Name: W.
  Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CHAMPION AEROSPACE INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ W.
  Nicholas Howley

  	
   

  
	
   

  	
   

  	
   

  	
  Name: W.
  Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CHRISTIE ELECTRIC CORP.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ W.
  Nicholas Howley

  	
   

  
	
   

  	
   

  	
   

  	
  Name: W.
  Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MARATHON POWER TECHNOLOGIES

  COMPANY,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ W.
  Nicholas Howley

  	
   

  
	
   

  	
   

  	
   

  	
  Name: W.
  Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief
  Executive Officer

  

 

36

 

	
   

  	
  ZMP, INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ W.
  Nicholas Howley

  	
   

  
	
   

  	
   

  	
   

  	
  Name: W.
  Nicholas Howley

  
	
   

  	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CREDIT SUISSE FIRST BOSTON, as

  Collateral Agent,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
  /s/ Robert Hetu

  	
   

  
	
   

  	
   

  	
  Name: Robert Hetu

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
  /s/ Doreen
  B. Welch

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Doreen
  B. Welch

  
	
   

  	
   

  	
   

  	
  Title:
  Associate

  
							

 

The undersigned hereby acknowledges and agrees

that, upon the effectiveness of the Merger, it will

succeed by operation of law to all of the rights and

obligations of the Borrower set forth herein and that

all references herein to the “Borrower” shall thereupon

be deemed to be references to the undersigned.

 

	
  TRANSDIGM INC.,

  
	
   

  
	
  by

  
	
   

  	
  /s/ W.
  Nicholas Howley

  	
   

  
	
   

  	
  Name: W.
  Nicholas Howley

  
	
   

  	
  Title: Chief
  Executive Officer

  

 

The undersigned hereby acknowledges and agrees

that, upon the effectiveness of the Merger, it will

succeed by operation of law to all of the rights and

obligations of Holdings set forth herein and that

all references herein to “Holdings” shall thereupon

be deemed to be references to the undersigned.

 

	
  TRANSDIGM HOLDING COMPANY,

  
	
   

  
	
  by

  
	
   

  	
  /s/ W.
  Nicholas Howley

  	
   

  
	
   

  	
  Name: W.
  Nicholas Howley

  
	
   

  	
  Title: Chief
  Executive Officer

  

 

37

 

Schedule I to

the Guarantee and

Collateral Agreement

 

SUBSIDIARY
GUARANTORS

 

 

	
  Name of Subsidiary

  	
   

  	
  Jurisdiction
  of Organization

  	
   

  	
  Form of
  Organization

  
	
  Adams Rite Aerospace, Inc.

  	
   

  	
  California

  	
   

  	
  Corporation

  
	
  Champion Aerospace Inc.

  	
   

  	
  Delaware

  	
   

  	
  Corporation

  
	
  Christie Electric Corp.

  	
   

  	
  California

  	
   

  	
  Corporation

  
	
  Marathon Power Technologies Company

  	
   

  	
  Delaware

  	
   

  	
  Corporation

  
	
  ZMP, Inc.

  	
   

  	
  California

  	
   

  	
  Corporation

  

 

 

Schedule II
to

the Guarantee and

Collateral Agreement

 

CAPITAL STOCK

 

	
  Issuer

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number and

  Class of

  Equity Interest

  	
   

  	
  Percentage

  Of Equity Interests

  	
   

  
	
  TransDigm Inc.

  	
   

  	
  1

  	
   

  	
  TransDigm Holding Company

  	
   

  	
  100 shares of

  Common Stock

  	
   

  	
  100

  	
  %

  
	
  Adams Rite Aerospace, Inc.

  	
   

  	
  1

  	
   

  	
  ZMP, Inc.

  	
   

  	
  50,000 shares of

  Common Stock

  	
   

  	
  100

  	
  %

  
	
  Champion Aerospace Inc.

  	
   

  	
  1

  	
   

  	
  TransDigm Inc.

  	
   

  	
  1,000 shares of

  Common Stock

  	
   

  	
  100

  	
  %

  
	
  Christie Electric Corp.

  	
   

  	
  3

  	
   

  	
  Marathon Power Technologies Company

  	
   

  	
  22,928 shares of

  Common Stock

  	
   

  	
  100

  	
  %

  
	
  Marathon Power Technologies Company

  	
   

  	
  24

  	
   

  	
  TransDigm Inc.

  	
   

  	
  32,925 shares of

  Common Stock

  	
   

  	
  100

  	
  %

  
	
  Marathon Power Technologies Limited

  	
   

  	
  [•]

  	
   

  	
  Marathon Power Technologies Company

  	
   

  	
  65,000 Ordinary

  Shares, par value

  £1.00 per share

  	
   

  	
  65

  	
  %

  
	
  ZMP, Inc.

  	
   

  	
  1

  	
   

  	
  TransDigm Inc.

  	
   

  	
  1,000 shares of

  Common Stock

  	
   

  	
  100

  	
  %

  

 

DEBT SECURITIES

 

	
  Issuer

  	
   

  	
  Principal

  Amount

  	
   

  	
  Date of
  Note

  	
   

  	
  Maturity
  Date

  	
   

  
	
  Champion Aerospace Inc. (in favor of
  TransDigm Inc.)

  	
   

  	
  $

  	
  160,000,000

  	
   

  	
  May 31, 2001

  	
   

  	
  May 31, 2007

  	
   

  
									

 

 

Schedule III
to

the Guarantee and

Collateral Agreement

 

 

U.S. COPYRIGHTS OWNED BY TRANSDIGM HOLDING COMPANY

 

 

U.S. Copyright Registrations

 

None.

 

 

Pending U.S. Copyright Applications for Registration

 

None.

 

 

Non-U.S. Copyright Registrations

 

None.

 

 

Non-U.S. Pending Copyright Applications for Registration

 

None.

 

1

 

Schedule III to

the Guarantee and

Collateral Agreement

 

LICENSES

 

PART 1

 

LICENSES/SUBLICENSEES OF TRANSDIGM HOLDING COMPANY

AS LICENSOR ON DATE HEREOF

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

 

Non-U.S. Patent Applications

 

 

None.

 

2

 

Schedule III to

the Guarantee and

Collateral Agreement

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

3

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PART 2

 

LICENSEES/SUBLICENSES OF TRANSDIGM HOLDING COMPANY

AS LICENSEE ON DATE HEREOF

 

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

4

 

Schedule III to

the Guarantee and

Collateral Agreement

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

5

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PATENTS OWNED BY TRANSDIGM HOLDING COMPANY

 

U.S. Patent Registrations

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patent Registrations

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

6

 

Schedule III to

the Guarantee and

Collateral Agreement

 

TRADEMARK/TRADE NAMES OWNED BY TRANSDIGM
HOLDING COMPANY

 

 

U.S. Trademark Registrations

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

State Trademark Registrations

 

None.

 

 

Non-U.S. Trademark Registrations

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

Trade Names

 

None.

 

7

 

Schedule III to

the Guarantee and

Collateral Agreement

 

U.S. COPYRIGHTS OWNED BY TRANSDIGM INC.

 

 

U.S. Copyright Registrations

 

None.

 

 

Pending U.S. Copyright Applications for Registration

 

None.

 

 

Non-U.S. Copyright Registrations

 

None.

 

 

Non-U.S. Pending Copyright Applications for
Registration

 

 

None.

 

8

 

Schedule III to

the Guarantee and

Collateral Agreement

 

LICENSES

 

PART 1

 

LICENSES/SUBLICENSEES OF TRANSDIGM INC.

AS LICENSOR ON DATE HEREOF

 

A.  Copyrights

 

None.

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

9

 

Schedule III to

the Guarantee and

Collateral Agreement

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

10

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PART 2

 

LICENSEES/SUBLICENSES OF TRANSDIGM INC.

AS LICENSEE ON DATE HEREOF

 

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

Non-U.S. Copyrights

 

 

None.

 

 

B.  Patents

 

U.S. Patents

 

Pursuant to an
Agreement, dated as of March 26, 2001 (the “License Agreement”), between
Honeywell Intellectual Properties Inc., Honeywell International Inc. (as
Licensor) and TransDigm Inc. (as Licensee), Licensor granted to Licensee a
license relating to those patents and applications for patents in the world,
subject to any export controls that may be imposed by the government of the
United States, which cover Licensed Products (as defined in the License
Agreement) and/or Support (as defined in the License Agreement) and which were
at the time of the License Agreement or thereafter owned by Licensor; any and
all continuation, continuation-in-part, divisional, reissue, renewal and
extension, and other patents and patent applications, and reexamination
certificates, that claim in whole or in part the benefit of the filing date of
any of the foregoing; and any and all counterpart foreign patents and patent applications
of any of the foregoing.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

All non-U.S. patents included in the License Agreement above.

 

11

 

Schedule III to

the Guarantee and

Collateral Agreement

 

Non-U.S. Patent Applications

 

 

None.

 

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

 

None.

 

 

D.  Others

 

None.

 

12

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PATENTS OWNED BY TRANSDIGM INC.

 

U.S. Patent Registrations

 

	
  Patent Numbers

  	
   

  	
  Issue Date

  
	
  4,699,403

  	
   

  	
  October 13, 1987

  
	
  5,973,903

  	
   

  	
  October 26, 1999

  
	
  5,975,119

  	
   

  	
  November 2, 1999

  
	
  6,314,830

  	
   

  	
  November 13, 2001

  
	
  6,484,605

  	
   

  	
  November 26, 2002

  

 

U.S. Patent Applications

 

	
  Application Numbers

  	
   

  	
  Filing
  Date

  
	
  08/938,307

  	
   

  	
  September 27, 1997

  
	
  10/052,909

  	
   

  	
  Unknown

  
	
  10/085,510

  	
   

  	
  February 28, 2002

  

 

Non-U.S. Patent Registrations

 

	
  Country

  	
   

  	
  Issue Date

  	
   

  	
  Patent No.

  
	
  CA

  	
   

  	
  September 28, 1982

  	
   

  	
  1,132,430

  
	
  CA

  	
   

  	
  June 10, 1986

  	
   

  	
  1,205,722

  
	
  CA

  	
   

  	
  March 9, 1993

  	
   

  	
  1,314,193

  
	
  DE

  	
   

  	
  July 6, 1978

  	
   

  	
  2,460,225

  
	
  FR

  	
   

  	
  June 19, 1992

  	
   

  	
  2,640,347

  
	
  JP

  	
   

  	
  October 20, 1989

  	
   

  	
  271883/89

  

 

13

 

Schedule III to

the Guarantee and

Collateral Agreement

 

Non-U.S. Patent Applications

 

	
  Country

  	
   

  	
  Filing
  Date

  	
   

  	
  Application
  No.

  
	
  AU

  	
   

  	
  August 13, 1999

  	
   

  	
  9,955,516

  
	
  CA

  	
   

  	
  November 10, 1992

  	
   

  	
  130,995

  
	
  CA

  	
   

  	
  August 13, 1999

  	
   

  	
  2,340,347

  
	
  DE

  	
   

  	
  March 9, 1993

  	
   

  	
  3,927,694

  
	
  EP

  	
   

  	
  January 3, 1984

  	
   

  	
  114,597

  
	
  EP

  	
   

  	
  August 13, 1999

  	
   

  	
  1,104,503

  
	
  FR

  	
   

  	
  April 1, 1994

  	
   

  	
  2,607,872

  
	
  JP

  	
   

  	
  August 12, 1999

  	
   

  	
  2,002,522,719

  

 

14

 

Schedule III to

the Guarantee and

Collateral Agreement

 

TRADEMARK/TRADE NAMES OWNED BY TRANSDIGM INC.

 

U.S. Trademark Registrations

 

	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  ADEL

  	
   

  	
  February 9, 1982

  	
   

  	
  1,189,110

  
	
  WIGGINS

  	
   

  	
  May 3, 1983

  	
   

  	
  1,236,043

  

 

U.S. Trademark Applications

 

None.

 

State Trademark Registrations

 

None.

 

Non-U.S. Trademark Registrations

 

	
  Country

  	
   

  	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  Australia

  	
   

  	
  WIGGINS

  	
   

  	
  January 27, 1982

  	
   

  	
  370,922

  
	
  South Africa

  	
   

  	
  WIGGINS

  	
   

  	
  June 16, 1981

  	
   

  	
  B81/4151

  
	
  South Africa

  	
   

  	
  WIGGINS

  	
   

  	
  December 8, 1981

  	
   

  	
  B81/9465

  
	
  South Africa

  	
   

  	
  WIGGINS

  	
   

  	
  December 8, 1981

  	
   

  	
  B81/9466

  
	
  United Kingdom

  	
   

  	
  WIG-O-FLEX

  	
   

  	
  January 4, 1976

  	
   

  	
  737,800

  

 

 

Non-U.S. Trademark Applications

 

None.

 

Trade Names

 

	
  Trade
  Names

  
	
  Adel Wiggins

  
	
  Wiggins Service Systems

  
	
  Wiggins Connectors

  
	
  Adel Fasteners

  
	
  Wiggins Fast Fuel Systems

  
	
  AderoControlex

  

 

15

 

Schedule III to

the Guarantee and

Collateral Agreement

 

U.S. COPYRIGHTS OWNED BY ADAMS RITE
AEROSPACE, INC.

 

 

U.S. Copyright Registrations

 

	
  Title

  	
   

  	
  Reg. No.

  	
   

  	
  Author

  
	
  Water Faucet

  	
   

  	
  TX-260-690

  	
   

  	
  Adams Rite Products, Inc.

  

 

 

Pending U.S. Copyright Applications for Registration

 

None.

 

 

Non-U.S. Copyright Registrations

 

None.

 

 

Non-U.S. Pending Copyright Applications for
Registration

 

None.

 

16

 

Schedule III to

the Guarantee and

Collateral Agreement

 

LICENSES

 

PART 1

 

LICENSES/SUBLICENSEES OF ADAMS RITE AEROSPACE, INC.

AS LICENSOR ON DATE HEREOF

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

17

 

Schedule III to

the Guarantee and

Collateral Agreement

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

18

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PART 2

 

LICENSEES/SUBLICENSES OF ADAMS RITE AEROSPACE, INC.

AS LICENSEE ON DATE HEREOF

 

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

19

 

Schedule III to

the Guarantee and

Collateral Agreement

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

20

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PATENTS OWNED BY ADAMS RITE AEROSPACE, INC.

 

U.S. Patent Registrations

 

	
  Patent Numbers

  	
   

  	
  Issue Date

  
	
  4,520,992

  	
   

  	
  June 4, 1985

  
	
  5,504,950*

  	
   

  	
  April 9, 1996

  
	
  5,570,915

  	
   

  	
  November 5, 1996

  
	
  D360,680

  	
   

  	
  July 25, 1995

  

 

* Currently registered in the
name of Adams Rite Sabre International, Inc., the former name of Adams Rite
Aerospace, Inc.

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patent Registrations

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

21

 

Schedule III to

the Guarantee and

Collateral Agreement

 

TRADEMARK/TRADE NAMES OWNED BY ADAMS RITE AEROSPACE, INC.

 

U.S. Trademark Registrations

 

	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  AQUAFLITE

  	
   

  	
  November 16, 1999

  	
   

  	
  2,292,613

  

 

U.S. Trademark Applications

 

None.

 

 

State Trademark Registrations

 

None.

 

 

Non-U.S. Trademark Registrations

 

	
  Country

  	
   

  	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  CTM

  	
   

  	
  AQUAFLITE

  	
   

  	
  February 22, 2001

  	
   

  	
  1,098,144

  

 

 

Non-U.S. Trademark Applications

 

None.

 

Trade Names

 

	
  Trade
  Names

  
	
  Adams Rite Products

  
	
  Adams Rite Sabre International

  

 

22

 

Schedule III to

the Guarantee and

Collateral Agreement

 

U.S. COPYRIGHTS OWNED BY CHAMPION AEROSPACE INC.

 

 

U.S. Copyright Registrations

 

None.

 

 

Pending U.S. Copyright Applications for Registration

 

None.

 

 

Non-U.S. Copyright Registrations

 

None.

 

 

Non-U.S. Pending Copyright Applications for
Registration

 

None.

 

23

 

Schedule III to

the Guarantee and

Collateral Agreement

 

LICENSES

 

PART 1

 

LICENSES/SUBLICENSEES OF CHAMPION AEROSPACE INC.

AS LICENSOR ON DATE HEREOF

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

None.

 

 

B.  Patents

 

U.S. Patents

 

	
  Licensee Name

  and Address

  	
   

  	
  Date of
  License/

  Sublicense

  	
   

  	
  Issue Date

  	
   

  	
  Patent No.

  
	
  John Driscoll

  7800 Netherlands Drive

  Raleigh, North Carolina 27606

  	
   

  	
  November 29, 1994

  	
   

  	
  January 7, 1997

  	
   

  	
  5,592,118

  
	
  John Driscoll

  7800 Netherlands Drive

  Raleigh, North Carolina 27606

  	
   

  	
  November 29, 1994

  	
   

  	
  August 12, 1997

  	
   

  	
  5,656,966

  
	
  John Driscoll

  7800 Netherlands Drive

  Raleigh, North Carolina 27606

  	
   

  	
  November 29, 1994

  	
   

  	
  December 22, 1998

  	
   

  	
  5,852,381

  

 

 

U.S. Patent Applications

 

None.

 

24

 

Schedule III to

the Guarantee and

Collateral Agreement

 

Non-U.S. Patents

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

25

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PART 2

 

LICENSEES/SUBLICENSES OF CHAMPION AEROSPACE INC.

AS LICENSEE ON DATE HEREOF

 

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

None.

 

 

B.  Patents

 

U.S. Patents

 

	
  Licensor Name

  and Address

  	
   

  	
  Date of

  License/

  Sublicense

  	
   

  	
  Issue Date

  	
   

  	
  Patent No.

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  March 17, 1981

  	
   

  	
  4,256,497

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  November 12, 1985

  	
   

  	
  4,552,852

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 14, 1988

  	
   

  	
  4,751,207

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  September 13, 1988

  	
   

  	
  4,771,209

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  November 7, 1989

  	
   

  	
  4,879,260

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  January 4, 1994

  	
   

  	
  5,275,985

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  January 17, 1995

  	
   

  	
  5,381,773

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  May 21, 1996

  	
   

  	
  5,518,968

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  July 16, 1996

  	
   

  	
  5,535,726

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  October 14, 1997

  	
   

  	
  5,677,250

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  November 16, 1999

  	
   

  	
  5,985,473

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  August 11, 1992

  	
   

  	
  RE34,028

  

 

26

 

Schedule III to

the Guarantee and

Collateral Agreement

 

U.S. Patent Applications

 

	
  Licensor Name

  and Address

  	
   

  	
  Date of

  License/

  Sublicense

  	
   

  	
  Filing
  Date

  	
   

  	
  Application
  No.

  
	
  Federal-Mogul
  Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  Unknown

  	
   

  	
  Patent Pending- Iridium Swaged/Brazed
  Electrode Assembly

  

 

 

Non-U.S. Patents

 

	
  Country

  	
   

  	
  Licensor
  Name

  and Address

  	
   

  	
  Date of
  License/

  Sublicense

  	
   

  	
  Issue

  Date

  	
   

  	
  Non-U.S.

  Patent No.

  
	
  AU

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 14, 1984

  	
   

  	
  537,242

  
	
  AU

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  May 26, 198

  	
   

  	
  573,008

  
	
  AU

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  July 20, 1989

  	
   

  	
  586,761

  
	
  BE

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  May 4, 1981

  	
   

  	
  887,047

  
	
  CA

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  September 21, 1982

  	
   

  	
  1,132,143

  
	
  CA

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 5, 1984

  	
   

  	
  1,168,531

  
	
  CA

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  February 9, 1988

  	
   

  	
  1,232,620

  
	
  CA

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  May 1, 1999

  	
   

  	
  1,268,490

  
	
  DE

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  December 10, 1998

  	
   

  	
  19,617,794

  
	
  DE

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  December 2, 1993

  	
   

  	
  3,787,965

  
	
  DE

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 6, 1991

  	
   

  	
  3,036,223

  

 

27

 

Schedule III to

the Guarantee and

Collateral Agreement

 

	
  Country

  	
   

  	
  Licensor
  Name

  and Address

  	
   

  	
  Date of
  License/

  Sublicense

  	
   

  	
  Issue

  Date

  	
   

  	
  Non-U.S.

  Patent No.

  
	
  EPO

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  October 27, 1993

  	
   

  	
  277,178

  
	
  FR

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 29, 1984

  	
   

  	
  2,468,234

  
	
  FR

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 29, 1984

  	
   

  	
  2,566,767

  
	
  FR

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 29, 1984

  	
   

  	
  8,022,476

  
	
  GB

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  January 7, 1998

  	
   

  	
  2,309,050

  
	
  IT

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  December 16, 1987

  	
   

  	
  1,186,712

  
	
  JP

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  February 24, 1992

  	
   

  	
  56,067,187

  
	
  MX

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  March 16, 1983

  	
   

  	
  148,143

  
	
  MX

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  February 12, 1988

  	
   

  	
  155,274

  
	
  MX

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  December 4, 1992

  	
   

  	
  165,801

  
	
  MX

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  Unknown

  	
   

  	
  196,633

  
	
  MX

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  Unknown

  	
   

  	
  961,639

  
	
  NZ

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  August 24, 1984

  	
   

  	
  195,331

  
	
  UK

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  April 9, 1997

  	
   

  	
  2,300,449

  
	
  UK

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  October 26, 1983

  	
   

  	
  GB2,060,773

  
	
  UK

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  October 21, 1987

  	
   

  	
  GB2,160,858

  
	
  UK

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  January 14, 1998

  	
   

  	
  GB2,294,261

  
	
  UK

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  January 7, 1998

  	
   

  	
  GB2,309,050

  
	
  VE

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  Unknown

  	
   

  	
  44,581

  
	
  ZA

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  August 26, 1981

  	
   

  	
  8,005,008

  
	
  ZA

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  November 25, 1981

  	
   

  	
  8,007,059

  

 

28

 

Schedule III to

the Guarantee and

Collateral Agreement

 

Non-U.S. Patent Applications

 

	
  Country

  	
   

  	
  Licensor
  Name

  and Address

  	
   

  	
  Date of
  License/

  Sublicense

  	
   

  	
  Filing

  Date

  	
   

  	
  Non-U.S.

  Application No.

  
	
  AU

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  October 1, 1980

  	
   

  	
  8,062,857

  
	
  AU

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  December 23, 1980

  	
   

  	
  8,065,688

  
	
  AU

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 19, 1985

  	
   

  	
  8,543,814

  
	
  AU

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  July 30, 1987

  	
   

  	
  8,777,830

  
	
  BR

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 21, 1981

  	
   

  	
  P18006759

  
	
  CA

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  March 25, 1996

  	
   

  	
  2,172,585

  
	
  DK

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  March 29, 1988

  	
   

  	
  8801750

  
	
  GB

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 26, 1985

  	
   

  	
  8,516,124

  
	
  GB

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  September 22, 1995

  	
   

  	
  9,519,358

  
	
  GB

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  September 22, 1995

  	
   

  	
  9,621,155

  
	
  IT

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  October 20, 1980

  	
   

  	
  1,127,892

  
	
  IT

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  October 20, 1980

  	
   

  	
  8,049,941

  
	
  IT

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  May 28, 1995

  	
   

  	
  8,520,927

  
	
  JP

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  July 30, 1987

  	
   

  	
  1,503,622

  
	
  JP

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  June 27, 1985

  	
   

  	
  61,017,468

  
	
  JP

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  September 22, 1980

  	
   

  	
  92,010,195

  
	
  PCT

  	
   

  	
  Federal-Mogul Worldwide, Inc.

  	
   

  	
  May 31, 2001

  	
   

  	
  July 30, 1987

  	
   

  	
  WO8800929

  

 

29

 

Schedule III to

the Guarantee and

Collateral Agreement

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

30

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PATENTS OWNED BY CHAMPION AEROSPACE INC.

 

U.S. Patent Registrations

 

	
  Patent Numbers

  	
   

  	
  Issue Date

  
	
  4,814,664

  	
   

  	
  March 21, 1989

  
	
  4,978,309

  	
   

  	
  December 18, 1990

  
	
  5,028,346

  	
   

  	
  July 2, 1991

  
	
  5,032,969

  	
   

  	
  July 16, 1991

  
	
  5,082,806

  	
   

  	
  January 21, 1992

  
	
  5,083,932

  	
   

  	
  July 11, 1991

  
	
  5,187,404

  	
   

  	
  August 5, 1991

  
	
  5,283,499

  	
   

  	
  February 1, 1994

  
	
  5,402,637

  	
   

  	
  April 4, 1995

  
	
  5,592,118

  	
   

  	
  January 7, 1997

  
	
  5,654,868

  	
   

  	
  August 5, 1997

  
	
  5,656,966

  	
   

  	
  August 12, 1997

  
	
  5,852,381

  	
   

  	
  December 22, 1998

  
	
  5,981,982

  	
   

  	
  November 9, 1999

  
	
  5,970,324

  	
   

  	
  October 19, 1999

  
	
  6,285,008

  	
   

  	
  September 4, 2001

  
	
  6,297,568

  	
   

  	
  October 2, 2001

  

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patent Registrations

 

None.

 

31

 

Schedule III to

the Guarantee and

Collateral Agreement

 

Non-U.S. Patent Applications

 

	
  Country

  	
   

  	
  Filing
  Date

  	
   

  	
  Application
  No.

  
	
  AU

  	
   

  	
  December 23, 1999

  	
   

  	
  200,027,139

  
	
  AU

  	
   

  	
  January 11, 2001

  	
   

  	
  200,129,352

  
	
  CN

  	
   

  	
  December 23, 1999

  	
   

  	
  1,332,895

  
	
  EP

  	
   

  	
  December 23, 1999

  	
   

  	
  1,155,485

  
	
  EP

  	
   

  	
  January 11, 2001

  	
   

  	
  1,247,317

  
	
  GB

  	
   

  	
  February 22, 1991

  	
   

  	
  2,241,739

  
	
  GB

  	
   

  	
  January 24, 1994

  	
   

  	
  2,273,612

  
	
  GB

  	
   

  	
  January 24, 1994

  	
   

  	
  2,277,212

  
	
  GB

  	
   

  	
  February 22, 1991

  	
   

  	
  2,277,414

  
	
  WO

  	
   

  	
  January 11, 2001

  	
   

  	
  200,152,376

  
	
  WO

  	
   

  	
  December 23, 1999

  	
   

  	
  200,039,902

  

 

32

 

Schedule III to

the Guarantee and

Collateral Agreement

 

TRADEMARK/TRADE NAMES OWNED BY CHAMPION
AEROSPACE INC.

 

U.S. Trademark Registrations

 

	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  BRINGING POWER TO FLIGHT

  	
   

  	
  November 2, 1993

  	
   

  	
  1,801,860

  

 

U.S. Trademark Applications

 

None.

 

 

State Trademark Registrations

 

None.

 

 

Non-U.S. Trademark Registrations

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

Trade Names

 

	
  Trade
  Names

  
	
  Champion Aviation Products

  
	
  Champion

  
	
  Champion Aerospace

  
	
  Champion Spark Plug

  
	
  Champion Aviation, Inc.

  
	
  Wagner Power Supplies

  
	
  Wagner Lamp Banks

  
	
  Auburn Igniters

  
	
  Livingston Leads and Exciters

  

 

33

 

Schedule III to

the Guarantee and

Collateral Agreement

 

U.S. COPYRIGHTS OWNED BY CHRISTIE ELECTRIC
CORP.

 

 

U.S. Copyright Registrations

 

None.

 

 

Pending U.S. Copyright Applications for
Registration

 

None.

 

 

Non-U.S. Copyright Registrations

 

None.

 

 

Non-U.S. Pending Copyright Applications for
Registration

 

None.

 

34

 

Schedule III to

the Guarantee and

Collateral Agreement

 

LICENSES

 

PART 1

 

LICENSES/SUBLICENSEES OF CHRISTIE ELECTRIC
CORP.

AS LICENSOR ON DATE HEREOF

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

 

Non-U.S. Patent Applications

 

 

None.

 

35

 

Schedule III to

the Guarantee and

Collateral Agreement

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

36

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PART 2

 

LICENSEES/SUBLICENSES OF CHRISTIE ELECTRIC
CORP.

AS LICENSEE ON DATE HEREOF

 

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

37

 

Schedule III to

the Guarantee and

Collateral Agreement

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

38

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PATENTS OWNED BY CHRISTIE ELECTRIC CORP.

 

U.S. Patent Registrations

 

	
  Patent Numbers

  	
   

  	
  Issue Date

  
	
  4,746,852

  	
   

  	
  May 24, 1988

  

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patent Registrations

 

	
  Country

  	
   

  	
  Issue Date

  	
   

  	
  Patent No.

  
	
  AU

  	
   

  	
  September 22, 1988

  	
   

  	
  577,412

  
	
  AU

  	
   

  	
  September 22, 1988

  	
   

  	
  8,548,559

  
	
  CA

  	
   

  	
  September 26, 1989

  	
   

  	
  1,260,058

  

 

Non-U.S. Patent Applications

 

	
  Country

  	
   

  	
  Issue Date

  	
   

  	
  Application
  No.

  
	
  EP

  	
   

  	
  October 21, 1985

  	
   

  	
  181,112

  
	
  JP

  	
   

  	
  October 29, 1985

  	
   

  	
  61221539

  

 

39

 

Schedule III to

the Guarantee and

Collateral Agreement

 

TRADEMARK/TRADE NAMES OWNED BY CHRISTIE
ELECTRIC CORP.

 

U.S. Trademark Registrations

 

	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  REFLEX

  	
   

  	
  June 27, 1972

  	
   

  	
  936,522

  
	
  DIGIFLEX

  	
   

  	
  October 4, 1983

  	
   

  	
  1,252,763

  
	
  CASP

  	
   

  	
  September 30, 1986

  	
   

  	
  1,411,141

  
	
  CHRISTIE

  	
   

  	
  October 27, 1992

  	
   

  	
  1,727,289

  
	
  DATAFX

  	
   

  	
  July 29, 1997

  	
   

  	
  2,083,649

  
	
  PROEASE

  	
   

  	
  October 9, 2001

  	
   

  	
  2,496,591

  

 

U.S. Trademark Applications

 

None.

 

 

State Trademark Registrations

 

None.

 

 

Non-U.S. Trademark Registrations

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

Trade Names

 

	
  Trade
  Names

  
	
  MarathonNorco

  
	
  Aerospace

  
	
  Norco, Inc.

  

 

40

 

Schedule III to

the Guarantee and

Collateral Agreement

 

U.S. COPYRIGHTS OWNED BY MARATHON POWER
TECHNOLOGIES COMPANY

 

 

U.S. Copyright Registrations

 

None.

 

 

Pending U.S. Copyright Applications for
Registration

 

None.

 

 

Non-U.S. Copyright Registrations

 

None.

 

 

Non-U.S. Pending Copyright Applications for
Registration

 

None.

 

41

 

Schedule III to

the Guarantee and

Collateral Agreement

 

LICENSES

 

PART 1

 

LICENSES/SUBLICENSEES OF MARATHON POWER
TECHNOLOGIES COMPANY

AS LICENSOR ON DATE HEREOF

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

42

 

Schedule III to

the Guarantee and

Collateral Agreement

 

Non-U.S. Patent Applications

 

None.

 

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

43

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PART 2

 

LICENSEES/SUBLICENSES OF MARATHON POWER
TECHNOLOGIES

COMPANY AS LICENSEE ON DATE HEREOF

 

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

44

 

Schedule III to

the Guarantee and

Collateral Agreement

 

Non-U.S. Patent Applications

 

None.

 

 

C.  Trademarks

 

U.S. Trademarks

 

	
  Licensor Name

  and Address

  	
   

  	
  Date of
  License/

  Sublicense

  	
   

  	
  U.S. Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  	
   

  
	
  Flennor, Inc. and Walther Flenders

  	
   

  	
  Unknown

  	
   

  	
  FLENNOR*

  	
   

  	
  Unknown

  	
   

  	
  Unknown

  

 

* In connection with the acquisition of the Norco, Inc. business by
Marathon Power Technologies Company (“Marathon”), Marathon was to receive
written confirmation from Flennor, Inc. and Walther Flenders stating that
Marathon has a royalty-free, worldwide license from Flennor, Inc. and Walther
Flenders permitting Marathon to use the FLENNOR trademark in the acquired
business as currently conducted or as proposed to be conducted.  Such confirmation has not been received and
there has been correspondence between Norco, Inc., Marathon and Walther
Flenders raising a question as to whether Marathon has such a license.

 

 

U.S. Trademark Applications

 

None.

 

45

 

Schedule III to

the Guarantee and

Collateral Agreement

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

46

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PATENTS OWNED BY MARATHON POWER TECHNOLOGIES
COMPANY

 

U.S. Patent Registrations

 

	
  Patent Numbers

  	
   

  	
  Issue Date

  
	
  5,044,679

  	
   

  	
  September 3, 1991

  
	
  5,191,805

  	
   

  	
  March 9, 1993

  
	
  5,192,098

  	
   

  	
  March 9, 1993

  
	
  5,265,970

  	
   

  	
  November 30, 1993

  
	
  5,364,201

  	
   

  	
  November 15, 1994

  
	
  5,366,313

  	
   

  	
  November 22, 1994

  
	
  5,592,852

  	
   

  	
  January 14, 1997

  
	
  5,680,795

  	
   

  	
  October 28, 1997

  
	
  5,709,127

  	
   

  	
  January 20, 1998

  
	
  5,860,324

  	
   

  	
  January 19, 1999

  
	
  5,950,997

  	
   

  	
  October 28, 1997

  
	
  6,428,060

  	
   

  	
  August 6, 2002

  

 

U.S. Patent Applications

 

	
  Application Numbers

  	
   

  	
  Filing
  Date

  
	
  08/934,602

  	
   

  	
  Unknown

  

 

Non-U.S. Patent Registrations

 

None.

 

Non-U.S. Patent Applications

 

	
  Country

  	
   

  	
  Filing
  Date

  	
   

  	
  Application
  No.

  
	
  AU

  	
   

  	
  October 19, 1995

  	
   

  	
  9,540,087*

  
	
  AU

  	
   

  	
  July 1, 1996

  	
   

  	
  9,664,048*

  
	
  WO

  	
   

  	
  October 19, 1995

  	
   

  	
  9,614,522*

  
	
  WO

  	
   

  	
  July 1, 1996

  	
   

  	
  9,702,441*

  

 

* These patents applications
have been assigned to Marathon Power Technologies Company by Norco, Inc. and
are currently being recorded.

 

47

 

Schedule III to

the Guarantee and

Collateral Agreement

 

TRADEMARK/TRADE NAMES OWNED BY MARATHON POWER

TECHNOLOGIES COMPANY

 

U.S. Trademark Registrations

 

	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  BALL REVERSER

  	
   

  	
  December 30, 1980

  	
   

  	
  1,144,720

  
	
  NORCO INC. (and Design)

  	
   

  	
  May 12, 1981

  	
   

  	
  1,153,612

  
	
  MARATHON

  	
   

  	
  April 16, 1985

  	
   

  	
  1,330,727

  
	
  SUPERPOWER

  	
   

  	
  July 9, 1985

  	
   

  	
  1,347,534

  
	
  FN (and Design)

  	
   

  	
  September 10, 1985

  	
   

  	
  1,358,860

  
	
  FLENNUT

  	
   

  	
  October 1, 1996

  	
   

  	
  2,004,333

  
	
  M (and Design)

  	
   

  	
  March 5, 2002

  	
   

  	
  2,543,727

  

 

U.S. Trademark Applications

 

	
  Mark

  	
   

  	
  Filing
  Date

  	
   

  	
  Application
  No.

  
	
  M Marathon Superpower (and Design)

  	
   

  	
  February 2, 1999

  	
   

  	
  75/632,368

  
	
  M Marathon (and Design)

  	
   

  	
  February 2, 1999

  	
   

  	
  75/632,383

  

 

State Trademark Registrations

 

None.

 

 

Non-U.S. Trademark Registrations

 

	
  Country

  	
   

  	
  Mark

  	
   

  	
  Reg. Date

  	
   

  	
  Reg. No.

  
	
  Canada

  	
   

  	
  MARATHON

  	
   

  	
  September 17, 2001

  	
   

  	
  550,881

  
	
  CTM

  	
   

  	
  MARATHON

  	
   

  	
  October 9, 2001

  	
   

  	
  1,220,789

  
	
  United Kingdom

  	
   

  	
  MARATHON

  	
   

  	
  May 4, 1985

  	
   

  	
  B1,241,295

  

 

 

Non-U.S. Trademark Applications

 

None.

 

48

 

Schedule III to

the Guarantee and

Collateral Agreement

 

Trade Names

 

	
  Trade
  Names

  
	
  MarathonNorco

  
	
  Aerospace

  
	
  Norco, Inc.

  

 

49

 

Schedule III to

the Guarantee and

Collateral Agreement

 

U.S. COPYRIGHTS OWNED BY ZMP, INC.

 

 

U.S. Copyright Registrations

 

None.

 

 

Pending U.S. Copyright Applications for
Registration

 

None.

 

 

Non-U.S. Copyright Registrations

 

None.

 

 

Non-U.S. Pending Copyright Applications for
Registration

 

None.

 

50

 

Schedule III to

the Guarantee and

Collateral Agreement

 

LICENSES

 

PART 1

 

LICENSES/SUBLICENSEES OF ZMP, INC.

AS LICENSOR ON DATE HEREOF

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

51

 

Schedule III to

the Guarantee and

Collateral Agreement

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

52

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PART 2

 

LICENSEES/SUBLICENSES OF ZMP, INC.

AS LICENSEE ON DATE HEREOF

 

 

A.  Copyrights

 

U.S. Copyrights

 

None.

 

 

Non-U.S. Copyrights

 

None.

 

 

B.  Patents

 

U.S. Patents

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patents

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

53

 

Schedule III to

the Guarantee and

Collateral Agreement

 

C.  Trademarks

 

U.S. Trademarks

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

Non-U.S. Trademarks

 

None.

 

 

Non-U.S. Trademark Applications

 

None.

 

 

D.  Others

 

None.

 

54

 

Schedule III to

the Guarantee and

Collateral Agreement

 

PATENTS OWNED BY ZMP, INC.

 

U.S. Patent Registrations

 

None.

 

 

U.S. Patent Applications

 

None.

 

 

Non-U.S. Patent Registrations

 

None.

 

 

Non-U.S. Patent Applications

 

None.

 

55

 

Schedule III to

the Guarantee and

Collateral Agreement

 

TRADEMARK/TRADE NAMES OWNED BY ZMP, INC.

 

U.S. Trademark Registrations

 

None.

 

 

U.S. Trademark Applications

 

None.

 

 

State Trademark Registrations

 

None.

 

 

Non-U.S. Trademark Registrations

 

None

 

56

 

Schedule III to

the Guarantee and

Collateral Agreement

 

Non-U.S. Trademark Applications

 

None.

 

 

Trade Names

 

	
  Trade
  Names

  
	
  Adams Rite Products

  
	
  Adams Rite Sabre International

  

 

57

 

Exhibit A to the

Guarantee and

Collateral Agreement

 

SUPPLEMENT NO.
[•]
dated as of [•], to
the Guarantee and Collateral Agreement dated as of July 22, 2003 (the “Guarantee and Collateral Agreement”), among TD FUNDING CORPORATION., a
Delaware corporation (the “Borrower”), TD ACQUISITION CORPORATION, a
Delaware corporation (“Holdings”), each subsidiary of the Borrower
listed on Schedule I thereto (each such subsidiary individually a “Subsidiary Guarantor”
and collectively, the “SubsidiaryGuarantors”; the Subsidiary Guarantors,
Holdings and the Borrower are referred to collectively herein as the “Grantors”) and CREDIT SUISSE FIRST BOSTON, (“CSFB”), as
collateral agent (in such capacity, the “Collateral Agent”)
for the Secured Parties (as defined herein).

 

A.  Reference is made to the Credit Agreement
dated as of July 22, 2003 (as amended, supplemented or otherwise modified
from time to time, the “Credit
Agreement”), among
the Borrower, Holdings, the lenders named therein (the “Lenders”), and CSFB, as administrative agent (in such capacity, the “Administrative Agent”) and collateral agent for the
Lenders.

 

B.  Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement or the Guarantee and Collateral Agreement referred to therein,
as applicable.

 

C.  The Grantors have entered into the Guarantee
and Collateral Agreement in order to induce the Lenders to make Loans and the
Issuing Bank to issue Letters of Credit. 
Section 7.16 of the Guarantee and Collateral Agreement provides
that additional Domestic Subsidiaries of the Loan Parties may become Subsidiary
Guarantors and Grantors under the Guarantee and Collateral Agreement by
execution and delivery of an instrument in the form of this Supplement.  The undersigned Subsidiary (the “New Subsidiary”) is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Subsidiary
Guarantor and a Grantor under the Guarantee and Collateral Agreement in order
to induce the Lenders to make additional Loans and the Issuing Bank to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.

 

Accordingly,
the Collateral Agent and the New Subsidiary agree as follows:

 

SECTION
1.  In accordance with Section 7.16
of the Guarantee and Collateral Agreement, the New Subsidiary by its signature
below becomes a Grantor and Subsidiary Guarantor under the Guarantee and Collateral
Agreement with the same force and effect as if originally named therein as a
Grantor and Subsidiary Guarantor and the New Subsidiary hereby (a) agrees to
all the terms and provisions of the Guarantee and

 

1

 

Collateral Agreement applicable
to it as a Grantor and Subsidiary Guarantor thereunder and (b) represents
and warrants that the representations and warranties made by it as a Grantor
and Subsidiary Guarantor thereunder are true and correct in all material
respects on and as of the date hereof. 
In furtherance of the foregoing, the New Subsidiary, as security for the
payment and performance in full of the Obligations (as defined in the Guarantee
and Collateral Agreement), does hereby create and grant to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties,
their successors and assigns, a security interest in and lien on all of the New
Subsidiary’s right, title and interest in and to the Collateral (as defined in
the Guarantee and Collateral Agreement) of the New Subsidiary.  Each reference to a “Grantor” or a “Subsidiary
Guarantor” in the
Guarantee and Collateral Agreement shall be deemed to include the New
Subsidiary.  The Guarantee and
Collateral Agreement is hereby incorporated herein by reference.

 

SECTION
2.  The New Subsidiary represents and
warrants to the Collateral Agent and the other Secured Parties that this
Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.

 

SECTION
3.  This Supplement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Supplement shall become effective when
the Collateral Agent shall have received counterparts of this Supplement that,
when taken together, bear the signatures of the New Subsidiary and the
Collateral Agent.  Delivery of an
executed signature page to this Supplement by facsimile transmission shall be
as effective as delivery of a manually signed counterpart of this Supplement.

 

SECTION 4.  The New Subsidiary hereby represents and
warrants that (a) set forth on Schedule I attached hereto is a true
and correct schedule of the location of any and all Collateral of the New
Subsidiary and (b) set forth under its signature hereto, is the true and
correct legal name of the New Subsidiary, its jurisdiction of formation and the
location of its chief executive office.

 

SECTION
5.  Except as expressly supplemented
hereby, the Guarantee and Collateral Agreement shall remain in full force and
effect.

 

SECTION 6.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION
7.  In case any one or more of the
provisions contained in this Supplement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and in the Guarantee and Collateral
Agreement shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision
in any other jurisdiction). The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal

 

2

 

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

 

SECTION
8.  All communications and notices
hereunder shall be in writing and given as provided in Section 7.01 of the
Guarantee and Collateral Agreement. All communications and notices hereunder to
the New Subsidiary shall be given to it at the address set forth under its
signature below.

 

SECTION
9.  The New Subsidiary agrees to
reimburse the Collateral Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including the reasonable fees, other charges
and disbursements of counsel for the Collateral Agent.

 

IN WITNESS
WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this
Supplement to the Guarantee and Collateral Agreement as of the day and year
first above written.

 

 

	
   

  	
  [NAME OF NEW SUBSIDIARY],

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
  Legal Name:

  
	
   

  	
   

  	
   

  	
  Jurisdiction

  
	
   

  	
   

  	
   

  	
    of Formation:

  
	
   

  	
   

  	
   

  	
  Location of
  Chief

  
	
   

  	
   

  	
   

  	
    Executive Office:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CREDIT SUISSE FIRST BOSTON, as

  Collateral Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

3

 

Schedule I to

Supplement No.      to the

Guarantee and

Collateral Agreement

 

LOCATION OF COLLATERAL

 

	
  Description

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  

 

JURISDICTION OF FORMATION

 

 

Schedule II to

Supplement No.      to the

Guarantee and

Collateral Agreement

 

Pledged Securities of the New Subsidiary

 

CAPITAL STOCK

 

	
  Issuer

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number and

  Class of

  Equity Interests

  	
   

  	
  Percentage

  of Equity

  Interests

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

DEBT SECURITIES

 

	
  Issuer

  	
   

  	
  Principal

  Amount

  	
   

  	
  Date of
  Note

  	
   

  	
  Maturity
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

INTELLECTUAL PROPERTY

 

 

Exhibit B to

Guarantee and

Collateral Agreement

 

FORM OF
PERFECTION CERTIFICATE

 

Reference is
made to (a) the Credit Agreement dated as of July 22, 2003 (as amended,
supplemented, or otherwise modified from time to time, the “Credit Agreement”), among TD
Funding Corporation (the “Borrower”),
TD Acquisition Corporation, (“Holdings”),
the lenders named therein (the “Lenders”)
and Credit Suisse First Boston, a bank organized under the laws of Switzerland,
acting through its Cayman Islands branch, as Administrative Agent for the Lenders
(in such capacity, the “Administrative
Agent”) and as collateral agent (in such capacity, the “Collateral Agent”) and (b) the
Guarantee and Collateral Agreement dated as of July 22, 2003 among the
Borrower, Holdings, the Subsidiaries identified therein (the “Guarantors”) and the Collateral
Agent.  Capitalized terms used but not
defined herein have the meanings assigned in the Credit Agreement or the
Security Documents referred to therein, as applicable.

 

The
undersigned, a Financial Officer and general counsel, respectively, of the
Borrower, hereby certify to the Administrative Agent and each other Secured
Party as follows:

 

1.  Names. 
(a)  The exact legal name of each
Grantor, as such name appears in its respective certificate of formation, is as
follows:

 

(b) Set forth
below is each other legal name each Grantor has had in the past five years,
together with the date of the relevant change:

 

(c) Except as
set forth in Schedule 1 hereto, no Grantor has changed its identity or
corporate structure in any way within the past five years.  Changes in identity or corporate structure
would include mergers, consolidations and acquisitions, as well as any change
in the form, nature or jurisdiction of organization.  If any such change has occurred, include in Schedule 1 the
information required by Sections 1 and 2 of this certificate as to each
acquiree or constituent party to a merger or consolidation.

 

(d) The
following is a list of all other names (including trade names or similar
appellations) used by each Grantor or any of its divisions or other business
units in connection with the conduct of its business or the ownership of its
properties at any time during the past five years:

 

(e) Set forth
below is the Organizational Identification Number, if any, issued by the
jurisdiction of formation of each Grantor that is a registered organization:

 

2.  Current Locations. 
(a)  The chief executive office
of each Grantor is located at the address set forth opposite its name below:

 

	
  Grantor

  	
   

  	
  Mailing
  Address

  	
   

  	
  County

  	
   

  	
  State

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

(b) Set forth
below opposite the name of each Grantor are all locations where such Grantor
maintains any books or records relating to any Accounts Receivable (with each
location at which chattel paper, if any, is kept being indicated by an “*”):

 

	
  Grantor

  	
   

  	
  Mailing
  Address

  	
   

  	
  County

  	
   

  	
  State

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(c) The
jurisdiction of formation of each Grantor that is a registered organization is
set forth opposite its name below:

 

	
  Grantor:

  	
   

  	
  Jurisdiction:

  
	
   

  	
   

  	
   

  

 

(d) Set forth
below opposite the name of each Grantor are all the locations where such
Grantor maintains any Equipment or other Collateral not identified above:

 

	
  Grantor

  	
   

  	
  Mailing
  Address

  	
   

  	
  County

  	
   

  	
  State

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(e) Set forth below opposite the name of each Grantor are all the
places of business of such Grantor not identified in paragraph (a), (b), (c) or
(d) above:

 

	
  Grantor

  	
   

  	
  Mailing
  Address

  	
   

  	
  County

  	
   

  	
  State

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(f) Set forth below opposite the name of each Grantor are the names and
addresses of all Persons other than such Grantor that have possession of any of
the Collateral of such Grantor:

 

	
  Grantor

  	
   

  	
  Mailing
  Address

  	
   

  	
  County

  	
   

  	
  State

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

3.  Unusual Transactions.  All Accounts have been originated by the Grantors and all
Inventory has been acquired by the Grantors in the ordinary course of business.

 

4.  File Search Reports.  File search reports have been obtained from each Uniform
Commercial Code filing office identified with respect to such Grantor in
Section 2 hereof, and such search reports reflect no liens against any of
the Collateral other than those permitted under the Credit Agreement.

 

5.  UCC Filings. 
Financing statements in substantially the form of Schedule 5 hereto
have been prepared for filing in the proper Uniform Commercial Code filing
office in the jurisdiction in which each Grantor is located and, to the extent
any of the collateral is comprised of fixtures, timber to be cut or as
extracted collateral from the wellhead or minehead, in the proper local
jurisdiction, in each case as set forth with respect to such Grantor in Section 2
hereof.

 

2

 

6.  Schedule of Filings.  Attached hereto as Schedule 6 is a schedule setting forth,
with respect to the filings described in Section 5 above, each filing and
the filing office in which such filing is to be made.

 

7.  Stock Ownership and other Equity Interests.  Attached hereto as Schedule 7 is a true
and correct list of all the issued and outstanding stock, partnership
interests, limited liability company membership interests or other equity
interest of the Borrower and each Subsidiary and the record and beneficial
owners of such stock, partnership interests, membership interests or other
equity interests. Also set forth on Schedule 7 is each equity investment
of Holdings, the Borrower or any Subsidiary that represents 50% or less of the
equity of the entity in which such investment was made.

 

8.  Debt Instruments. 
Attached hereto as Schedule 8 is a true and correct list of all
promissory notes and other evidence of indebtedness held by Holdings, the
Borrower and each Subsidiary that are required to be pledged under the
Guarantee and Collateral Agreement, including all applicable intercompany notes
between Holdings and each Subsidiary of Holdings and each Subsidiary of
Holdings and each other such Subsidiary.

 

9.  Advances. 
Attached hereto as Schedule 9 is (a) a true and correct list of all
advances made by the Borrower to any Subsidiary of the Borrower or made by any
Subsidiary of the Borrower to the Borrower or to any other Subsidiary of the
Borrower (other than those identified on Schedule 8), which advances are
on the date hereof evidenced by one or more intercompany notes pledged to the
Administrative Agent pursuant to the requirements of the Guarantee and
Collateral Agreement and (b) a true and correct list of all unpaid intercompany
transfers of goods sold and delivered by or to the Borrower or any Subsidiary
of the Borrower.

 

10.  Intellectual Property.  Attached hereto as Schedule 10(A) in
proper form for filing with the United States Patent and Trademark Office is a
schedule setting forth all of each Grantor’s Patents, Patent Licenses,
Trademarks and Trademark Licenses, including the name of the registered owner,
the registration number and the expiration date of each Patent, Patent License,
Trademark and Trademark License owned by any Grantor. Attached hereto as
Schedule 10(B) in proper form for filing with the United States Copyright
Office is a schedule setting forth all of each Grantor’s Copyrights and
Copyright Licenses, including the name of the registered owner, the
registration number and the expiration date of each Copyright or Copyright
License owned by any Grantor.

 

3

 

IN WITNESS
WHEREOF, the undersigned have duly executed this certificate on this 22nd day
of July, 2003.

 

	
   

  	
  TD FUNDING CORPORATION,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TRANSDIGM INC.,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

4

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